SUPPLY AGREEMENT
This Supply Agreement (the "Agreement"), is made and entered
into as of December 26, 2000 (the "Effective Date"), by and between Cytomedix,
Inc. a Delaware corporation ("Cytomedix"), and Curative Health Services, Inc., a
Minnesota corporation ("Curative").
RECITALS
WHEREAS, Cytomedix and Curative are parties to that certain
Amended and Restated Asset Purchase Agreement effective as of October 12, 2000
(the "Asset Purchase Agreement"), pursuant to which Cytomedix has agreed to
purchase certain assets of Curative and its Affiliates as set forth therein; and
WHEREAS, pursuant to Section 2.7(a)(x) of the Asset Purchase
Agreement, it is a condition to the closing of the transactions described in the
Asset Purchase Agreement that the parties hereto enter into this Agreement;
AGREEMENT
NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants contained herein, and for other good and valuable
consideration, the receipt, adequacy and legal sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:
ARTICLE I.
DEFINITIONS
For purposes of this Agreement, the following terms and
variations thereof have the meanings specified or referred to in this Article I:
"Affiliates" - any person or entity which directly or
indirectly controls, is controlled by, or is under common control with a party
hereto. For purposes of this Agreement, "control" shall mean the legal,
beneficial or equitable ownership directly or indirectly of more than fifty
percent (50%) of the aggregate of all voting equity interests rights in such
entity.
"Best Efforts" - the efforts that a prudent person desirous of
achieving a result would use in similar circumstances to ensure that such result
is achieved as expeditiously as possible; provided, however, that a person
required to use Best Efforts under this Agreement will not be required to
dispose of or make any change to its business, or expend any material funds or
incur any other material burden.
"Blood Processing Facilities Costs and Expenses" - the direct
Facility-specific costs and expenses associated with the operation of the
Facilities and the production of Procuren.
"Clinical Trial" - any clinical trial conducted by Cytomedix
in connection with its efforts to receive FDA approval of Procuren or its
ongoing development efforts with respect to Procuren.
"Excluded Facilities" - the blood processing facilities
located in Oregon, Maryland, Iowa, and New Hampshire.
"Facilities" - the blood processing facilities to be owned and
operated by Seller in the Procuren States as listed on Schedule A attached
hereto, but excluding the Excluded Facilities.
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"Facility Lease Costs " - the rent payable by Cytomedix for
any portion of the period for which it is not occupying the Facility under any
Seller Lease as in effect as of the date hereof with respect to which (i) a
consent to assignment has not been obtained at Closing (as defined in the Asset
Purchase Agreement), (ii) the lessor has delivered a notice to vacate or similar
instrument and (iii) Cytomedix has relocated from such Facility as a result
thereof.
"FDA" - the United States Food and Drug Administration, or any
successor agency.
"Governmental Action" - any legislation, regulation, rule or
procedure passed, adopted or implemented after the date hereof by any federal,
state or local government, legislative body, agency (including the FDA), or
other governmental entity, or any decision, finding or action by any agency,
court or other third party which, if or when implemented, would, in the
reasonable determination of either party, (a) prevent Cytomedix from
manufacturing Procuren or otherwise performing its obligations hereunder, or (b)
prevent Curative from using Procuren at its wound treatment centers or otherwise
performing its obligations hereunder.
"Procuren" - Procuren(R), a thrombin-induced platelet
releasate.
"Procuren Costs" - the amount equal to (i) $22.49 per dose of
Procuren sold hereunder with respect to the first 275,000 doses sold to Curative
hereunder during any calendar year, and (ii) $16.25 per dose of Procuren with
respect to any additional doses sold to Curative hereunder during any calendar
year, plus fifty percent (50%) of the Facility Lease Costs amortized over a 24
month period from the date of Cytomedix's incurrence of such costs.
"Procuren Operations" - the development, manufacturing,
marketing, licensing and distribution of Procuren.
"Procuren States" - the states identified on Schedule B
attached hereto in which Curative currently distributes and sells Procuren,
excluding Oregon, Maryland, Iowa and New Hampshire, as such states may change
from time to time pursuant to the provisions herein.
"Technical Costs and Expenses" - the direct costs and expenses
associated with (i) quality control, quality assurance and direct corporate
support and (ii) management personnel related to the Procuren Operations.
"United States" - the United States of America, including any
territories or possessions thereof.
ARTICLE II.
OBLIGATIONS OF CYTOMEDIX
Section 2.1 Supply of Procuren. During the Term, subject to
Section 2.2, Cytomedix shall use its Best Efforts to supply Curative with such
quantities of Procuren as to supply one hundred percent (100%) of Curative's
total requirements for Procuren in the Procuren States for use in connection
with Curative's wound care centers, all on the terms and conditions herein.
Section 2.2 Net Loss Procuren States.
(a) Notwithstanding Section 2.1, Cytomedix shall,
subject to Section 2.2(d) below, have no obligation to supply
Procuren to Curative in any Procuren State in which,
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during any two (2) consecutive calendar quarters, Cytomedix's
Blood Processing Facilities Costs in connection with the
Procuren Operations in such state have exceeded the revenue
received by Cytomedix in connection with the sale of Procuren
to Curative in such state (such difference, the "Procuren
State Deficiency") (any such state, a "Net-Loss Procuren
State").
