Exhibit 10.1
OEM SUPPLY AGREEMENT
This OEM SUPPLY AGREEMENT ("Agreement") is made and entered into as of
September 1, 2005 (the "Effective Date"), by and between Medtronic Inc. ("MDT"),
a Minnesota corporation with a place of business at 7611 Northland Drive,
Brooklyn Park, MN 55428, and ThermoGenesis Corp. ("TGC"), a Delaware corporation
with its principal place of business at 2711 Citrus Road, Rancho Cordova, CA
95742.
RECITALS
A. WHEREAS, TGC sells thrombin processing disposables and reagent and
is in the process of obtaining United States Food and Drug Administration (FDA)
approval for a thrombin product as a component of its CryoSeal(R) FS product;
B. WHEREAS, MDT distributes and sells medical device products around
the world and desires to distribute an OEM Product (as defined below) that is
manufactured by TGC, and
C. WHEREAS, TGC desires to allow MDT to distribute an OEM version of a
product that it manufactures solely for use and sale in conjunction with MDT
Magellan Product (as defined herein).
NOW, THEREFORE, in consideration of the above recitals and in
consideration of the mutual agreements and undertakings set forth below, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
Section 1. Certain Definitions
1.1 Affiliate. For purpose of this Agreement, "Affiliate" means any
company, corporation, or business in which MDT owns or controls at least fifty
percent (50%) of the voting stock.
1.2 Confidential Information. For purposes of this Agreement, "Confidential
Information" means all non-public information, whether in written, oral or any
other form, including, without limitation, data, documentation, specifications,
know-how, technical information, designs, drawings, plans, blueprints, business
plans, customer lists, pricing information, forecasts, projections, analyses,
and manufacturing processes that the disclosing party (the "Disclosing Party")
disclosed to the other party (the "Receiving Party") or allowed the Receiving
Party to observe, in the course of the activity under this Agreement. All
Confidential Information must be marked at the time of disclosure or observation
as being "Confidential", "Proprietary" or in some other manner to indicate its
confidential nature; provided, however, that if such information is not or
cannot be so marked at the time of disclosure or observation, the information
shall still qualify as Confidential Information if the Disclosing Party
designates such information as confidential to the Receiving Party in writing
within thirty (30) days of disclosure or observation. Notwithstanding the
foregoing, Confidential Information shall not include information that the
Receiving Party can demonstrate (a) was known to the Receiving Party on a
non-confidential basis prior to the disclosure by the Disclosing Party, (b) has
become publicly available without fault of the Receiving Party; or (c) was
independently developed without the use of Confidential Information by the
Receiving Party.
In addition to the other requirements contained in this Section 1.2, all
disclosures of Confidential Information by TGC to MDT made after the date of
this Agreement shall be made only upon the specific request of MDT made to TGC
and only to the person identified by MDT in writing to TGC as the designated
recipient of Confidential Information from TGC. Following the date of this
Agreement, any information provided to MDT by TGC other than as required by this
Section 1.2 shall not be deemed Confidential Information.
1.3 First Article. For purposes of this Agreement, "First Article" means
that TGC (i) has prepared and delivered to its notified body a completed
technical file for Thrombin Processing Device (TPD) Device (as defined below) to
meet CE Mark certification requirements, and (ii) manufactured and delivered the
first production article of the OEM Product.
1.4 Improvement. "Improvement" means (a) for copyrightable or copyrighted
material relating to the OEM Product, any translation, abridgment, revision or
other form in which an existing work may be recast, transformed or adapted, (b)
for patentable or patented material, claims and any technology relating to the
OEM Product, any improvement, addition or continuation thereon, and (c) for
material which is protected by trade secret or technology relating to the OEM
Product, any new material or other technology derived from such existing trade
secret material, including new material which may be protected under copyright,
patent and/or trade secret laws; provided however, that for purposes hereof,
"Improvement" shall not include a means of producing thrombin from a source
material that is different from plasma.
