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EXHIBIT 10.1
DESIGN AND DEVELOPMENT AGREEMENT
BETWEEN
MINIMED INC.
AND
ATS AUTOMATION TOOLING SYSTEMS INC.
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I N D E X
SECTION TITLE PAGE
Recitals
1.0 Obligations of ATS 1
2.0 Price 2
3.0 Schedule of Deliveries 2
4.0 Delays in Delivery 3
5.0 Confidentiality 5
6.0 Inventions, Patents, Works of Authorship 6
7.0 Exclusivity 7
8.0 Changes by MiniMed 7
9.0 Representation and Warranties of ATS 7
10.0 Indemnification 9
11.0 Non-Disclosure of Agreement 11
12.0 Relationship of Parties 11
13.0 Warranties 11
14.0 Entire Agreement 12
15.0 Delivery, Title, Risk of Loss 12
16.0 Conflict 13
17.0 Taxes 13
18.0 Termination by ATS 13
19.0 Termination by MiniMed 14
20.0 Remedies Upon Termination/Limitation on Liability 15
21.0 Governing Law 17
22.0 Consent to Jurisdiction 17
23.0 No Third Party Beneficiaries 17
24.0 Notices 17
25.0 Finance Charge 18
26.0 Attorney's Fees 18
27.0 System Acceptance 19
28.0 Software Licenses 20
29.0 Customer Parts and Samples 20
30.0 Successors and Assigns 20
31.0 Severability 21
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32.0 Counterparts 21
33.0 Headings 21
34.0 Arbitration 21
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DESIGN AND DEVELOPMENT AGREEMENT
This Design and Development Agreement (the "Agreement") is entered into
as of February 18, 2000, between MiniMed Inc., a Delaware corporation
("MiniMed"), having its principal place of business at 12744 San Fernando Road,
Sylmar, CA 91342 and ATS Automation Tooling Systems, Inc., an Ontario
corporation ("ATS"), having its principal place of business at 250 Royal Oak
Road, Box 32100, Preston Centre, Cambridge, ON N3H5M2.
WHEREAS MiniMed has decided to implement an automated manufacturing
process for its continuous glucose sensors; and
WHEREAS ATS has substantial experience in the design, development,
construction and installation of automated manufacturing and assembly systems
including experience in those designed for use in the production of medical
devices and supplies; and
WHEREAS ATS desires to design, develop, construct and install automated
manufacturing systems as described herein which MiniMed intends to use for the
manufacture of continuous glucose sensors and components thereof; and
WHEREAS MiniMed has delivered its Purchase Order 12066 (the "PO") for
the design, development, construction and installation of the Systems; and
WHEREAS the PO contemplated that the parties would negotiate in good
faith the technical, legal and commercial terms and conditions of a fixed price
definitive agreement relating to the design, development, construction and
installation of the Systems, and the parties intend that this Agreement be such
definitive agreement and supercede the PO.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants contained herein and intending to be legally bound hereby, the
parties agree as follows:
1. OBLIGATIONS OF ATS
Except as otherwise provided herein, ATS shall design, develop,
construct and install the Systems and supply the deliverables as
described in:
A. ATS Quotation C1-99-104 Rev 1 dated April 28, 1999;
B. Addendum to Quote #C1-99-104 Rev. 2 dated August 10, 1999;
C. Addendum to Quote #C1-99-104 Rev. 2.2 dated August 27, 1999;
D. Updated Pricing Rev. 2.3 dated November 5, 1999; and
E. Updated Pricing Rev. 2.4a dated February 14, 2000.
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which documents are attached hereto as Appendix A (collectively, the
"Bid"). The individual specified automated manufacturing systems (each a
"System", collectively, the "Systems") described in the Bid to be
supplied by ATS include the following specified Systems:
1. A Prototype/Pilot Line - Sensor Fabrication and Final Assembly
as described in Section 8.1 and in the Pilot Plating Line
Appendix of the Bid (the "Pilot Line");
2. A High Volume Sensor Fabrication and final Assembly Line #1 as
described in Section 8.2 of the Bid (the "Fabrication and
Assembly Line"); and
3. A Packaging/Cartoning System as described in Section 8.4 of the
Bid (the "Packaging Line").
The parties have agreed that, notwithstanding their inclusion in the Bid
documents, the following items have been deleted from the original scope
and that ATS shall not construct, install or supply such items:
(a) the High Volume Line - System #2, as described in Section 8.3 of
the Bid;
(b) the Peer software described in Section 8.2 of the Bid;
(c) the options described in Section 8.5 of the Bid; or
(d) any deliverables described in the Bid related to (a), (b) or (c)
above.
The parties also contemplate that further scope or other changes may be
desirable and agree that same may be made by further addenda, by change
orders, or by other documents signed by both parties.
2. PRICE
In consideration of the services and deliverables to be provided by ATS
pursuant to this Agreement and subject to the terms and conditions
hereof, MiniMed agrees to pay ATS Eleven Million, One Hundred Fifty
Eight Thousand, Six Hundred Eighty Two Dollars ($11,158,682) (the "Total
Price"). The consideration shall be paid as follows:
- 25% of the Total Price (less any sums paid by MiniMed to ATS
pursuant to the PO) upon execution of this Agreement;
- 25% of the price of each System (as indicated in the Bid) upon
final design approval by MiniMed of such System to be designed,
manufactured and installed;
- 25% of the price of each System (as indicated in the Bid) upon
approval of such System by MiniMed in accordance with this
Agreement at ATS' facility;
- 25% of the price of each System (as indicated in the Bid) within
30 days of delivery, installation, qualification and Acceptance,
as defined in Section 27 hereof, by MiniMed, in accordance with
this Agreement, of each such System.
3. SCHEDULE OF DELIVERIES
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ATS shall meet all of the milestones indicated in Appendix B to this
Agreement on the dates indicated in Appendix B.
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4. DELAYS IN DELIVERY
A. ATS shall not be liable for delays in delivery or performance,
or for failure to manufacture, deliver or perform under this
Section, due to:
(i) an act of God, an act of civil or military authority,
Governmental priority, strike or other labor
disturbance, flood, epidemic, war, riot, or other cause
beyond the reasonable control of ATS ("Force Majeure
Delay"); or
(ii) an act, or failure to act, by MiniMed that MiniMed knew
or should have known would delay the performance of ATS
under this Agreement ("Permissible Delay").