(b) Notwithstanding Section 2.1, Cytomedix shall,
subject to Section 2.2(e) below, have no obligation to supply
Procuren to Curative in any or all of the Procuren States, in
the event that, during any two (2) consecutive calendar
quarters, the sum of (i) the Blood Processing Facilities Costs
in the Procuren States, plus the Technical Costs and Expenses,
have exceeded (ii) the revenue received by Cytomedix in
connection with the sale of Procuren to Curative in the
Procuren States (such difference, the "National Deficiency")
(any state designated by Cytomedix pursuant to the terms of
this Section 2.2(b), a "Designated Net-Loss Procuren State");
provided, however, that Cytomedix may only designate Procuren
States as Designated Net-Loss Procuren States to the extent
that, during the previous two (2) calendar quarters, the
revenue received by Cytomedix from the sale of Procuren in the
Procuren States not designated as Designated Net-Loss Procuren
States does not exceed (a) the Blood Processing Costs and
Expenses in the Procuren States not designated as Designated
Net-Loss Procuren States, plus (b) the Technical Costs and
Expenses.
(c) Within thirty (30) days after the end of each
calendar quarter, Cytomedix shall provide Curative with
written notice of any Procuren State (such notice, the
"Net-Loss Notice") that is a Net-Loss Procuren State or a
Designated Net-Loss Procuren State based upon the results of
the previous two (2) consecutive calendar quarters, together
with written documentation showing the basis upon which such
determination has been made. At such time, Cytomedix shall
have no further obligation to supply Procuren to Curative in
such Net-Loss Procuren State or Designated Net-Loss Procuren
State, as the case may be, except as set forth in Sections
2.2(d) and 2.2(e) below; provided, however, that Cytomedix
shall be obligated to supply Procuren pursuant to any Orders
already submitted by Curative.
(d) Notwithstanding Section 2.2(a), Cytomedix shall
be obligated to continue to supply Procuren in any Net-Loss
Procuren State, in the event that, within fifteen (15) days of
Curative's receipt of the Net-Loss Notice:
(i) Curative pays Cytomedix the amount of
the Procuren State Deficiency with respect to the two
(2) previous calendar quarters. In such event,
Cytomedix shall be obligated to supply Procuren to
Curative in such Net-Loss Procuren State until such
time, if any, that Curative elects not to pay the
amount of any Procuren State Deficiency with respect
to the two (2) previous calendar quarters (to the
extent not already paid by Curative pursuant to an
earlier Net-Loss Notice) pursuant to a subsequent
Net-Loss Notice; or
(ii) Curative notifies Cytomedix in writing
that the exclusive supply obligation set forth in
Section 2.3 below will no longer apply with respect
to such Net-Loss Procuren State and that Cytomedix
may sell Procuren to any person in such state.
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(e) Notwithstanding Section 2.2(b), Cytomedix shall
be obligated to continue to supply Procuren in any Designated
Net-Loss Procuren State in the event that, within fifteen (15)
days of Curative's receipt of the Net-Loss Notice:
(i) Curative pays Cytomedix the amount of
the National Deficiency, with respect to the two (2)
previous calendar quarters. In such event, Cytomedix
shall be obligated to supply Procuren to Curative in
such Designated Net-Loss Procuren State until such
time, if any, that Curative elects not to pay the
amount of any National Deficiency with respect to the
two (2) previous calendar quarters (to the extent not
already paid by Curative pursuant to an earlier
Net-Loss Notice) pursuant to a subsequent Net-Loss
Notice; or
(ii) Curative notifies Cytomedix in writing
that the exclusive supply obligation set forth in
Section 2.3 below will no longer apply with respect
to such Designated Net-Loss Procuren State and that
Cytomedix may sell Procuren to any person in such
state.
(f) Nothing contained herein to the contrary, in the
event that there are any consents to assignment with respect
to the real property leases relating to the Facilities that
have not been obtained at Closing (as defined in the Asset
Purchase Agreement) and the owner of the real property has
delivered a notice to vacate or similar instrument to
Cytomedix and Cytomedix has relocated from such Facility as
the result thereof, Cytomedix shall have no obligation to
supply Curative with Procuren in such state until such time
that Cytomedix is able to relocate such Facility and resume at
a new Facility the Procuren Operations as were previously
conducted.
Section 2.3 Exclusive Supply Obligation. During the Term,
Cytomedix shall not sell or distribute Procuren to any person in the United
States other than Curative; provided, however, that the foregoing restriction
shall not apply to the distribution of Procuren by Cytomedix to any third party
in connection with any Clinical Trial. Nothing in this Agreement restricts the
ability of Cytomedix to sell or distribute Procuren in any country other than
the United States. The provisions of this Section 2.3 shall terminate upon FDA
approval of Procuren, if any.
Section 2.4 Protocols. During the Term, Cytomedix shall
furnish Curative with all the necessary protocols and procedures relating to
Procuren at such time as such protocols and procedures become available.
ARTICLE III.
PAYMENT
Section 3.1 Purchase Price. The purchase price for the
Procuren (the "Purchase Price") to be supplied hereunder shall be set at the
sole discretion of Cytomedix and shall be payable as set forth in Section 3.2
below; provided, however, that prior to the receipt of FDA approval of Procuren,
if any, if the Purchase Price exceeds the Procuren Costs, Cytomedix shall rebate
such difference to Curative either by cash payment or credit against the Monthly
Charges as defined in Section 3.2 below.