1.5 Intellectual Property Rights. "Intellectual Property Rights" means,
collectively, Patents, Trade Secrets, Copyrights, Trademarks, trade names,
rights in trade dress and all other intellectual property rights and proprietary
rights, whether arising under the laws of the United States or any other state,
country or jurisdiction in the world, including all rights or causes of action
for infringement or misappropriation of any of the foregoing. For purposes of
this Agreement: (a) "Patents" shall mean all patent rights and all right, title
and interest in all letters patent or equivalent rights and applications,
including provisional applications, for letters patent or rights, industrial and
utility models, industrial designs, petty patents, patents of importation,
patents of addition, certificates of invention and other government issued or
granted indicia of invention ownership, including any reissue, extension,
division, continuation or continuation-in-part applications throughout the
world; (b) "Trade Secrets" shall mean all right, title and interest in all trade
secrets and trade secret rights arising under common law, state law, federal law
or laws of foreign countries; (c) "Copyrights" shall mean all copyrights, and
all other literary property and authorship rights, and all right, title, and
interest in all copyrights, copyright registrations, certificates of copyright
and copyrighted interests throughout the world; and (d) "Trademarks" shall mean
all right, title and interest in all trademark, service mark, trade name and
trade dress rights arising under the common law, state law, federal laws and
laws of foreign countries, and all right, title, and interest in all trademark,
service mark, trade name and trade dress applications and registrations
interests throughout the world.
1.6 OEM Product. "OEM Product" means the version of the Thrombin Processing
Device (TPD) manufactured and sold to MDT by TGC under this Agreement and that
meets the performance specification according to section 3.1, which incorporates
the modifications more fully described in Section 3.1. The OEM Product shall be
manufactured and sterilized for MDT by TGC under this Agreement.
1.7 Person. "Person" means any natural person or any corporation,
partnership, limited liability company, business association, joint venture or
other entity.
1.8 MDT Magellan Product. "MDT Magellan Product" means MDT's Magellan
Product as more fully described and set forth in Exhibit A.
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1.9 Thrombin Technologies. "Thrombin Technologies" means TGC's thrombin
disposables and reagent and related processes, know-how, documentation, patents,
patents pending , and Confidential Information.
1.10 Territory. "Territory" means Worldwide.
1.11 TGC Point of Shipment. "TGC Point of Shipment" as defined in the
Uniform Commercial Code refers to TGC's manufacturing facilities.
1.12 Thrombin Processing Device. Thrombin Processing Device "TPD Device"
means the Thrombin Processing Device designed, manufactured, sterilized, and
sold by TGC, including both the syringes and the reagent, for which TGC
currently holds a CE Mark.
Section 2. Grant of Rights
2.1 Terms and Conditions of Sale.
During the term of this Agreement and subject to all of the terms and conditions
hereof, TGC shall supply OEM Product and MDT shall purchase OEM Product at the
transfer price according to the terms and conditions of sale set forth below for
use and sale in conjunction with the MDT Magellan Product. Nothing contained in
this Agreement shall prevent MDT from distributing any other products rightfully
manufactured or obtained by MDT on its own or from third parties. Nothing herein
shall constitute a grant of any license or rights of any kind to either party
for the use, manufacture, or sale of any of the other party's Intellectual
Property Rights except as specifically set forth herein.
2.2 Right to Improvements. As part of this agreement, and subject to the
provisions of Section 6.2, TGC will provide to MDT any Improvements to the
current Thrombin Processing Device, if and when they occur; provided, however,
in the event such Improvements materially alter the performance and/or cost of
the OEM Product TGC and MDT shall mutually agree upon the purchase price of such
Improvements to MDT.
2.3 Rights Upon a Change of Control. During the term of this Agreement, if
there is a Change of Control (as defined below), TGC hereby covenants and agrees
that it shall ensure that the rights of MDT shall continue unaffected on the
terms and conditions contained herein, and TGC shall issue to MDT a written
statement confirming such continuing rights within ten (10) business days of the
effective date of the Change of Control. For purposes hereof, a Change in
Control shall mean (i) the direct or indirect sale or other disposition (in one
or more related transactions to one or more parties) of all or substantially all
of the assets of TGC, or (ii) the direct or indirect transfer of more than 50%
of the outstanding voting interests of TGC, whether in a single transaction or
series of related transactions.
Section 3. OEM Product Design
3.1 MDT Responsibilities.
(a) MDT shall create or specify the product information data sheet
(PIDS for the OEM Product.
(b) MDT shall be responsible for preparing and approving the final
instructions for use of the OEM Product with the MDT Magellan Product.