ATS will notify MiniMed promptly of any material delay excused
by Section 4A(i) and will specify the revised delivery date as
soon as practicable.
B. In the event of any such Force Majeure Delay or Delays of an
aggregate of less than 90 days for any one System, there will be
no termination and the date of delivery or of performance shall
be extended for a period equal to the time lost by reason of
such delay. If ATS' performance is delayed by a Force Majeure
Delay or Delays by an aggregate of 90 days or more for any one
System, MiniMed, at its sole discretion, shall have the option,
exercisable only on notice to ATS within 10 days of the
expiration of such 90 day delay, to terminate this Agreement in
accordance with Sections 19.D.
C. In the event of any Permissible Delay there will be no
termination and the date of delivery or of performance shall be
extended for a period equal to the time lost by reason of such
delay.
D. If ATS fails to deliver any System in accordance with the
delivery date for same set out in Appendix B (as such delivery
date may be revised in accordance with Section 4.A(i) (Force
Majeure Delays), Section 4.A(ii) (Permissible Delay), Section 8
(changes by MiniMed) or any written agreement of the parties),
ATS shall be entitled to an aggregate grace period of 90 days
for each System. During such aggregate 90 day grace period there
will be no termination of the Agreement and no costs, expenses,
damages or other monies howsoever characterized shall accrue by
ATS to MiniMed or by MiniMed to ATS. If such failure to deliver
is due to the inability to develop an Overmolded Sensor (as
defined below) acceptable to both parties, then the rights and
remedies of the parties shall be governed by Section 4E
hereunder. In this Agreement, "Overmolded Sensor" means a sensor
to measure glucose levels in human body tissue via a flexible
printed circuit on a polyamide substrate that has been stiffened
with a thermoplastic polyurethane elastomer to provide geometric
features and rigidity to the flexible printed circuit. The
geometric features enable a modified needle (cannula) to deliver
the sensor into the body tissue. The
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rigidity of the stiffened sensor allows the needle to be
withdrawn leaving the sensor implanted in the body. If ATS fails
to deliver any System within such aggregate 90 day grace period
for any other reason, then MiniMed shall be entitled to
terminate this Agreement and:
(i) MiniMed shall be entitled to complete the Systems (or
contract with one or more third parties to complete the
Systems), in which case ATS shall indemnify MiniMed for
any reasonable direct costs incurred by MiniMed in
connection with the completion of the Systems so that
MiniMed is not required to spend more in total for the
Systems than the price specified in the Bid for such
Systems. Within thirty (30) days of completion of such
Systems by MiniMed, MiniMed shall provide ATS with an
accounting of MiniMed's costs of completion and total
cost for such Systems and ATS shall supply MiniMed with
ATS' costs for the design, development and construction
of such Systems up to the date of termination of this
Agreement by MiniMed and an appropriate adjusting
payment shall be made by each party to the other; and
(ii) ATS will not oppose, and will provide MiniMed with
reasonable assistance toward, the completion of the
Systems by a third party (the "Completing Party") and
will permit the use of such business, technical or
confidential information reasonably necessary to
complete the System, provided that the Completing Party
shall first agree in writing that it is bound by the
confidentiality obligations imposed on MiniMed herein
and will use ATS confidential information solely to
complete the Systems.
Notwithstanding the foregoing, Force Majeure Delays shall not
receive a grace period in addition to the 90 days specified in
Section 4B.
E. If delivery of any System is delayed past its due date pursuant
to Appendix B by the inability of ATS to develop an Overmolded
Sensor acceptable to both parties, ATS shall be entitled to a
grace period of 180 days to attempt to deliver such System.
During such 180 day period, both parties shall utilize
reasonable best efforts to complete and deliver the Overmolded
Sensor. Moreover, during such 180 day grace period there will be
no termination of the Agreement and no costs, expenses, damages
or other monies howsoever characterized shall accrue by ATS to
MiniMed or by MiniMed to ATS. If ATS fails to deliver such
System within such 180 day grace period, then
(i) ATS shall be obligated to complete the balance of such
System and deliver same to MiniMed, and MiniMed shall
pay ATS the full price stated in the Bid for such System
less the price of the Overmolded Sensor as identified in
the Bid;
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(ii) MiniMed shall be entitled at its sole expense, to
complete the Overmolded Sensor (or contract with one or
more third parties to complete the Overmolded Sensor);
(iii) ATS will not oppose, and will provide MiniMed with
reasonable assistance toward, the completion of the
Overmolded Sensor by a third party (the "Completing
Party") and will permit the use of such business,
technical or confidential information reasonably
necessary to complete the Overmolded Sensor, provided
that the Completing Party shall first agree in writing
that it is bound by the confidentiality obligations
imposed on MiniMed herein and will use ATS confidential
information solely to complete the Overmolded Sensor;
and
(iv) this Agreement may be terminated by either party upon
written notice to the other party after the expiration
of the 180 day grace period, and neither party shall
have any claim against the other thereafter except a
claim to enforce performance of the sole and exclusive
remedies provided in this Section 4E.
5. CONFIDENTIALITY
A. Except as set forth below, all information disclosed by MiniMed
to ATS relative to the Systems shall be treated as confidential
and proprietary information of MiniMed and ATS shall only use
such information for the benefit of MiniMed in the rendering of
services for MiniMed and shall not otherwise use or disclose
such information to others without express, written consent of
an officer of MiniMed authorized to grant such consent. Upon
termination of this Agreement, ATS shall immediately return to
MiniMed all drawings, writings, recordings and records of every
type (including all copies thereof) embodying in any form any
confidential information of MiniMed. The foregoing limitations
of confidentiality shall not apply to:
(i) information which, at the time of disclosure to ATS, was
already in the public domain;
(ii) information which, at the time of disclosure to ATS, was
already known to ATS (except information previously
acquired by ATS directly or indirectly from MiniMed or
from a third party under a continuing obligation of
confidence to MiniMed);
(iii) information which, after disclosure to ATS, becomes part
of the public domain through no fault of ATS; or
(iv) information received by ATS from a third party not owing
a duty of confidentiality.