Section 3.2 Payment. Cytomedix shall send Curative an invoice
on a monthly basis, in arrears, for the Procuren supplied to Curative and any
other expenses payable by Curative during the immediately preceding calendar
month (such amount owed by Curative, the "Monthly Charges"), together with a
report showing the calculation of the Monthly Charges for such month. Curative
shall
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pay the Monthly Charges to Cytomedix within thirty (30) days of the date of
invoice therefor. If the Monthly Charges remain unpaid after thirty (30) days of
the date of invoice, interest shall accrue on such unpaid amount at the lower of
(a) fifteen percent (15%) per annum, or (b) the highest rate permitted by law,
until paid.
Section 3.3 Cancellation; Unsuitability for Use.
(a) Except as set forth in Section 3.3(b) or 3.3(c)
below, if Curative cancels any Order for any reason or if any
Procuren supplied hereunder is unsuitable for the treatment of
patients as the result of any action or inaction by Curative,
Curative shall reimburse Cytomedix for all indirect and direct
costs incurred by Cytomedix in connection with the manufacture
of such Procuren.
(b) If any Procuren supplied hereunder is unsuitable
for the treatment of patients as the result of any action or
inaction by Cytomedix, Curative shall have no obligation to
pay the Purchase Price with respect to such Procuren.
(c) If any Procuren supplied hereunder is unsuitable
for the treatment of patients and the parties are unable to
determine the cause of such unsuitability, Curative shall pay
fifty percent (50%) all indirect and direct costs incurred by
Cytomedix in connection with the manufacture of such Procuren.
(d) In any such event, any adjustment to the Purchase
Price shall be reflected in the invoice sent by Cytomedix to
Curative pursuant to Section 3.2.
Section 3.4 Taxes. In addition to the prices and charges
specified herein, the amount of any present or future sales, use, excise,
personal property, duty, ad valorem or similar tax or assessment (other than
taxes based on Cytomedix's net income) applicable to the sale of the Procuren
hereunder to Curative shall be paid by Curative when due. If Curative is exempt
from sales tax by its status as a distributor, Curative shall provide evidence
of a sales tax exemption certificate or reseller's registration number.
ARTICLE IV.
ORDERS; DELIVERY
Section 4.1 Orders. Curative shall initiate all orders of
Procuren by submitting a written order (the "Order") to Cytomedix for the
purchase of Procuren which shall specify or contain (a) the quantity of units to
be purchased, (b) the scheduled delivery date (which shall in no event be a date
earlier than fourteen (14) days from the date the blood of the patient necessary
for the manufacture of Procuren is received by Cytomedix or such other time
period as set forth in Exhibit 5.1 hereof), (c) the address for shipment, and
(d) such other information reasonably requested by Cytomedix, together with
sufficient quantities of the blood of the patient necessary for the manufacture
of Procuren. In all such cases, such blood shall be shipped by Curative to
Cytomedix according to the instructions of Cytomedix.
Section 4.2 Delivery of Procuren. Within fourteen (14) days
from the date the blood of the patient necessary for the manufacture of Procuren
is received by Cytomedix or such other time period as set forth in Exhibit 5.1
hereof, Cytomedix shall deliver Procuren to the address specified in the Order
along with the Procuren Release Test Results, substantially in the form attached
hereto as Exhibit 4.2. Curative shall be notified of such shipment and shall be
provided with the name of the common carrier and the package tracking number.
Freight charges shall be paid by Cytomedix. Title and risk of
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loss with respect to the Procuren supplied hereunder shall pass to Curative at
the point of delivery at the address specified in the Order. In the event
Cytomedix fails to deliver Procuren within the time period set forth above and
the Procuren is unsuitable for treatment as the result of such delay or if any
Procuren supplied by Cytomedix is otherwise unsuitable for treatment as the
result of any action or inaction by Cytomedix, (a) Curative shall have no
obligation to pay the Purchase Price in connection with the Order of such
Procuren as set forth in Section 3.3(b), and (b) if Curative submits another
Order for the same patient, Cytomedix shall promptly redeliver Procuren with
respect to such patient for the Purchase Price and on the other terms and
conditions herein. Cytomedix's obligation to redeliver Procuren as set forth
above shall be Curative's sole remedy in the event any Procuren supplied
hereunder is unsuitable for treatment as the result of any late delivery or
other action or inaction by Cytomedix.
Section 4.3 Notification. Each party shall provide the other
party with notice of any adverse experience involving Procuren resulting in
serious injury or death as soon as possible but in any event within twenty-four
(24) hours after such party receives notice of such occurrence, whether in the
United States or any foreign country, and whether sold by such party or any
third party.
Section 4.4 Transportation of Blood and Procuren. Curative
acknowledges and agrees that until such time, if any, that Procuren receives FDA
approval (or such earlier time that Cytomedix provides written notice that the
restrictions of this Section 4.4 no longer apply), Curative shall not transport
Procuren across the border of any state for any reason whatsoever.
Section 4.5 Product Labeling. In order to comply with
applicable law and in order to protect Cytomedix from claims and liabilities,
Curative's communications and representations to customers shall be true,
accurate, complete and consistent with the labeling of Procuren. Curative shall
not modify, repackage, adulterate, misbrand, alter or add labels to or remove
labels from any Procuren without the prior written approval of Cytomedix.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of Cytomedix.
Cytomedix represents and warrants that the Procuren to be supplied hereunder
will be manufactured in accordance with the specifications set forth in Exhibit
5.1 attached hereto, as it may be amended from time to time.