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(c) MDT shall not use the name THERMOGENESIS CORP., or its product
names, including "Thrombin Processing Device", "CryoSeal" in any
advertising, promotional, or sales literature without the prior written
consent obtained from TGC, in each case, except that MDT shall mark the OEM
product as "Manufactured by Thermogenesis for Medtronic".
3.2 TGC Responsibilities.
(a) At the request of MDT, TGC shall review and make recommendations
on any of MDT's PIDS, labels, and packaging for MDT products as prepared
pursuant to Section 3.1(a) and (b).
(b) Subject to MDT's prior approval and agreement to pay for
non-recurring engineering charges, material testing, and lab costs, TGC may
purchase, implement, and validate as needed, all new components necessary
or desirable for the manufacture of the OEM Product under TGC's quality
control system and policies.
(c) TGC shall assist MDT, as reasonably requested by MDT and at MDT's
cost, with MDT's efforts to incorporate the OEM Product and MDT Magellan
Product delivery systems, as referenced in Section 3.1(b) above.
(d) Upon request of Medtronic, TGC shall use its best efforts to
prepare and deliver to appropriate regulatory authorities all parts of the
technical file necessary for the approval or clearance by such regulatory
authorities for marketing and sale of the OEM Product when sold in
connection with the MDT Magellan Product in any country within the
Territory. MDT will compensate TGC its reasonable costs for any regulatory
information that is above and beyond what would be required for approval or
clearance for countries outside of those compliant under the CE Mark
certification. TGC is currently conducting a clinical study in the U.S.
that incorporates the use of the Thrombin Processing Device in Liver
Resection and a clinical study in Japan that incorporates the use of the
Thrombin Processing Device in the Surgical Application of CryoSeal. TGC
will make the clinical data from those two studies available to Medtronic,
at no cost to MDT, for use by MDT in its regulatory activities related to
the OEM Product.] Any Confidential Information provided directly to
regulatory authorities by TGC under this Section 3.2(d) will not be
disclosed to MDT unless otherwise agreed to and documented in writing by
the parties.
(e) TGC shall deliver to MDT the First Article on or before a date
that is thirty (30) days from the Effective Date.
(f) TGC shall be responsible for manufacturing the OEM Product in
accordance with Quality System Regulation, 21 CFR Part 820 (Medical
Devices), any applicable pharmaceutical/biologics regulations, and all
other applicable regulatory requirements.
(g) TGC shall not use the name Medtronic, or any Medtronic product
names or trademarks, or any adaptation thereof in any press release,
advertising, promotional, or sales literature without the prior written
consent obtained from MDT in each case.
Section 4. Certain Obligations of the Parties
4.1 Promotional Materials. MDT shall be responsible for any sales
literature and promotional materials associated with the OEM Product, including
the translation thereof as needed. MDT's use of any TGC trademarks or trade
names shall be in compliance with the requirements of Section 3.1(c), above.
Notwithstanding the foregoing, TGC consents to, and licenses MDT for the use of
TGC's "Thrombin Processing Device (TPD)" trademark for use solely in conjunction
with the OEM Product during the term of this Agreement.
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4.2 Standard of Operations. MDT agrees that it shall be solely responsible,
at its expense, for the validation, and qualification of the OEM Product as part
of MDT's technical file and regulatory approvals connected with the MDT Magellan
Product. Upon MDT's request TGC will provide to MDT or MDT's designated
representative, all documents, protocols, and testing fixture designs which it
has in its possession to assist MDT in its qualification efforts on the
manufactured products.
4.3 Cooperation of Parties. Promptly following the Effective Date, the
parties shall cooperate in good faith with each other in order to enable TGC to
deliver the First Article pursuant to Section 3.2(e).
Section 5. Supply and Purchase of the OEM Product
5.1 Supply and Pricing.
(a) All prices for the OEM Product purchased by MDT hereunder shall be
F.O.B., TGC Point of Shipment. The fixed, volume based pricing to MDT for
the OEM Product is set forth in Exhibit B. There are no minimum annual
volume requirements.
