QMED INNOVATIONS, INC. SYSTEM AGREEMENT
This System Agreement (“Agreement”) is by and between QMed Innovations, Inc., a Delaware corporation with an address at 809 Aquidneck Avenue, Middletown, RI 02842 (“QMed”) and customer.
BACKGROUND
Customers use surgical kits to store non-sterile implants and instruments used in orthopedic surgery. These kits have materials for more than one surgery and therefore are used multiple times, which in turn result in multiple sterilizations. QMed has developed a system in which tracking modules (“Quest”) are attached to each kit, and the Quest modules transmit data to QMed’s proprietary software (“QVue”) via cellular communications technology. This autonomously results in the reporting of pertinent information for each kit. This data is accessible viewable in the QVue portal or may be pulled via API to client’s proprietary system. This solution will hereinafter be referred to collectively as the “System”).
In consideration of the mutual promises set forth herein and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:
1. QVue License; Quest Modules; QMed API; System Functionality; System Implementation.
a. Subject to the terms and conditions of this Agreement, during the Term: (i) QMed hereby grants Customer a non-exclusive, nontransferable, limited license (without the right to sublicense) to: (1) use QVue solely to track the information regarding each kit as set forth in this Agreement and (2) use the API to receive this information, and (ii) QMed hereby agrees to provide Quest modules to the Customer for use in the System.
b. When installed and maintained, each Quest module shall: (i) report the following information to QMed’s website on a daily basis: (1) the location of each kit and (2) autoclave and wash cycle counts, and (ii) provide notification to QMed’s website of the following events: (1) when a kit is ready for retrieval, post-autoclave and wash cycle when cycles are performed at the same location; (2) when a kit is approaching a cycle count, indicating a need for inspection and (3) weekly, monthly, quarterly and yearly “kit turns”, indicating the number of times a kit was in the operating room for the support of a specified surgical procedure.
c. The implementation schedule for the System is set forth in Schedule A. This schedule is contingent on Customer providing all information and other cooperation to QMed, in a timely fashion.
2. Intellectual Property.
a. QMed shall own and retain all right, title and interest in and to all rights in the System and any derivative works thereof, subject only to the limited license and Customer’s right to use the Quest modules as expressly set forth above. Customer does not acquire any other rights, express or implied, in the System. ALL RIGHTS NOT EXPRESSLY GRANTED TO CUSTOMER HEREUNDER ARE RESERVED TO QMED.
b. Customer shall use the System for its own internal uses in the ordinary course of its business. Without limiting the generality of the foregoing: (i) Customer will not, and will not permit any third party to, sublicense, rent, copy, modify, create derivative works of, translate, reverse engineer, decompile, disassemble, or otherwise reduce to human perceivable form all or any part of QVue or the API and (ii) Customer shall not disassemble any Quest module, in whole or in part, or use any mechanical, electrical or other method to decompile, disassemble or decrypt any Quest module, or permit any third party to do so. Customer shall do nothing inconsistent with QMed’s title to the System, including but not limited to transferring, loaning, selling, assigning, pledging or otherwise disposing, encumbering or suffering a lien or encumbrance upon or against any interest in the Quest modules. Customer unconditionally and irrevocably assigns to QMed Customer’s entire right, title and interest in and to any intellectual property rights that Customer may now or hereafter have in or relating to the System (including any rights in derivative works or patent improvements relating to either of them), whether held or acquired by operation of law, contract, assignment or otherwise, but excluding any rights in any Customer data. Customer shall be responsible for developing Customer’s interface with the API.
c. QMed agrees to indemnify, defend and hold harmless Customer and its officers, directors, employees, agents, affiliates, successors and assigns from and against any and all losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements, interest, awards, penalties, fines, costs or expenses of whatever kind, including reasonable attorneys’ fees, arising from any third party claim that the System or Customer’s use thereof infringes the intellectual property rights of such third party. Without limiting the generality of the foregoing, QMed may: (i) obtain for the Customer the right to continue to use the System; (b) modify the System so that it becomes non-infringing with substantially similar functionality; or (ii) refund the fees paid by the Customer with respect to the System. This obligation shall not apply to any claim which arises from Customer’s use of the System outside the scope of this Agreement, Customer’s combination of the System with other intellectual property that was not developed or approved in writing by QMed, or Customer’s failure to comply with subsections (a) and (b) above.