Section 5.2 Limitation of Warranty. EXCEPT AS SET FORTH IN
SECTION 5.1 ABOVE, CYTOMEDIX MAKES NO EXPRESS OR IMPLIED WARRANTIES OR
REPRESENTATIONS WITH RESPECT TO THE PROCUREN TO BE SUPPLIED HEREUNDER OR
OTHERWISE IN CONNECTION WITH THIS AGREEMENT, INCLUDING ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY WARRANTY RELATING TO
THE EFFICACY OF PROCUREN OR ANY WARRANTY OF NONINFRINGEMENT OF THE RIGHTS OF ANY
THIRD PARTY, AND ALL SUCH WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED. CYTOMEDIX
MAKES NO WARRANTY, EXPRESS OR IMPLIED, TO ANY PERSON OR ENTITY OTHER THAN
CURATIVE CONCERNING PROCUREN. CURATIVE ACKNOWLEDGES THAT THIS LIMITATION OF
WARRANTY IS A MATERIAL INDUCEMENT FOR CYTOMEDIX TO ENTER INTO THIS AGREEMENT.
Section 5.3 Survival. The provisions of this Article V shall
survive the termination of this Agreement.
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ARTICLE VI.
CONFIDENTIALITY
Each party acknowledges that any information concerning the
other party received in connection with this Agreement shall be deemed
"Confidential and Proprietary Information" (provided that information contained
within the Assets (as defined in the Asset Purchase Agreement) transferred to
Cytomedix shall not be deemed Confidential and Proprietary Information of
Curative). Except as otherwise set forth herein, each party agrees that it shall
not permit the duplication, use or disclosure of any such Confidential and
Proprietary Information to any person or entity (other than its own employees or
agents who must have such information for any proper purpose), unless (a)
authorized in writing and signed by the other party, or (b) legally required to
disclose such information, provided that the party availing itself of this
exception has promptly notified the other party of such required disclosure and
has used commercially reasonable efforts to lawfully avoid or limit such
disclosure. Confidential and Proprietary Information does not include any
information which, at the time of disclosure, is generally known by the public
through no breach of the disclosing party. The provisions of this Article VI
survive the expiration or termination of this Agreement.
ARTICLE VII.
INSURANCE
During the Term, each party shall, at its sole cost and
expense, maintain Comprehensive Public General Liability Insurance, including
contractual liability, product liability, and personal injury coverage, with a
minimum combined single limit of $1,000,000 per occurrence, $3,000,000 per year,
and naming the other party as an additional insured. Each party shall provide
the other party with a Certificate of Insurance evidencing such coverage upon
request thereof by such party. Each party shall give the other party at least
thirty (30) days' prior written notice of the expiration or cancellation of, or
any material change in, any insurance policy required to be maintained by such
party pursuant to the terms of this Agreement.
ARTICLE VIII.
RECORDS AND AUDITS
Section 8.1 Maintenance of Records by Curative; Audits.
(a) Curative shall maintain (i) full and accurate
books and records in connection with the performance of its
duties hereunder, including a record of the locations at which
Procuren is utilized, and (ii) full and accurate patient
records in connection with the usage of Procuren at any wound
treatment centers of Curative (the "Patient Data"). All such
books and records shall be kept and maintained for at least
the greater of (1) three (3) years after the termination of
this Agreement, or (2) the minimum amount of time required by
law. Cytomedix shall have the right, during Curative's
business hours upon reasonable prior notice to Curative, to
inspect any of the books and records referenced above,
including the Patient Data, subject to any applicable laws.
Cytomedix shall have the right to access and use the Patient
Data for any lawful purpose, including getting data to support
any necessary filings with the FDA, subject to any applicable
laws.
(b) Cytomedix shall be entitled to conduct an audit,
from time to time, of Curative's methods and procedures in
connection with the blood product supplied by Curative for the
manufacture of Procuren to assure compliance with this
Agreement and
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product specifications. Cytomedix may engage an independent
third party auditor to conduct such audits. Curative shall
cooperate with Cytomedix and its designated auditor in the
performance of such audits and shall take prompt and
appropriate action to correct any deficiencies discovered by
Cytomedix or its auditor. Curative shall be entitled to
receive a copy of any audit reports produced by or on behalf
of Cytomedix hereunder.
Section 8.2 Maintenance of Records by Cytomedix; Audits.
(a) Cytomedix shall maintain full and accurate books
and records in connection with the performance of its duties
hereunder. All such books and records shall be kept and
maintained for at least the greater of (a) three (3) years
after the termination of this Agreement, or (b) the minimum
amount of time required by law. Curative shall have the right,
during Cytomedix's business hours upon reasonable prior notice
to Cytomedix, to inspect any of the books and records
referenced above, subject to any applicable laws.
(b) Until such time, if any, that Procuren receives
FDA approval, Curative shall be entitled to conduct an audit,
from time to time, of Cytomedix's methods and procedures in
connection with the manufacture of Procuren hereunder to
assure compliance with this Agreement and product
specifications. Curative may engage an independent third party
auditor to conduct such audits. Cytomedix shall cooperate with
Curative and its designated auditor in the performance of such
audits and shall take prompt and appropriate action to correct
any deficiencies discovered by Curative or its auditor.
Cytomedix shall be entitled to receive a copy of any audit
reports produced by or on behalf of Curative hereunder.
ARTICLE IX.
IMPROVEMENTS
Section 9.1 Definition. For the purposes of this Article IX,
"Improvements" shall mean any development, enhancement, or modification in the
Procuren product or its process for manufacturing that arises on or after the
Effective Date and results from the work of any employee or consultant of
Curative.