(b) Notwithstanding anything to the contrary contained herein, in the
event TGC sells or distributes, directly or indirectly, a product
substantially equivalent in cost, operation and performance to the OEM
Product during the term of this Agreement to any third party at a price
which is then less than what MDT is paying to TGC (based on like volumes),
then TGC shall adjust MDT's purchase price for the OEM Product to a level
equal to the third party's pricing level based on like volumes, such
adjustment to be retroactive to the first day TGC offered such lower
pricing (based on like volumes) to the third party.
(c) Within thirty (30) days of the Effective Date, MDT shall provide
TGC with a non-binding, rolling twelve (12) month forecast and, on a
quarterly basis thereafter, an estimated three month delivery schedule.
5.2 Certain Taxes. The parties acknowledge that the purchase prices set
forth in Exhibit B do not include any sales, excise, use, value added or other
government taxes or duties that may be applicable to the export, import or
purchase of the OEM Product, which taxes shall be the sole responsibility of MDT
and MDT agrees that it will bear all such taxes and duties. When TGC has the
legal obligation to collect and/or pay such taxes or duties, the appropriate
amount shall be added to MDT's invoice and paid by MDT to TGC, unless MDT
provides TGC with a valid tax exemption certificate authorized by the
appropriate governmental taxing authority, or provides proof of payment.
5.3 Order. All orders for OEM Product and parts shall be by means of a
signed written purchase order, which shall be submitted to TGC at TGC's address
for notice purposes set forth in Section 13.1, and shall request a delivery
date. Orders may be placed by telephone, facsimile transmission or, upon the
parties' agreement, on TGC's Web-Site or by e-mail; provided, however, that a
signed confirming purchase order is received by TGC ten (10) business days after
such order. It is understood that MDT and TGC may use their standard purchase
order and sales agreement forms during the performance of this Agreement. Any
purchase order, sales agreement or other form used by MDT or TGC shall be for
convenience only and any terms or provisions contained therein which are in
addition to or inconsistent with those contained herein shall have and be of no
force and effect; provided, however, that the terms on such documents shall be
effective to the extent they set forth quantities, scheduled delivery dates and,
as applicable, mode of shipment.
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5.4 Acceptance and Fulfillment of Purchase Order. TGC shall timely and
accurately fill and deliver all MDT orders for OEM Products; provided that such
order quantities are reasonably within the latest forecasts supplied by MDT.
5.5 Invoicing; Payment. TGC shall submit an invoice to MDT upon each
shipment of the OEM Product ordered by MDT. Except as otherwise specified in a
purchase order, payment terms will be net thirty (30) after the date of invoice.
All invoices shall be sent to MDT's accounting department, without regard to the
actual shipping address for the OEM Product. Each such invoice shall state MDT's
aggregate and unit purchase price for OEM Product in the relevant shipment, plus
any freight, taxes or other costs incident to the purchase or shipment initially
paid by TGC and to be borne by MDT hereunder. MDT shall make all payments to TGC
under this Agreement in United States dollars by check. MDT shall not take any
credits or offsets against amounts billed to MDT by TGC without TGC's prior
written consent. Any disputes shall be resolved in good faith. To that end, a
senior representative appointed by each party shall meet and confer in good
faith to amicably resolve the alleged dispute over the invoice. If they are
unable to agree to a resolution after thirty (30) business days, the parties may
elect to proceed with arbitration as provided for in Section 13.4(b). In no
event shall MDT withhold payments for undisputed invoices.
5.6 Shipping; Risk of Loss.
(a) All OEM Product delivered by TGC pursuant to this Agreement shall
be suitably packed for surface or air shipment, in MDT's sole discretion,
in TGC's standard shipping cartons, marked for shipment to such location or
locations as MDT may designate, and delivered to MDT or its carrier,
F.O.B., TGC Point of Shipment. Title and risk of loss of OEM Product shall
pass to MDT upon delivery to the carrier at the F.O.B., TGC Point of
Shipment.
(b) TGC shall ship all OEM Product in accordance with MDT's delivery
instructions specified in MDT's purchase orders; provided, however, that if
MDT does not provide delivery instructions with respect to the carrier to
be used, TGC may use its customary carrier. All freight, insurance and
other shipping expenses, as well as any special packing expenses, shall be
paid by MDT. MDT shall also bear all applicable taxes and duties that may
be assessed against the OEM Product and parts after delivery to the carrier
F.O.B., TGC Point of Shipment.