3. QMed’s Representations and Warranties; Exclusions and Limitations.
a. QMed shall at its sole cost and expense promptly replace any Quest module which is not reporting the information set forth in Section 1(b), provided that Customer shall reimburse QMed for QMed’s cost of any Module which is rendered inoperable as a result of Customer’s gross negligence or willful misconduct. Customer shall retain the Quest modules after the expiration or termination of this Agreement, provided that Customer shall not use or otherwise transfer the Quest modules, but Customer may return them to QMed.
b. QMed represents and warrants to Customer that all operable Quest modules will report the information set forth in Section 1(b), and this information will be available to Customer through the QVue portal or API. In the event of any breach of this warranty, Customer’s sole remedy (subject to Section 5), and QMed’s sole obligation, shall be for QMed to use commercially reasonable efforts to correct such breach at no additional cost to Customer.
c. EXCEPT AS SPECIFICALLY PROVIDED IN THIS SECTION 3 QMED MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE CONDITION OF THE SYSTEM, ITS MERCHANTABILITY, NON-INFRINGEMENT OR ITS FITNESS FOR ANY PARTICULAR PURPOSE.
d. IN NO EVENT WILL QMED BE LIABLE FOR SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, DAMAGES FROM LOSS OF USE, DATA OR PROFITS, OR COST OF PROCUREMENT OF SUBSTITUTE GOODS OR SERVICES, EVEN IF QMED SHALL HAVE BEEN ADVISED IN ADVANCE OF THE POSSIBILITY OF SUCH LOSS, COST OR DAMAGES, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE USE OR PERFORMANCE OF THE SYSTEM, WHETHER IN AN ACTION BASED ON CONTRACT OR TORT, INCLUDING NEGLIGENCE. IN NO EVENT WILL QMED’S TOTAL LIABILITY FOR ANY DAMAGES ON ACCOUNT OF ANY DEFICIENT WORK EXCEED THE AMOUNTS PAID BY CLIENT TO QMED UNDER THIS AGREEMENT FOR THE PRIOR NINETY (90) DAYS. CUSTOMER ACKNOWLEDGES THAT QMED’S PRICING UNDER THIS AGREEMENT IS BASED ON THE FOREGOING EXCLUSIONS AND LIMITATIONS. THESE EXCLUSIONS AND LIMITATIONS WILL NOT APPLY TO QMED’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 2(c).
4. Confidentiality.
a. The parties acknowledge that, as used in this Agreement, the term “Confidential Information” means all information which is disclosed to or otherwise acquired by a party hereto, under or in connection with this Agreement, which relates to the other party hereto and/or its business, products and services. Confidential Information does not include information which is: (i) in the public domain through no fault of the party to whom it is disclosed (“Recipient”); (ii) already known to Recipient at the time of such disclosure as documented by records in its possession prior to such disclosure; (iii) subsequently received by Recipient in good faith from a third party having prior right to make such subsequent disclosure; (iv) independently developed by Recipient without use of the information disclosed pursuant to this Agreement; (v) approved in writing for unrestricted release or unrestricted disclosure by the party owning or disclosing the information (hereinafter “Discloser”); or (vi) produced or disclosed pursuant to applicable laws, regulations or court order, provided the Recipient has given the Discloser written notice of such request such that the Discloser has an opportunity to defend, limit or protect such production or disclosure. Except as necessary to perform under this Agreement, each Recipient shall not use or duplicate any Confidential Information and shall keep confidential and not disclose any Confidential Information unless the Discloser has, in its sole discretion, previously and expressly consented to such use, duplication or disclosure in writing. At the request of a Discloser, and upon the expiration or termination of this Agreement, each Recipient shall promptly deliver to Discloser all documents, samples or other materials embodying Confidential Information, in whole or in part, in any media, including without limitation any summaries, whether prepared by Recipient or Discloser, including any copies thereof. Each party understands and agrees that the other party would suffer irreparable harm in the event that the first party fails to comply with any of its obligations hereunder, and that monetary damages would not normally be adequate to compensate for such breach. Accordingly, each party agrees that the other party will, in addition to any other remedies available to it at law or in equity, be entitled to seek preliminary and permanent injunctive relief and specific performance to enforce the terms of this Agreement in any court of competent jurisdiction without the need to post a bond or surety of any kind. In the event of a breach of the terms of this Section 4, the breaching party hereby agrees to reimburse the non-breaching party for all costs and expenses, including reasonable attorney’s fees, incurred by it in enforcing the obligations hereunder. The foregoing notwithstanding, Customer agrees that QMed may refer to Customer as a customer in QMed’s marketing materials.