Section 9.2 Title to Improvements. Cytomedix shall have the
right, but not the obligation, to take Curative's right, title and interest in
and to any Improvements, whereupon the same, as more specifically set forth in
Section 9.3 below, shall be incorporated into the definition of Procuren patents
and know-how included within the Assets (as defined in the Asset Purchase
Agreement) transferred to Cytomedix under the Asset Purchase Agreement. Curative
shall fully disclose any such Improvements to Cytomedix in writing within sixty
(60) days after their actual or constructive reduction to practice. The writing
shall include, if appropriate and without limitation, any drawings, laboratory
notes, methods, processes, samples, materials and specification in Curative's
possession or control. Curative shall promptly respond and assist Cytomedix or
any of its attorneys responsible for evaluating the patentability of such
Improvements and shall make available, at no cost to Curative, knowledgeable
persons, including without limitation, the inventor, to consult with Cytomedix
regarding the nature and details of all Improvements.
Section 9.3 Notification by Cytomedix. Cytomedix shall, upon
receipt of any written notice from Curative pursuant to Section 9.2, notify
Curative whether Cytomedix desires to take Curative's right, title and interest
in and to such Improvements. If so, any such Improvements that
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constitute, in Cytomedix's sole discretion, patentable inventions shall
thereupon be incorporated into the definition of Procuren patents included
within the Assets transferred to Cytomedix under the Asset Purchase Agreement,
provided that Cytomedix, within one (1) year or such longer period consented to
by Curative (which consent shall not be unreasonably withheld), files an
application for one (1) or more U.S. and/or foreign patents and thereafter in
good faith prosecutes and, if one or more patents are issued, maintains, patent
protection in respect to such Improvements. Any Improvements that do not, in
Cytomedix's sole discretion, constitute patentable inventions shall be
incorporated into the definition of know-how included within the Assets
transferred to Cytomedix under the Asset Purchase Agreement. Curative shall
execute any necessary documents and cooperate in good faith to the extent that
Cytomedix may reasonably require in order to enable Cytomedix to fully enforce
and exercise its rights to such Improvements. During the time allowed for filing
an application for a U.S. and/or foreign patent with respect to any
Improvements, Curative shall refrain from any activity, including without
limitation, the sale, offer for sale, public use, or disclosure of said
Improvements, that could foreseeably cause forfeiture of patent rights therein.
ARTICLE X.
LIMITATION OF LIABILITY
Section 10.1 Limitation on Types of Damages. NOTWITHSTANDING
ANY PROVISION OF THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL BE LIABLE
TO THE OTHER PARTY FOR ANY SPECIAL, INCIDENTAL, INDIRECT, PUNITIVE OR
CONSEQUENTIAL DAMAGES, WHETHER FORESEEABLE OR NOT, ARISING OUT OF, OR IN
CONNECTION WITH SUCH PARTY'S FAILURE TO PERFORM ITS RESPECTIVE OBLIGATIONS OR
BREACH OF ITS RESPECTIVE REPRESENTATIONS HEREUNDER.
Section 10.2 Limitation on Amount of Damages. IN NO EVENT
SHALL CYTOMEDIX BE LIABLE TO CURATIVE IN CONNECTION WITH THIS AGREEMENT IN AN
AGGREGATE AMOUNT THAT EXCEEDS THE TOTAL AMOUNT PAID BY CURATIVE TO CYTOMEDIX
PURSUANT TO THE TERMS HEREIN.
Section 10.3 Survival. The provisions of this Article X
survive the expiration or termination of this Agreement.
ARTICLE XI.
INDEMNIFICATION
Section 11.1 Indemnification by Curative. Subject to Article
X, Curative shall fully defend and hold Cytomedix and its Affiliates, and their
respective directors, stockholders, employees, officers and agents harmless from
any and all claims, demands, damages, liabilities, costs or expenses (including
attorneys' fees and expenses) arising out of or in connection with (a) the
negligent, reckless or intentional acts or omissions of Curative or its agents,
or (b) the breach by Curative of any representation, warranty, covenant or
obligation in this Agreement.
Section 11.2 Indemnification by Cytomedix. Subject to Article
X, Cytomedix shall fully defend and hold Curative and its Affiliates, and their
respective directors, stockholders, employees, officers and agents harmless from
any and all claims, demands, damages, liabilities, costs or expenses (including
attorneys' fees and expenses) arising out of or in connection with (a) the
negligent, reckless or intentional acts or omissions of Cytomedix or its agents,
or (b) the breach by Cytomedix of any representation, warranty, covenant or
obligation in this Agreement.
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Section 11.3 Procedure for Indemnification - Third Party
Claims.
(a) Promptly after receipt by an indemnified party
under Section 11.1 or 11.2 of notice of the commencement of
any proceeding ("Proceeding") against it by a third party,
such indemnified party shall, if a claim is to be made against
an indemnifying party under such Sections, give notice to the
indemnifying party of the commencement of such Proceeding, but
the failure to notify the indemnifying party does not relieve
the indemnifying party of any liability that it may have to
any indemnified party, except to the extent that the
indemnifying party demonstrates that the defense of such
action is prejudiced by the indemnified party's failure to
give such notice.