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B. ATS agrees that in rendering services to MiniMed, ATS shall
disclose to MiniMed only information which ATS has the right to
freely disclose without MiniMed incurring legal liability to or
violating rights of others. Furthermore, ATS shall use its
reasonable best efforts to keep all of its activities for
MiniMed of a confidential nature. ATS may disclose the details
of such activities only to those officers, directors, employees
or agents that need to know such information in order for ATS to
conduct such activities.
C. ATS shall place all equipment and materials proprietary to
MiniMed (including the Systems) in a limited access area which
shall not be viewable from outside such area. All materials
shall be returned to MiniMed or certified destroyed upon
completion of the project.
D. MiniMed agrees that in providing information to ATS, MiniMed
shall disclose to ATS only information which MiniMed has the
right to freely disclose without ATS incurring legal liability
to or violating the rights of others.
6. INVENTIONS, PATENTS, WORKS OF AUTHORSHIP
All original ideas, inventions, developments and improvements conceived
and reduced to practice and works of authorship generated by ATS, alone
or with others, during the term of this Agreement relating to the design
and development of the Systems shall be the exclusive property of
MiniMed ("MiniMed IP").
A. ATS AGREES TO:
(i) promptly and fully disclose in writing to MiniMed all
such MiniMed IP,
(ii) assign all such MiniMed IP to MiniMed,
(iii) assist MiniMed, at MiniMed's expense, in obtaining
patents and copyrights on MiniMed IP,
(iv) execute all documents reasonably necessary to obtain
such patents and copyrights in the name of MiniMed, and
(v) maintain all information relative to such MiniMed IP as
confidential information of MiniMed subject to the
obligations of confidentiality set forth in Section 5
hereof.
B. MINIMED AGREES TO:
(i) promptly grant to ATS a nonexclusive irrevocable
world-wide royalty-free perpetual right and license to
use MiniMed IP which relate to automation
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technology and which are not dependent on confidential
information of MiniMed ("Automation IP").
(ii) Notwithstanding the foregoing, MiniMed does not grant
ATS any rights to use MiniMed IP or Automation IP on any
application related to the production of any glucose
sensor technology other than to perform their duties and
obligations described herein. MiniMed does not grant ATS
any rights to original ideas, inventions, developments
and improvements not conceived or reduced to practice or
works of authorship not generated by ATS, alone or with
others.
(iii) Notwithstanding any other provision of this Section 6,
ATS does not grant MiniMed developed at any time other
than during the course of performing services for
MiniMed under this Agreement ("ATS Proprietary IP").
With respect to any such ATS Proprietary IP incorporated
into the services or deliverables under this Agreement,
ATS grants MiniMed a non-exclusive, irrevocable,
worldwide, royalty-free, perpetual, non-assignable right
and license for internal use by MiniMed for the purpose
specified in the Bid, within any System supplied
hereunder, and not for resale or duplication.
The provisions of this Section 6 shall survive the termination of this
Agreement.
7. EXCLUSIVITY
ATS agrees that, in order to induce MiniMed into entering into this
Agreement, and to protect the valuable trade secrets of MiniMed, ATS
will not perform any services relating to the design or implementation
of an automated system to manufacture sensors to be used by individuals
with diabetes (a) for a period terminating three (3) years from the
expiration of the Agreement, or (b) until January 1, 2004, whichever
occurs first. This Section 7 shall survive the termination of this
Agreement unless this Agreement is terminated by ATS pursuant to Section
18 hereof.
8. CHANGES BY MINIMED
MiniMed is responsible for any increased costs reasonably incurred by
ATS as a result of a change in MiniMed's specifications for the Systems
and appearing in the Bid. In such case, the parties shall negotiate a
reasonable adjustment to the pricing to reflect the changes dictated by
the new specification and the parties shall agree on a revised schedule
of deliverables and shall amend Appendix B to reflect such agreement. If
such change is implemented, with the written approval of MiniMed, prior
to such an agreement being reached and the parties cannot agree on a
reasonable adjustment to pricing and a revised schedule within 30 days
of the date ATS first notifies MiniMed of ATS' estimate of the increased
costs and revised schedule,
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either party may apply to have the matter determined by arbitration as
provided in Section 34 hereof.
9. REPRESENTATION AND WARRANTIES OF ATS
A. ATS represents and warrants the following to MiniMed (in
addition to any other representations and warranties contained
in the Bid), as an inducement to MiniMed to execute this
Agreement:
(i) ATS is financially solvent, able to pay all its debts as
they mature and possesses sufficient working capital to
complete all of its obligations hereunder;
(ii) ATS is able to furnish the plant, tools, materials,
supplies, equipment and labor required to perform its
obligations hereunder and has sufficient experience and
competence to do so;
(iii) ATS or its relevant affiliate is authorized to do
business in the State of Oregon and/or the Province of
Ontario in the country of Canada and properly licensed
by all necessary governmental and public and
quasi-public authorities having jurisdiction over them
and over the Agreement;
(iv) that the execution of this Agreement and ATS'
performance hereunder is within its duly authorized
powers and will not conflict with any other contract or
obligation of ATS ;
(v) that ATS' duly authorized representatives have visited
the site where the Pilot Line will be located, reviewed
the plans for facilities currently under construction to
house the other Systems, familiarized themselves with
the local conditions under which it will perform and
correlated their observations with the requirements of
this Agreement;
(vi) that ATS is a large, sophisticated manufacturer of
automated manufacturing systems who possesses a high
level of experience and expertise in the design,
implementation, administration, construction,
installation and management of projects of the size,
complexity and nature of the Systems and will perform
its obligations hereunder with the care, skill and
diligence of such a manufacturer; and
(vii) ATS warrants that all Systems or other products and
parts thereof, including any software, hardware,
components or other elements thereof, furnished or to be
furnished to MiniMed hereunder (the "ATS Products")
shall be delivered free of any rightful claim of any
third party for
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infringement of any valid patent, trademark or other
proprietary intellectual property of a third party,
subject to the ownership, licenses and other rights and
obligations specifically provided in Sections 6 and 28.