5. Term and Termination.
a. The initial term of this Agreement (the “Initial Term”) begins on the Effective Date and, unless terminated earlier as set forth herein, will continue in effect for the term set forth in Schedule A. This Agreement will automatically renew for successive one (1) year terms unless either party gives the other party written notice of non-renewal at least forty-five (45) days prior to the expiration of the then-current term (each a “Renewal Term” and together with the Initial Term, the “Term”).
b. Either party may terminate this Agreement if (i) the other party defaults in its obligations hereunder and fails to cure such default within thirty (30) days (ten (10) days in the event of payment default) after receiving written notice of the default; (ii) the other party files any petition or action for relief under any bankruptcy or any other law for the relief of debtors, or makes any assignment for the benefit of creditors or takes any action in furtherance of any of the foregoing; (iii) an involuntary petition is filed against the other party under any bankruptcy or similar statute now or hereafter in effect, and such petition is not dismissed or discharged within 90 days or (iv) a custodian, receiver, trustee, assignee for the benefit of creditors (or other similar official) is appointed to take possession, custody or control of any property of the other party.
c. QMed may immediately terminate or suspend this Agreement, any rights granted herein, and the licenses under this Agreement, upon notice to Customer, if Customer breaches any of its obligations under Section 2(b).
d. Upon expiration or termination of this Agreement for any reason all licenses and rights granted to Customer under this Agreement will also terminate, and Customer must cease using any part of the System.
6. General Provisions.
a. The parties hereto are independent contractors. Nothing herein shall create the relationship of employer and employee, partnership, principal and agent, or joint venture. Neither party shall have the authority to bind the other party, nor will either party by act or omissions give the appearance to any person or organization that it has such authority.
b. Neither party shall be liable or responsible to the other party, nor be deemed to have defaulted under or breached this Agreement, for any failure or delay in fulfilling or performing any term of this Agreement, when and to the extent such failure or delay arises out of or is caused by, directly or indirectly, or results from acts or circumstances beyond such party’s control, including, without limitation, the following force majeure events: (i) acts of God or natural catastrophes or forces; (ii) war, invasion, hostilities (whether war is declared or not), terrorist threats or acts, riot, other civil unrest, military disturbances or sabotage; (iii) government order, law or regulation; (iv) medical or other national or regional emergency, including without limitation any pandemic; (v) strikes, labor stoppages or slowdowns or other industrial disturbances; (vi) breakdown, interruptions, loss or malfunctions of utilities, communication services of any type, internet access and/or computers; (vii) power or other mechanical failures or shortage; (viii) loss of data due to power failures or mechanical difficulties with information storage or retrieval systems; and (ix) other events beyond the control of such party. This section shall not excuse any delay or failure to pay money when due.
c. The validity, interpretation and enforcement of the Agreement shall be governed by the internal laws of the State of Rhode Island. In the event of any dispute with respect to any provision of the Agreement or the application of any such provision to any person or agreement, the parties hereby agree that the courts of the State of Rhode Island and of any Federal court located in the State of Rhode Island shall have exclusive jurisdiction to resolve the dispute, and that both parties shall resort to such courts for resolution of the dispute. The parties hereby acknowledge that service of process allowed by Rhode Island law, as well as service by certified mail, return receipt requested, shall be deemed to be proper service of process. In the event of any litigation, the prevailing party shall be entitled recover all fees and costs, including attorneys’ fees.
d. All notices, demands, consents and other communications required or permitted under this Agreement shall be in writing and deemed given when sent: (i) by hand delivery; (ii) by certified mail, return receipt requested, or (iii) by private overnight delivery service (e.g., Federal Express, Courier, Airborne or UPS), to the address of the party set forth on the first page of this Agreement, or to such other address as notified by the party hereto in accordance with this Agreement.
e. In case any one or more of the provisions contained in the Agreement shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect the enforceability of any other provision of this Agreement. Failure by either party of this Agreement to enforce any provision of this Agreement shall not be deemed a waiver of that or any other provision.
f. This Agreement shall be binding upon and inure to the benefit of the parties’ successors and permitted assigns. Customer may not assign its rights under this Agreement without QMed’s prior written consent.
g. This Agreement, including all attachments, is the complete and exclusive statement of the agreement between the parties, and supersedes all prior proposals and understandings, oral or written, relating to the subject matter of this Agreement. Neither party has relied upon any representation, written or oral, which is not set forth in this Agreement. This Agreement may be amended only by a writing executed by the parties. Nothing in any purchase order or other Customer document shall have any effect upon the terms of this Agreement.