(b) If an indemnified party gives notice to the
indemnifying party of the commencement of a Proceeding
referred to in Section 11.3(a), the indemnifying party is
entitled to participate in such Proceeding and, to the extent
that it wishes to assume the defense of such Proceeding with
counsel satisfactory to the indemnified party and, after
notice from the indemnifying party to the indemnified party of
its election to assume the defense of such Proceeding, the
indemnifying party is not, as long as it diligently conducts
such defense, liable to the indemnified party under this
Article XI for any fees of other counsel or any other expenses
with respect to the defense of such Proceeding, in each case
subsequently incurred by the indemnified party in connection
with the defense of such Proceeding, other than reasonable
costs of investigation (unless (i) the indemnifying party is
also a party to such Proceeding and the indemnified party
determines in good faith that joint representation would be
inappropriate, or (ii) the indemnifying party fails to provide
reasonable assurance to the indemnified party of its financial
capacity to defend such Proceeding and provide indemnification
with respect to such Proceeding). If the indemnifying party
assumes the defense of a Proceeding, (x) it will be
conclusively established for purposes of this Agreement that
the claims made in that Proceeding are within the scope of and
subject to indemnification; (y) no compromise or settlement of
such claims may be effected by the indemnifying party without
the indemnified party's consent unless (A) there is no finding
or admission of any violation of legal requirements or any
violation of the rights of any person and no effect on any
other claims that may be made against the indemnified party,
and (B) the sole relief provided is monetary damages that are
paid in full by the indemnifying party; and (z) the
indemnified party will have no liability with respect to any
compromise or settlement of such claims effected without its
consent. If notice is given to an indemnifying party of the
commencement of any Proceeding and the indemnifying party does
not, within ten (10) days after the indemnified party's notice
is given, give notice to the indemnified party of its election
to assume the defense of such Proceeding, the indemnifying
party will be bound by any determination made in such
Proceeding or any compromise or settlement effected by the
indemnified party.
(c) Notwithstanding the foregoing, if an indemnified
party determines in good faith that there is a reasonable
probability that a Proceeding may adversely affect it other
than as a result of monetary damages for which it would be
entitled to indemnification under this Agreement, the
indemnified party may, by notice to the indemnifying party,
assume the exclusive right to defend, compromise, or settle
such Proceeding, but the indemnifying party will not be bound
by any determination of a Proceeding so defended for the
purposes of this Agreement or any compromise or settlement
effected without its consent (which may not be unreasonably
withheld).
10
Section 11.4 Procedure For Indemnification - Other Claims. A
claim for indemnification for any matter not involving a third-party claim may
be asserted by notice to the party from whom indemnification is sought.
Section 11.5 Survival. The provisions of this Article XI
survive the expiration or termination of this Agreement.
ARTICLE XII.
TERM AND TERMINATION
Section 12.1 Term. Unless earlier terminated pursuant to
Sections 12.2 or 12.3 below, this Agreement commences upon the Effective Date
and terminates upon Cytomedix's written notice to Curative of the occurrence of
a Triggering Event (such period, the "Term"). For purposes of this Section 12.1,
a "Triggering Event" constitutes any reasonable determination by Cytomedix that
FDA approval of Procuren is not likely to be obtained. Notwithstanding the
foregoing, upon the receipt of FDA approval of Procuren, if any, the Term
extends for a period of one (1) year from the date of FDA approval and
thereafter may be extended for successive terms of one (1) year each upon the
mutual consent of the parties hereto.
Section 12.2 Termination by Cytomedix. Cytomedix may terminate
this Agreement:
(a) If Curative fails to pay any amounts owed
hereunder when due and does not cure such non-payment within
thirty (30) days thereof; or
(b) Upon thirty (30) days' prior written notice to
Curative, if Curative breaches any of its other material
obligations hereunder and fails to cure such breach by the end
of such thirty (30) day period.
Section 12.3 Termination by Curative. Curative may terminate
this Agreement upon thirty (30) days' prior written notice to Cytomedix, if
Cytomedix breaches any of its other material obligations hereunder and fails to
cure such breach by the end of such thirty (30) day period. In addition,
Curative may terminate this Agreement for any reason upon ninety (90) days'
prior written notice to Cytomedix.
Section 12.4 Termination or Modification in the Event of
Governmental Action. If the parties receive notice of any Governmental Action,
the parties shall attempt in good faith to amend this Agreement in order to
comply with the Governmental Action. If the parties, acting in good faith, are
unable to agree to amendments necessary to comply with the Governmental Action
or if the parties determine in good faith that compliance with the Governmental
Action is impossible or unfeasible, this Agreement shall terminate at the end of
ten (10) days after written notice thereof by either party. Neither party shall
be in breach of this Agreement or liable to the other party as the result of the
termination of this Agreement pursuant to this Section 12.4. In addition,
nothing contained herein to the contrary, Cytomedix shall have no obligation to
supply Procuren to Curative in, and this Agreement shall otherwise terminate
with respect to, any Procuren State in which (a) Cytomedix determines in good
faith that it is impossible or unfeasible to supply Procuren to Curative
hereunder as the result of any Governmental Action or (b) Cytomedix otherwise
determines in good faith that the continued operation of the Procuren Operations
therein would result in Cytomedix being in violation of any applicable law,
regulation, rule or other legal requirement applicable to it. Cytomedix shall
promptly notify Curative of such determination with respect to any Procuren
State.
11
Section 12.5 Remedies upon Termination. Termination of this
Agreement shall not limit either party from pursuing any other remedies
otherwise available to it, including, without limitation, injunctive relief.
Section 12.6 Effect of Termination. In the event of notice of
termination, each party shall continue to perform its obligations hereunder up
to the date of termination. Upon termination, except as otherwise provided
herein, the obligations of the parties hereunder shall cease; provided, however,
that Cytomedix shall be obligated to supply Procuren pursuant to any Orders
received by Cytomedix prior to the date of termination. Following termination of
this Agreement, Curative shall promptly pay Cytomedix any money then due and
owing upon receipt of invoice therefor.