B. MiniMed represents and warrants the following to ATS (in
addition to any other representations and warranties contained
in this Agreement) as an inducement to ATS to execute this
Agreement:
(i) MiniMed is financially solvent, able to pay all its
debts as they mature and possesses sufficient working
capital and resources to complete all of its obligations
hereunder;
(ii) MiniMed has sufficient rights to possession of the real
and personal property in the state of California where
ATS is to install the Systems to allow ATS to fulfill
its obligations hereunder and MiniMed has full authority
to authorize ATS to install the Systems there;
(iii) MiniMed is authorized to do business and hold property
in the state of California and is properly licensed by
all necessary governmental and public and quasi-public
authorities having jurisdiction over MiniMed and over
the Agreement;
(iv) that the execution of this Agreement and MiniMed's
performance hereunder is within its duly authorized
powers and will not conflict with any other contract or
obligation of MiniMed;
(v) that MiniMed has disclosed to ATS the site in California
where the Pilot Line will be located, disclosed the
plans for the facilities currently being constructed by
MiniMed to house the Systems and other systems and has
disclosed to ATS all local or other conditions known to
MiniMed at the time of execution of this Agreement which
might reasonably impact the cost or time of performance
by ATS of its obligations under this Agreement;
(vi) that MiniMed is a large, sophisticated developer,
manufacturer and marketer of medical devices who
possesses experience and expertise in manufacturing
sensors for the measurement of glucose and in obtaining
any necessary FDA approvals for the Systems, and will
perform its obligations hereunder with the care, skill
and diligence of such a company.
10. INDEMNIFICATION
A. ATS shall defend, indemnify and hold MiniMed harmless from and
against any and all loss, damage and expense (including, but not
limited to, court costs, amounts paid in settlement, judgments,
reasonable attorney's fees, the allocable
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cost of in-house counsel or other expenses related to
investigation or defense) ("Damages") relating to any suit,
action, claim or other obligation ("Claim") made by a third
party and claiming infringement of intellectual property in
connection with MiniMed's use, for the purposes specified in the
Bid, of the ATS Products or any component thereof.
In case any ATS Product is held in such suit to constitute an
infringement and the use of said ATS Product for its use
specified in this Agreement or in the Bid is enjoined, ATS
shall, at its expense and option, either procure for MiniMed the
right to continue to use the said product or part, or replace
same with a non-infringing product or part, or modify same so it
becomes non-infringing.
B. The preceding Section 10A shall not apply to:
(i) any product or part which is modified or manufactured to
MiniMed's design to the extent MiniMed's design or
modification causes the infringement; or
(ii) the use of any ATS Product furnished to MiniMed in
combination with other products not furnished by ATS,
unless the ATS Product, per se, infringes the asserted
patent;
(iii) any infringement relating to MiniMed's prescribed
manufacturing processes and MiniMed's confidential and
proprietary information provided hereunder; or
(iv) any product of a third party incorporated in the ATS
Products as specified by MiniMed.
As to any such excluded product or part thereof ATS assumes no
liability whatsoever for infringement and MiniMed shall hold ATS
harmless against any infringement claim arising therefrom.
C. Each party (the "Indemnifying Party") hereto shall defend,
indemnify and hold the other (the "Indemnified Party") harmless
from and against any and all loss, damage and expense
(including, but not limited to, court costs, amounts paid in
settlement, judgments, reasonable attorney's fees and the
allocable cost of in-house counsel or other expenses related to
investigation or defense) relating to any suit, action, claim or
other obligation made by a third party and arising out of the
negligence or willful misconduct of the Indemnifying Party.
D. An Indemnified Party shall notify, in writing, the Indemnifying
Party within fifteen (15) days of the assertion of any claim or
discovery of any fact upon which the Indemnified Party intends
to base a claim for indemnification.
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An Indemnified Party's failure to so notify the Indemnifying
Party shall not, however, relieve such Indemnifying Party from
any liability under this Agreement to the Indemnified Party with
respect to such claim except to the extent that such
Indemnifying Party is actually denied, during the period of
delay in notice, the opportunity to remedy or otherwise mitigate
the event or activity(ies) giving rise to the claim for
indemnification and thereby suffers actual prejudice as a result
of such failure. The Indemnifying Party, while reserving the
right to contest its obligations to indemnify hereunder, shall
be responsible for the defense of any claim, demand lawsuit or
other proceeding in connection with which the Indemnified Party
claims indemnification hereunder. The Indemnified Party shall
have the right at its own expense to participate jointly with
the Indemnifying Party in the defense of any such claim, demand,
lawsuit or other proceeding, but with respect to any issue
involved in such claim, demand, lawsuit or other proceeding with
respect to which the Indemnifying Party has acknowledged its
obligation to indemnify the Indemnified Party hereunder, the
Indemnifying Party shall have the right to select counsel
(reasonably satisfactory to Indemnified Party), settle, try or
otherwise dispose of or handle such claim, demand, lawsuit or
other proceeding on such terms as the Indemnifying Party shall
deem appropriate, subject to any reasonable objection of the
Indemnified Party. Notwithstanding the foregoing, Indemnifying
Party shall not settle any suit or proceeding against
Indemnified Party without Indemnified Party's written consent
which shall not be unreasonably withheld.
E. This Section 10 states the entire liability of ATS or MiniMed
for infringement of any proprietary intellectual property right
of a third party and for defence, indemnification and the
holding harmless of others in respect of same.
11. NON-DISCLOSURE OF AGREEMENT
Unless required by law, or on a confidential basis with such party's
financial and/or legal advisors, neither party hereto shall release any
information to any third person with respect to the terms of this
Agreement without the prior written consent of the other party. This
prohibition includes, but is not limited to, press releases, educational
and scientific conferences, promotional materials, public officials, and
the media. Notwithstanding any other provision of this Section 11, and
upon at least twenty-four (24) hours notice to the other party hereto,
either party shall be permitted to release information as required by a
court order or order of a regulatory agency with jurisdiction over such
party, pursuant to state, provincial or federal laws or regulations, or
pursuant to the rules of an applicable stock exchange or the NASDAQ
National Market.