(c) TGC shall use its best efforts to ship the OEM Product on or
before the date reasonably specified in MDT's purchase order for the OEM
Product and consistent with TGC's shipping procedures. TGC will provide MDT
at least 30 days advance notice of any material changes to it shipping
procedures. All shipments of OEM Product shall be deemed to conform to the
relevant purchase order with respect to quantity ordered unless TGC
receives from MDT, no later than thirty (30) days after the receiving date
of a given shipment, written notice specifying the shipment, the purchase
order number and exact nature of the discrepancy between the shipment and
the order.
(d) TGC shall include in each shipment to MDT a certification that the
lot has been inspected and tested pursuant to the agreed upon criteria, and
that such lot meets the manufacturing specifications.
5.7 Cancellation. MDT may cancel delivery of OEM Product only upon written
notice to TGC at least sixty (60) days prior to delivery and reschedule or
redirect OEM Product at least thirty (30) days prior to delivery.
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Section 6. Additional Regulatory and Other Duties of the Parties
6.1 Regulatory Responsibilities and Approvals.
(a) MDT shall be responsible, at its expense, for obtaining and
maintaining all regulatory approvals and clearances required for marketing
and selling the MDT Magellan Product together with the OEM Product in any
countries within the Territory in which it wishes to market, distribute, or
sell the MDT Magellan Product together with the OEM Product. TGC shall
provide MDT at no charge a maximum of sixty (60) hours of technical support
per calendar year reasonably necessary to assist MDT in obtaining and
maintaining its regulatory approvals and clearance for the MDT Magellan
Product together with the OEM Product. Thereafter, all technical support to
be provided pursuant to this Section shall be at MDT's expense at TGC's
then standard rates and charges, including reasonable travel expenses, as
necessary. Medtronic may elect, at its discretion, to have an independent
party file and obtain any or all regulatory approvals and clearances
permitted under this Section 6.1 (the "MDT Representative"), in which
event, all information required to file and obtain the required regulatory
approvals and clearances shall be provided directly to the MDT
Representative and not disclosed to MDT.
(b) Any information provided to MDT by TGC under Section 6.1(a) that
TGC regards as confidential shall be identified as confidential as required
by Section 1.2, above, and shall be treated as Confidential Information
under the terms of this Agreement. Any Confidential Information provided to
a MDT Representative under Section 6.1(a) will not be disclosed to MDT
unless otherwise agreed to and documented in writing by the parties.
(c) Each party will notify the other as soon as possible, but in no
event in more than three (3) business days, of any complaint or adverse
event report that they become aware of relating to the Thrombin Processing
Device as incorporated into the OEM Product. TGC shall be solely
responsible for establishment and maintenance of all required monitoring,
vigilance, complaint handling, and reporting systems for the OEM Product
marketed or sold by MDT with its MDT Magellan Product, including medical
device reporting, vigilance reports, field recalls, and corrective actions
("OEM Reports"). TGC shall take all necessary actions required for any OEM
Report and shall provide to MDT information on the status of any OEM
Reports (i) upon MDT's request and (ii) in a quarterly summary of all
complaint and corrective actions relevant to the use of the OEM Product
with the Magellan Device.
(d) The parties each agree that they shall keep the other party
informed of all efforts and issues relating to regulatory approvals and
clearances and all product complaints and device reporting activity as set
forth in this Section 6.1, and shall share with the other such information
relating thereto as is reasonably requested.
6.2 Subsequent Design Change and Modifications. TGC agrees that it will not
materially change the OEM Product specifications or its formulation,
manufacturing or testing processes, process equipment, other aspects of form,
fit, design or function, or production location, unless the parties agree to
such change in writing. If MDT wishes to have TGC make any changes to the
specifications of the OEM Product, it will notify TGC of such request and TGC
will make such changes only upon written agreement between the parties on
mutually acceptable terms. The implementation of any such changes under this
Section 6.2 shall be subject to the parties' written agreement on any change in
price or other terms of supply as may be necessitated or requested by TGC as a
result of such change, including without limitation, disposition of existing
inventory parts.
6.3 Compliance With Law. MDT and TGC shall comply in all material respects
with all applicable laws and regulations in the Territory, and each party shall
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obtain and maintain any and all material permits, certificates or licenses
necessary for the proper conduct of its duties and obligations under this
Agreement.