ARTICLE XIII.
MISCELLANEOUS
Section 13.1 Force Majeure. Neither party shall be in default
by reason of any failure in performance of this Agreement if such failure arises
out of causes beyond the control of such nonperforming party, including, but not
restricted to, acts of God, acts of government, insurrections, fires, floods,
accidents, epidemics, quarantines, restrictions, strikes, freight embargoes,
inability to secure materials or transportation facilities, or any and all other
causes beyond the party's reasonable control.
Section 13.2 No Joint Venture. Nothing herein shall create any
association, partnership, joint venture or agency relationship between the
parties hereto or any third party.
Section 13.3 Further Assurances. The parties shall cooperate
reasonably with each other in connection with any steps required to be taken as
part of their respective obligations under this Agreement, and the parties agree
(a) to furnish upon request to each other such further information, (b) to
execute and deliver to each other such other documents, and (c) to do such other
acts and things, all as the other party may reasonably request for the purpose
of carrying out the intent of this Agreement.
Section 13.4 Compliance with Legal Requirements.
(a) Curative covenants that it shall comply in all
material respects with all Federal, state or local laws,
regulations, ordinances or other legal requirements in
connection with the transportation, storage, use, resale and
disposal of Procuren and the performance of its duties
hereunder.
(b) Cytomedix covenants that it shall comply in all
material respects with all Federal, state or local laws,
regulations, ordinances or other legal requirements in
connection with the storage and manufacture of Procuren and
the performance of its duties hereunder.
Section 13.5 Notices. All notices, consents, waivers, and
other communications under this Agreement must be in writing and are deemed to
have been duly given when (a) delivered by hand with written confirmation of
receipt, (b) sent by facsimile with confirmation of transmission by the
transmitting equipment, (c) five (5) days after delivery, if sent by certified
mail, return receipt requested, or (d) one (1) day after delivery, if sent by a
nationally recognized overnight delivery service, return receipt requested, in
each case to the appropriate addresses, or facsimile numbers set forth below (or
to such other addresses, facsimile numbers or as a party may designate by notice
to the other parties):
12
Cytomedix: Cytomedix, Inc.
Three Parkway North
Deerfield, Illinois 60015
Attention: Christopher J. Caywood
Vice President of Strategy and Business Development
Fax: (847) 405-7801
with a copy to: Latham & Watkins
1001 Pennsylvania Ave., N.W.
Suite 1300
Washington, D.C. 20004
Attention: Stuart S. Kurlander, Esq.
Fax: (202) 637-2201
Curative: Curative Health Services, Inc.
150 Motor Parkway
Hauppauge, New York 11788
Attention: William Tella
Sr. Vice President of Business Development
Fax: (631) 233-8107
with a copy to: Dorsey & Whitney LLP
250 Park Avenue
New York, New York 10177
Attention: Seth I. Truwit, Esq.
Fax: (212) 953-7201
Section 13.6 Waiver. The rights and remedies of the parties to
this Agreement are cumulative and not alternative. Neither the failure nor any
delay by any party in exercising any right under this Agreement operates as a
waiver of such right, and no single or partial exercise of any such right
precludes any other or further exercise of such right or the exercise of any
other right. To the maximum extent permitted by applicable law, (a) no claim or
right arising out of this Agreement can be discharged by one party, in whole or
in part, by a waiver or renunciation of the claim or right unless in writing
signed by the other party; (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement.
Section 13.7 Entire Agreement and Modification. This Agreement
and the Asset Purchase Agreement constitute the entire agreement between the
parties with respect to the subject matter of this Agreement and supersede all
prior written and oral agreements and understandings between the parties with
respect to the subject matter of this Agreement. This Agreement may not be
amended except by a written agreement signed on behalf of each of the parties
hereto.
Section 13.8 Assignment. No party to this Agreement may
assign, transfer, or otherwise dispose of any of its rights, duties, or
obligations hereunder without the prior written consent of the other party
hereto; provided, however, that (a) either party may assign, transfer, or
otherwise dispose of any of its rights, duties or obligations hereunder to any
of its Affiliates without the prior consent of the other party, and (b)
Cytomedix may subcontract any of its manufacturing obligations
13
hereunder (provided that in any such case the assigning or subcontracting party
shall continue to be liable for its obligations hereunder), provided that no
such assignment or delegation pursuant to clauses (a) or (b) shall relieve
either party from any of its obligations hereunder. Subject to the foregoing,
this Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their permitted successors and assigns.
Section 13.9 Severability. If any provision of this Agreement
is held invalid or unenforceable by any court of competent jurisdiction, the
other provisions of this Agreement remain in full force and effect. The parties
further agree that if any provision contained herein is, to any extent, held
invalid or unenforceable in any respect under the laws governing this Agreement,
they shall take any actions necessary to render the remaining provisions of this
Agreement valid and enforceable to the fullest extent permitted by law and, to
the extent necessary, shall amend or otherwise modify this Agreement to replace
any provision contained herein that is held invalid or unenforceable with a
valid and enforceable provision giving effect to the intent of the parties.
Section 13.10 No Third Party Beneficiary. No provision of this
Agreement shall create, or be deemed to create, any legal or equitable right in
any person not a party to this Agreement or give any such person any claim
against any party to this Agreement that such party would not have but for this
Agreement.