12. RELATIONSHIP OF PARTIES
No agency relationship or partnership exists between the parties. No
party (or any of its shareholders, employees, officers, investors or
agents) has the right to enter into a contract on behalf of or as an
agent or representative of the other party.
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13. WARRANTIES
Subject to MiniMed following the prescribed reasonable maintenance and
service procedures on the Systems and ATS Products, ATS warrants that
the design of each System and the ATS Products delivered as part of such
System will be free from defects in workmanship and material and conform
to specifications for the following periods (each of such periods is
hereinafter referred to as a "Warranty Period"):
(a) with respect to the Pilot Line System, from the date of the
Final Acceptance Certificate (as defined in Section 27 hereof)
for the Pilot Line and for twelve months thereafter; and
(b) with respect to the Fabrication and Assembly Line System and the
Packaging Line System, from the date of the Final Acceptance
Certificate for whichever of such two Systems is last issued and
for twelve months thereafter.
Notwithstanding the foregoing, if ATS utilizes any component or product
manufactured by a third party as part of any System, and the warranty
provided to ATS on such component or product extends longer than the
Warranty Period provided by ATS herein, MiniMed shall receive the
benefit of such additional warranty coverage. This warranty shall
survive the termination or expiration of this Agreement as provided
herein.
THIS WARRANTY EXCLUDES CONSUMABLE PARTS, TO THE EXTENT THAT BY THEIR
NATURE REQUIRE PERIODIC REPLACEMENT. EXCEPT WITH RESPECT TO
NON-INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS AS PROVIDED IN SECTION
10, ATS MAKES NO OTHER WARRANTY, EXPRESSED OR IMPLIED, AND HEREBY
EXPRESSLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
During the Warranty Period, ATS will make, at ATS' cost, such repairs,
adjustments, or replacements as are necessary in order to comply with
the warranty provided in this Section 13. The choice of repairing,
adjusting or replacing shall be at ATS' option. ATS shall utilize its
best efforts to initiate such repairs, adjustments, or replacements
within Twenty Four (24) hours of learning of the need for such
activities from MiniMed. If possible, such repairs, adjustments or
replacements shall be made at the Systems' installed location. If repair
at the installed location is not possible, MiniMed agrees to return the
defective parts to ATS at ATS's expense. ATS will return parts to the
MiniMed at ATS' cost.
14. ENTIRE AGREEMENT
The agreements and conditions set forth herein, as well as those
incorporated herein by reference to the Bid, constitute the entire
contract between ATS and MiniMed and
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supersedes all prior correspondence, quotations and other
communications, either oral or written. This Agreement may only be
amended in writing executed by both parties hereto. The failure of
either party to object to any breach of any provision of this Agreement,
shall not constitute a waiver by such party of such provision and shall
not be construed as a general waiver, abandonment, modification or
amendment of any of the terms, conditions or provisions of this
Agreement.
15. DELIVERY, TITLE, RISK OF LOSS
Unless otherwise specified by ATS, delivery will be made F.O.B. ATS'
facility in Corvallis, Oregon to MiniMed, skidded for domestic truck
shipment. Any export or other special packing or special transportation
charges shall be charged to and paid by MiniMed. Except as otherwise
provided herein, MiniMed shall be responsible for the reasonable cost of
freight transportation, insurance, shipping, storage, duty brokerage,
handling demurrage, or similar charges once the System, or components
thereof, leave Corvallis. Risk of loss or damage passes to MiniMed upon
delivery, provided, however, that if the Systems are damaged by
representatives of ATS during installation or qualification, ATS will
repair such damage at ATS' sole expense. Title to any System and all
components thereof will not pass to MiniMed until payment has been
received in full by ATS.
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16. CONFLICT
In case any of the provisions of the Bid or the PO conflict with this
Agreement, the provisions of this Agreement shall govern.
17. TAXES
In addition to any price specified herein, MiniMed shall pay the gross
amount of any present or future sale, use, excise, value added, or other
similar tax applicable to the price, sale or delivery of any products or
services furnished hereunder or to their use by ATS or MiniMed, or
MiniMed shall furnish ATS with evidence of exemption acceptable to the
taxing authorities.
18. TERMINATION BY ATS
This Agreement may be terminated by ATS upon delivery to MiniMed of
written notice of its election to do so:
A. If MiniMed defaults in the performance of any of its obligations
under this Agreement (except for circumstances described in
Sections 18D hereof) and, within 30 days after delivery of
written notice from ATS of such default, MiniMed fails to cure
the same or, if such default does not involve the payment of
money and cannot be cured within said 30-day period, MiniMed
fails to commence or to diligently proceed with the curing of
such default;
B. If Any material representation or warranty of MiniMed set forth
in this Agreement proves to be false or misleading in any
material respect; or
C. If MiniMed makes a general assignment for the benefit of
creditors, or admits in writing its inability to pay its debts
as they become due; or files a petition in bankruptcy or is
adjudicated a bankrupt or insolvent or files a petition seeking
any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or
future statute, law or regulation; or files an answer admitting
or fails reasonably to contest the material allegations of a
petition filed against it in any such proceeding; or seeks or
consents to or acquiesces in the appointment of any trustee,
receiver or liquidator of it or any material part of its assets
(the term "acquiesce" includes but is not limited to the failure
to file a petition or motion to vacate or discharge any order,
judgment or decree within 30 days after its entry); or within 90
days after the commencement of any proceedings against MiniMed
seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under
any present or future statute, law or regulation, such
proceeding has not been dismissed; or within 90 days after the
appointment, without the consent or acquiescence of MiniMed, of
any trustee, receiver or liquidator of MiniMed or of any
material part of its assets, such appointment has not been
vacated.
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D. Pursuant to Section 4E hereof.