6.4 Recall. In the event of any Recall of the OEM Product anywhere in the
Territory, each party will cooperate fully with the other party in effecting
such a recall, including, without limitation, promptly returning any affected
inventory of the OEM Product in its possession and promptly communicating to any
customers such information or instructions as either party may reasonably
request be transmitted to such customers. In the event of a Recall of the OEM
Product, TGC shall, at its sole option, cost and expense (a) promptly replace
any recalled OEM Product with new compliant OEM Product; or (b) promptly issue
credit to MDT for any recalled OEM Product unless such Recall was caused by a
modification of the OEM Product by MDT. TGC shall pay, or reimburse MDT, for all
reasonable out-of-pocket expenses incurred in effecting such Recall of OEM
Products, including without limitation, any shipping costs related to return
and/or replacement of recalled OEM Products unless the Recall was caused by a
modification of the OEM Product by MDT. For the purpose of this Section 6.4,
"Recall" means any required removal of OEM Product from the inventory of MDT or
MDT's customers as required by any law, regulation, or order of a governmental
authority, or at the reasonable discretion of either party after determination
that OEM Product contains a manufacturing, design or other defect rendering it
unsuitable for clinical use.
6.5 Records. Each party shall maintain for at least five (5) years or the
applicable regulatory requirement, which ever is longer, their respective
records to ensure compliance with any regulatory requirements, including but not
limited to traceability of all shipments of the OEM Product. These records shall
include the part number (if any), manufacturing dates, shipping dates and
lot/batch number. Each party shall be allowed access to the other party's
records at all reasonable times during normal business hours, or at such other
times that are mutually agreeable to the parties, following the requesting
party's request. At the request and direction of any governing regulatory
authority, each party shall allow such authority access to its records.
6.6 Notice of Proceedings. Each party shall notify the other party in
writing within five (5) business days of the commencement or threat of any
action, suit, proceeding or investigation or the issuance of any order, writ,
injunction, award, judgment or decree before or of any court, tribunal,
arbitration panel, agency or governmental instrumentality that may materially
and adversely affect the other party's rights or obligations under this
Agreement.
6.7 Litigation. If either party becomes involved in any litigation
regarding the OEM Product within the Territory (each, a "Litigating Party"), the
other party agrees to provide all relevant documents or information (except for
privileged communications or information or Confidential Information which shall
be governed by Section 10) to the Litigating Party and to provide such
cooperation with the Litigating Party in the conduct of such litigation, all as
may be reasonably requested by the Litigating Party. Each party shall notify the
other party in writing within ten (10) business days of the commencement of any
action, suit, proceeding or investigation or the issuance of any order, writ,
injunction, award, judgment or decree before or of any court, tribunal,
arbitration panel, agency or governmental instrumentality that relate to the OEM
Product.
Section 7. Term and Termination
7.1 Initial Term. The initial term of this Agreement shall commence on the
Effective Date of this Agreement and shall continue in full force and effect for
Five (5) years, unless terminated earlier in accordance with this Agreement.
7.2 Termination. The Term may be terminated prior to expiration as set
forth below.
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(a) If either party hereto is in breach of any material terms and
conditions of this Agreement and such party fails to cure the breach within
thirty (30) days after the date of receipt of written notice from the other
party advising of the nature of such breach, then the party not in default
shall have the right to terminate this Agreement by written notice to the
party in breach.
(b) If either party: (i) becomes insolvent; (ii) makes a general
assignment for the benefit of its creditors; (iii) files or has filed
against it a petition in bankruptcy or seeks re-organization which is not
dismissed within 60 days; (iv) has a receiver appointed over any of its
assets; or (v) institutes any proceedings for liquidation or winding up;
then the other party may, in addition to other rights and remedies it may
have, terminate this Agreement immediately by written notice. If TGC is the
party to which any of the foregoing apply, TGC shall use its best efforts
to ensure that the rights of MDT hereunder continue unaltered and
uninterrupted.
(c) Either party may terminate this Agreement if the other party has
failed to perform its obligations due to an event of Force Majeure (as
defined at Section 13.12) for a period of thirty (30) days or more;
provided, however, either party may terminate this Agreement immediately if
such Force Majeure is attributable to any new or changing regulations or
laws of any government or interpretation thereof by any judicial or
regulatory authority that materially impair such party's ability to perform
or meet its obligations under this Agreement.