Section 13.11 Section Headings; Construction. The headings of
Articles and Sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation. All words used in this
Agreement will be construed to be of such gender or number as the context
requires. The language used in the Agreement shall be construed, in all cases,
according to its fair meaning, and not for or against any party hereto. The
parties acknowledge that each party has reviewed this Agreement and that rules
of construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be available in the interpretation of this
Agreement.
Section 13.12 Governing Law; Jurisdiction. This Agreement is
to be governed by and construed under the laws of the State of New York without
regard to conflicts of laws principles that would require the application of any
other law. The parties agree that the state and federal courts located in New
York County, New York, shall be the sole venue and shall have sole jurisdiction
for the resolution of all disputes arising hereunder.
Section 13.13 Execution of Agreement, Counterparts. This
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement. The exchange
of copies of this Agreement and of signature pages by facsimile transmission
shall constitute effective execution and delivery of this Agreement as to the
parties and may be used in lieu of the original Agreement for all purposes.
Signatures of the parties transmitted by facsimile shall be deemed to be their
original signatures for any purpose whatsoever.
[remainder of page intentionally left blank]
14
[signature page to Supply Agreement]
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
CYTOMEDIX:
CYTOMEDIX, INC.
By: /s/ illegible
--------------------------------------------
Name: Christopher Caywood
--------------------------------------------
Its: Vice President
--------------------------------------------
CURATIVE:
CURATIVE HEALTH SERVICES, INC.
By: /s/ William C. Tella
--------------------------------------------
Name: William C. Tella
--------------------------------------------
Its: Senior Vice President, Business Development
--------------------------------------------
15
SCHEDULE A
FACILITIES
ALABAMA
Physician's Plaza #2, 3rd Floor
1424 North Carraway Blvd.
Birmingham
CALIFORNIA
6083 Bristol Parkway Suite 1400
Culver City
COLORADO
Arrow Plaza 1250 S. Hover Road Suite B,
Longmont, Boulder County
CONNECTICUT
419 West Avenue
Stamford
DELAWARE
Riverside Medical Arts Complex
700 Lea Blvd, Suite 305
Wilmington
FLORIDA
Suites F-8, 9 & 10 Quorum
Center/ Orlando, 4303
Vineland Road, Orlando
GEORGIA
200 Atlanta Technology Center
Suite 235, 1575
Northside Dr., Atlanta
ILLINOIS
1960 Springer Drive
Lombard
INDIANA
Rm. A-7, Interstate
Shopping Center
2408 Interstate Plaza Drive,
Hammond
i
KANSAS
P/O Bldg.#17
8240 Marshal Drive
Brookhollow Business
Park, Lenexa
KENTUCKY
Suite 700, Blanken-baker
Business Center II
Blankenbaker Crossing, Louisville
LOUISIANA
1720 Oak Park Blvd.
Lake Charles
MASSACHUSETTS
211 Park Street, P.O. Box 2963
Attleboro
MICHIGAN
Suite 130, Kirts
Medical Bldg.
1350 Kirtz, Troy
MISSISSIPPI
Suit 102D, 220
Business Plaza, 102
Business Park Drive
Jackson
MISSOURI
Suite 638, Colonnade
Building, 638-680
Office Parkway, Creve Coeur
NEBRASKA
744 O street
Lincoln
NEW JERSEY
Union Plaza Shopping
Center, 2441A Route
22 West, Union
NEW YORK
Suites LL101 and 102, p/o
Lower Level, 88 Sunnyside
Blvd., Plainview
NORTH CAROLINA
ii
625-105 Hutton Street
Pylon Commercial Park
Raleigh
OHIO
Suite C, Henthorne
Professional Bldg.,
1574 Henthorne Dr.
Maumee
OKLAHOMA
Suite 105 Broadway
Tech Center, 7508
North Broadway, Oklahoma City
PENNSYLVANIA
Unit B, 3448 Progress
Drive, Bensalem
PUERTO RICO
P.O. Box 1910 Avenida
Las Americas, Ponce
RHODE ISLAND
P/O Lower Level,
640 George Washington
Highway, Lincoln
SOUTH CAROLINA
Suite 412, 104 Corporate
Blvd., West Columbia
TENNESSEE
Aspen Grove Flex Center I,
318 Seaboard Lane
Suite 105, Franklin
TEXAS
7071B Twin Hills
Dallas
WASHINGTON
P/O Bldg. 19
935 Powell Ave., SW
Renton
iii
WEST VIRGINIA
Entire 1st Floor
3508 Staunton Ave.
Charleston
iv
SCHEDULE B
PROCUREN STATES
Alabama
California
Colorado
Connecticut
Delaware
Florida
Georgia
Illinois
Indiana
Kansas
Kentucky
Louisiana
Massachusetts
Michigan
Mississippi
Missouri
Nebraska
New Jersey
New York
North Carolina
Ohio
Oklahoma
Pennsylvania
Puerto Rico
Rhode Island
South Carolina
Tennessee
Texas
Washington
West Virginia
v
EXHIBIT 4.2
PROCUREN RELEASE TEST RESULTS
[omitted]
This exhibit has been omitted from this report in accordance with Item 601 of
Regulation S-K. The Registrant hereby agrees to furnish supplementally to the
Securities and Exchange Commission a copy of this exhibit upon request.
vi
EXHIBIT 5.1
MANUFACTURING SPECIFICATIONS
[omitted]
This exhibit has been omitted from this report in accordance with Item 601 of
Regulation S-K. The Registrant hereby agrees to furnish supplementally to the
Securities and Exchange Commission a copy of this exhibit upon request.
vii