19. TERMINATION BY MINIMED
This Agreement may be terminated by MiniMed upon delivery of written
notice of its election to do so to ATS:
A. If ATS defaults in the performance of any of its obligations
under this Agreement (except for delays in delivery addressed in
Section 4 or other circumstances described in Sections 19B, 19C,
19D, 19E, 19F, 19G or 19H hereof) and, within 30 days after
delivery of written notice from MiniMed of such default, ATS
fails to cure the same, or if such default does not involve the
payment of money and cannot be cured within such 30-day period,
ATS fails to commence or to diligently proceed with the curing
of such default;
B. If ATS makes a general assignment for the benefit of creditors,
or admits in writing its inability to pay its debts as they
become due; or files a petition in bankruptcy or is adjudicated
a bankrupt or insolvent or files a petition seeking any
reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or
future statute, law or regulation; or files an answer admitting
or fails reasonably to contest the material allegations of a
petition filed against it in any such proceeding; or seeks or
consents to or acquiesces in the appointment of any trustee,
receiver or liquidator of it or any material part of its assets
(the term "acquiesce" includes but is not limited to the failure
to file a petition or motion to vacate or discharge any order,
judgment or decree within 30 days after its entry); or within 90
days after the commencement of any proceedings against ATS
seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under
any present or future statute, law or regulation, such
proceeding has not been dismissed; or within 90 days after the
appointment, without the consent or acquiescence of ATS, of any
trustee, receiver or liquidator of ATS or of any material part
of its assets, such appointment has not been vacated;
C. If any material representation or warranty of ATS set forth in
this Agreement proves to be false or misleading in any material
respect;
D. Pursuant to Section 4B hereof;
E. Pursuant to Section 4D hereof;
F. A court of competent jurisdiction enjoins or otherwise restricts
MiniMed from use of the Systems due to a claim of infringement
in respect of which ATS has no obligation to indemnify MiniMed
pursuant to Section 11 of this Agreement;
G. If a court of competent jurisdiction enjoins or otherwise
restricts MiniMed from use of the Systems due to a claim of
infringement in respect of which ATS has an obligation to
indemnify MiniMed pursuant to Section 11 of this Agreement and
ATS is unable, within sixty (60) days of the date upon which
order of such court
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so enjoining or otherwise restricting becomes enforceable, to
either procure for MiniMed the right to continue to use the
offending product or part, or replace same with a non-infringing
product or part, or modify same so it becomes non-infringing; or
H. Pursuant to Section 4E hereof.
20. REMEDIES UPON TERMINATION/ LIMITATION ON LIABILITY
A. If ATS terminates this Agreement pursuant to Section 18 hereof
(except for any termination pursuant to 18D), ATS' sole and
exclusive remedy shall be to receive and/or retain 100% of all
payments made or due to ATS by MiniMed in respect of any System
or Systems which have been delivered at the time of termination
and to receive payment from MiniMed of 75% of the remaining
unpaid purchase price for any System or Systems which have not
been delivered by ATS plus the amount of reasonable
cancellation, restocking or other charges actually incurred by
ATS and relating to components to be used in any System or
Systems which have not been delivered by ATS.
B. If MiniMed terminates this Agreement pursuant to Section 19B, or
19F hereof, MiniMed's sole and exclusive remedy shall be to
receive from ATS a refund of all payments made to ATS under this
Agreement except for:
(i) 100% of the price for any System or Systems which have
been delivered by ATS and accepted by MiniMed; and
(ii) 75% of the price for any System or Systems which have
been delivered by ATS but not accepted by MiniMed.
If MiniMed has not paid ATS sufficient monies to satisfy
the amounts to be retained by ATS pursuant to (i) and
(ii) above, MiniMed shall promptly pay the shortfall to
ATS.
If such termination is pursuant to Section 19F, MiniMed
shall be obliged, in addition to (i) and (ii) above, to
reimburse ATS upon demand for all other costs already
incurred or non-cancelable commitments made by ATS in
connection with the design, processing, handling,
fabrication and manufacture of any undelivered System or
components thereof, plus 15% for overhead.
MiniMed would also have the right to use all designs, plans,
specifications or other intellectual property or work of
authorship generated, in part or in whole, by ATS and relating
in any way to the Systems as provided in Section 6. ATS agrees
to cooperate with MiniMed to provide them, on a timely basis
with all such
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documents.
C. If MiniMed or ATS terminates this Agreement pursuant to Section
19H or 18D hereof, respectively, such party's sole and exclusive
remedy shall be that outlined in Section 4E.
D. If MiniMed terminates this Agreement pursuant to Section 19E,
its sole and exclusive remedy shall be that outlined in Section
4D.
E. If MiniMed terminates this Agreement pursuant to Section 19D
hereof, MiniMed's sole and exclusive remedy shall be to pay to
ATS:
(i) 100% of the price for any System or Systems which have
been delivered by ATS and accepted by MiniMed;
(ii) 75% of the price for any System or Systems which have
been delivered by ATS but not accepted by MiniMed; and
(iii) The reasonable value of all other work done by ATS
pursuant to its responsibilities under this Agreement.
MiniMed would also have the right to use all designs, plans,
specifications or other intellectual property or work of
authorship generated, in part or in whole, by ATS and relating
in any way to the Systems as provided in Section 6. ATS agrees
to cooperate with MiniMed to provide them, on a timely basis
with all such documents.
F. NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT, OR
OTHERWISE, EXCEPT FOR WILLFUL MISCONDUCT INTENDED TO DEPRIVE THE
OTHER PARTY HERETO OF ITS ESSENTIAL BENEFIT OF THIS AGREEMENT,
OR AN INTENTIONAL BREACH OF THIS AGREEMENT INTENDED TO DEPRIVE
THE OTHER PARTY HERETO OF ITS ESSENTIAL BENEFIT OF THIS
AGREEMENT, IN NO EVENT, WHETHER AS A RESULT OF BREACH OF
CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE
SHALL EITHER PARTY OR ITS SUPPLIERS BE LIABLE FOR ANY SPECIAL,
CONSEQUENTIAL, INCIDENTAL OR PUNITIVE DAMAGES, INCLUDING, BUT
NOT LIMITED TO, LOSS OF PROFIT OR REVENUES, LOSS OF USE OF THE
PRODUCTS OR ANY ASSOCIATED EQUIPMENT, DAMAGE TO ASSOCIATED
EQUIPMENT, COST OF CAPITAL, COST OF SUBSTITUTE PRODUCTS,
FACILITIES, SERVICES OR REPLACEMENT POWER, DOWNTIME COSTS, OR
CLAIMS OF THE OTHER PARTY'S CUSTOMERS FOR SUCH DAMAGES. IF
MINIMED TRANSFERS TITLE TO OR LEASES ANY SYSTEM OR SYSTEMS SOLD
HEREUNDER TO ANY THIRD PARTY, MINIMED SHALL OBTAIN FROM SUCH
THIRD PARTY A PROVISION
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AFFORDING ATS AND ITS SUPPLIERS THE PROTECTION OF THE PRECEDING
SENTENCE.
G. NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT OR
OTHERWISE, EXCEPT AS PROVIDED IN SECTION 10 WITH RESPECT TO
INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS, AND EXCEPT FOR
WILLFUL MISCONDUCT BY ATS INTENDED TO DEPRIVE MINIMED OF ITS
ESSENTIAL BENEFIT OF THIS AGREEMENT OR AN INTENTIONAL BREACH OF
THIS AGREEMENT BY ATS INTENDED TO DEPRIVE MINIMED OF ITS
ESSENTIAL BENEFIT OF THIS AGREEMENT, IN NO EVENT, WHETHER AS A
RESULT OF BREACH OF CONTRACT, WARRANTY, TORT (INCLUDING
NEGLIGENCE) OR OTHERWISE, SHALL ATS' LIABILITY TO MINIMED FOR
ANY LOSS OR DAMAGE ARISING OUT OF, OR RESULTING FROM THIS
AGREEMENT, OR FROM ITS PERFORMANCE OR BREACH, OR FROM THE
PRODUCTS, SERVICES OR SYSTEMS FURNISHED HEREUNDER, EXCEED THE
TOTAL PRICE AS DEFINED IN SECTION 2.
H. NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT OR
OTHERWISE, IF ATS FURNISHES MINIMED WITH ADVICE OR OTHER
ASSISTANCE WHICH CONCERNS ANY PRODUCT SUPPLIED HEREUNDER, OR ANY
SYSTEM OR EQUIPMENT IN WHICH ANY SUCH PRODUCT MAY BE INSTALLED
AND WHICH ADVICE OR OTHER ASSISTANCE IS NOT REQUIRED PURSUANT TO
THIS AGREEMENT, THE FURNISHING OF SUCH ADVICE OR ASSISTANCE WILL
NOT SUBJECT ATS TO ANY LIABILITY, WHETHER IN CONTRACT, WARRANTY,
TORT (INCLUDING NEGLIGENCE) OR OTHERWISE.
21. GOVERNING LAW
The validity, interpretation and performance of this Agreement shall be
governed by and construed in accordance with the laws of the state of
New York, United States of America, without regard to any applicable
choice-of-law provisions of law.
22. CONSENT TO JURISDICTION
WITH RESPECT TO ANY LITIGATION ARISING OUT OF THIS AGREEMENT, THE
PARTIES EXPRESSLY WAIVE ANY RIGHT TO A JURY TRIAL AND AGREE THAT SUCH
LITIGATION SHALL BE TRIED BY A JUDGE WITHOUT A JURY. EACH PARTY AGREES
TO NON-EXCLUSIVE PERSONAL JURISDICTION AND VENUE IN THE UNITED STATES
DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA (AND ANY
CALIFORNIA STATE COURT WITHIN THAT DISTRICT) AND FOR THAT PURPOSE,
APPOINTS THE PERSON SET FORTH IN SECTION 24 HEREOF AS ITS AGENT FOR
SERVICE OF PROCESS IN SUCH JURISDICTION
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23. NO THIRD PARTY BENEFICIARIES
The provisions of this Agreement are intended solely for the benefit of
the parties hereto and are not intended to benefit any other person
other than the parties hereto.
24. NOTICES
Any notice, request, demand, waiver, consent, approval or other
communication which is required or permitted to be given to any party
hereunder shall be in writing and shall be deemed given only if
delivered to the party personally or sent to the party by telecopy (with
confirmation of receipt), telegram or by registered or certified mail
(return receipt requested) with postage and registration or
certification fees thereon prepaid, addressed to the party at its
address set forth below:
If to MiniMed:
Mr. Bill A. Calle
MiniMed Inc.
12774 San Fernando Road
Sylmar, CA 91342-9219
Fax: (818) 364-9625
With a copy to:
General Counsel
MiniMed Inc.
12774 San Fernando Road
Sylmar, CA 91342
Fax: (818) 367-1460
If to ATS:
Mr. Bob Eckert
ATS Automation Tooling Systems Inc.
250 Royal Oak Road
Box 32100, Preston Centre
Cambridge, ON N3H 5M2
Fax: (519) 653-1519
With a copy to:
Mr. Ron Jutras
ATS Automation Tooling Systems Inc.
250 Royal Oak Road
Box 32100, Preston Centre
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Cambridge, ON N3H 5M2
Fax: (519) 653-1519
25. FINANCE CHARGE
A 1% per month (12% per annum) finance charge may be assessed on past
due accounts. If legal action is required to collect amounts owed by
MiniMed to ATS, ATS is entitled to recover all reasonable collection
costs.
26. ATTORNEY'S FEES
If any party hereto brings an action or proceeding involving the subject
matter of this Agreement to enforce the terms hereof or to declare
rights hereunder, the Prevailing Party (as hereafter defined) in any
such proceeding, action, or appeal thereon, shall be entitled to
reasonable attorneys' fees (including the allocable cost of in-house
counsel). Such fees may be awarded in the same suit or recovered in a
separate suit, whether or not such action or proceeding is pursued to
decision or judgment. The term, "Prevailing Party" shall include,
without limitation, a party who substantially obtains or defeats the
relief sought, as the case may be, whether by compromise, settlement,
judgment, or the abandonment by the other party of its claim or defense.
The attorney's fees award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all
attorneys' fees reasonably incurred.
27. SYSTEM ACCEPTANCE
Acceptance testing, to the performance standards set out in the Bid,
will be conducted at the ATS facility prior to shipment of the System.
Such acceptance testing shall be conducted over a maximum of three
eight-hour production days, unless a different period is specified in
the Bid. Such acceptance testing shall be witnessed by MiniMed and upon
successful completion of the prescribed tests, MiniMed shall immediately
deliver to ATS a written acceptance certificate signed by MiniMed which
shall be ATS' authorization to ship the System to MiniMed's facility.
Upon receipt of the System in MiniMed's facility, MiniMed shall, with
the assistance of ATS if so contracted, install the System. Upon
completion of such installation MiniMed shall conduct the acceptance
testing which shall demonstrate that the System meets the performance
standards set out in the Bid over a period of three (3) eight-hour
production days. ATS shall witness such acceptance testing. Upon
successful completion of such acceptance testing, MiniMed shall accept
the System and MiniMed shall immediately provide ATS with a written
final acceptance certificate signed by MiniMed ("Final Acceptance
Certificate").
ATS and MiniMed agree to cooperate and use their best efforts to ensure
that all installation and acceptance testing on the System is performed
without delay. In the event MiniMed is responsible for installation of
the System, such installation shall be
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completed no later than 21 days from the date of receipt of the System
in MiniMed's facility. In the event MiniMed is unable, or unwilling to
commence acceptance testing within three days of completion of the
installation of the equipment, and the resulting delay is not the result
of ATS's failure to complete its responsibilities under this contract,
MiniMed shall be deemed to have delivered to ATS the Final Acceptance
Certificate for the equipment. Where MiniMed has so delayed the
acceptance testing, MiniMed shall pay ATS all costs incurred by ATS to
return to MiniMed's installation site and to conduct acceptance testing
at a later date.
MiniMed, at its expense, shall provide all necessary consumable supplies
required to test and operate the System (i.e. solder, flux, adhesives,
required chemicals, oil, grease, etc.). The condition of the
installation site in MiniMed's facility, general housekeeping, voltage
fluctuations, oil, defective parts and presence of foreign matter will
adversely affect the operation of the System. MiniMed, at its expense,
is responsible for ensuring that the installation site is ready for the
System at the date of delivery and for correcting any deficiencies in
the installation site.
28. SOFTWARE LICENSES
The ATS Products to be supplied hereunder may use computer software,
Computer software which is custom developed by ATS specifically for
MiniMed under the terms of this Agreement ("Custom Software") shall be
delivered to MiniMed with the ATS Products, including source code, and
all title, right and interest in such Custom Software shall vest in
MiniMed upon full payment for equipment. Computer software of third
party vendors may also be integrated into the ATS Products ("Third Party
Software"), ATS shall assign all rights, afforded under the licenses for
any such Third Party Software to MiniMed and MiniMed shall assume all
non-financial obligations under any such software licenses. The ATS
Products may also include software that has been developed by ATS, at
ATS expense, for general use in ATS products ("ATS Standard Software")
and is proprietary to ATS. Upon full payment for the ATS Products, such
ATS Standard Software shall be licensed to MiniMed for use solely to
operate and maintain the ATS Products. This shall in no way effect the
warranties made by ATS in Section 13.
29. CUSTOMER PARTS AND SAMPLES
Customer parts tolerances are critical to the successful operation of
vibratory feeder bowls, magazine feeders, fixtures, tooling and other
aspects of the System or ATS Products. The Bid is based upon the
prescribed customer parts tolerances supplied in drawings or in sample
parts provided at the time of preparing the Bid. MiniMed shall supply
ATS with engineering drawings for such customer parts at the time the
related ATS Product is ordered. Significant changes in customer part
tolerances from those used to prepare the Bid shall be a MiniMed change
(see Section 8).
MiniMed, at its expense shall also provide to ATS reasonable qualities
and quantities of known good customer parts for:
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(i) machine design;
(ii) test equipment R&R studies;
(iii) debugging of ATS Products;
(iv) acceptance testing; and
(v) such other activities as may be reasonably required by ATS to
design, build, install and test the System and ATS Products to
be supplied to MiniMed hereunder.
30. SUCCESSORS AND ASSIGNS
The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns; provided, however, that no party may assign, delegate or
otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other party hereto, except that (a) MiniMed
may assign its rights under this Agreement to any affiliate, provided
that MiniMed's obligations to pay ATS and to indemnify ATS as set out in
this Agreement shall be joint and several with such affiliate, and
provided that ATS shall be sent a copy of the instrument evidencing the
assignment forthwith upon execution thereof.
31. SEVERABILITY
The parties agree that (a) the provisions of this Agreement shall be
severable in the event that any provision hereof (or part thereof) is
held by a court of competent jurisdiction to be invalid, void or
otherwise unenforceable, (b) such invalid, void or otherwise
unenforceable provision (or part thereof) shall be automatically
replaced by another provision which is as similar as possible in terms
to such invalid, void or otherwise unenforceable provision (or part
thereof) but which is valid and enforceable and (c) the remaining
provisions shall remain enforceable to the fullest extent permitted by
law.
32. COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but which together shall constitute
one and the same instrument
33. HEADINGS
The headings preceding the text of the sections and subsections hereof
are inserted solely for convenience of reference, and shall not
constitute a part of this Agreement nor shall they affect its meaning,
construction or effect.
34. ARBITRATION
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The parties agree to submit disputes between them arising out of or
related to this Agreement or the breach, alleged breach or
interpretation thereof to binding arbitration. One arbitrator will be
selected under the then current rules of the American Arbitration
Association ("AAA") pertaining to commercial disputes within thirty (30)
days of either party notifying the other that it is submitting a dispute
to arbitration. The arbitration shall be held in the state of Illinois
(and in the city of Chicago unless the parties otherwise agree) and
shall be conducted in accordance with the Commercial Arbitration rules
of the AAA except the AAA shall not have authority to make any award for
damages excluded herein. The arbitration award shall be by a written
decision and shall be final and binding and enforceable by any court of
competent jurisdiction.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first written above.
ATS MINIMED
ATS AUTOMATION TOOLING SYSTEMS, INC. MINIMED INC.
By /s/ RON JUTRUS By /s/ DAVID MORLEY
------------------------------- -------------------------------------
Name: Ron Jutrus Name: David Morley
Title: CFO Title: Sr. Vice President, Operations
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