(d) MDT may terminate this Agreement by giving thirty (30) days
written notice of termination to TGC in the event that TGC fails to timely
fill MDT's purchase orders for the OEM Product.
(e) MDT may terminate this Agreement without cause, upon 30 days of
written notice. If this Agreement is terminated by MDT without cause under
this section, MDT shall be reimburse TGC for (i) all work in progress and
associated labor for the OEM Product, and (ii) all other
non-cancelable/non-returnable raw materials and components reasonably
purchased by TGC for the sole purpose of manufacturing the OEM Product. The
provisions in this paragraph will be TGC's sole and exclusive remedy for
any termination of this Agreement by MDT under this section 7.2(e). TGC
will take all reasonable measures to return unused material and cancel open
supplier purchase orders in event of termination.
(f) TGC may terminate this Agreement by giving thirty (30) days
written notice of termination to MDT in the event that MDT fails to timely
pay TGC's invoices for OEM Product that has been accepted by MDT unless MDT
cures the payment default within thirty (30) days of receipt of the written
notice from TGC. For purposes of this Section, accepted OEM Product does
not include disputed invoice amounts, as provided for in Section 5.5 above.
7.3 Liability After Termination. Expiration or termination of this
Agreement for any reason shall not, unless otherwise expressly provided in this
Agreement, affect:
(a) Obligations accrued prior to the effective date of expiration or
termination (the "Termination Date");
(b) Any obligations which, either expressly or from the context of
this Agreement, are intended to survive termination of this Agreement; or
(c) The obligations and duty of MDT to pay in full all undisputed
amounts due to TGC for OEM Product which has been accepted by MDT. For
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purposes of this Section, "amounts due" does not include disputed invoice
amounts, which are subject to resolution as provided for in Section 5.5
above.
7.4 Effects of Termination. Upon expiration or termination of this
Agreement:
(a) All rights granted under this Agreement shall terminate as of the
Termination Date and MDT shall cease to utilize any rights granted under
this Agreement; provided, however, that MDT shall be entitled to (i) cancel
any outstanding purchase orders to TGC for the OEM Product; (ii) continue
to use, promote, distribute and sell any of the OEM Product to the extent
necessary to fill any customer orders that are outstanding as of the
Termination Date; (iii) continue to use, promote, distribute and sell the
OEM Product on a nonexclusive basis until its inventory of the OEM Product
is exhausted; and/or (iv) at the election of TGC, allow TGC to repurchase
any such existing inventory of OEM Product from MDT at the original price
paid by MDT therefore.
(b) Within ten (10) days after the Termination Date, each party shall
return, or, at the election of the other party, destroy the Confidential
Information of the other party pursuant to Section 10.2 and provide
certification of such destruction.
7.5 Continuation of Business. If TGC intends to cease production of the
Thrombin Processing Device for any reason, it will give MDT notice in writing at
least ninety (90) days before cessation of production and will give MDT the
opportunity for a last time buy of the OEM Product in quantities consistent with
previous annual purchases by MDT.
Section 8. Returns
8.1 Return Materials Procedure. All OEM Product returns must be assigned a
Return Authorization ("RA") number. To obtain an RA number, MDT shall notify TGC
of the description of the OEM Product, quantity, reason for return and date of
purchase of OEM Product to be returned. All OEM Product returns from MDT shall
be sent directly to TGC. The RA number shall be prominently displayed on the
outside of the shipping box and the OEM Product shall be packaged to protect
them from shipping damage. TGC shall bear shipping costs associated with all
defective OEM Product returns.
Section 9. Intellectual Property
9.1 Ownership of Existing Property
(a) The parties each hereby acknowledge that each party retains the
sole ownership of, and all rights to, any and all of its Intellectual
Property and except as specifically provided for in this Agreement neither
party grants any right, title or interest the other party's Intellectual
Property.
(b) The parties herein waive any right to claim that, pursuant to the
operation of this Agreement, the other party has diluted, damaged or
otherwise decreased the value of the other party's trademarks or service
marks.
Section 10. Confidential Information
10.1 Confidential Information.
(a) In performing the obligations under this Agreement, MDT and
TGC may come into contact with, be given access to, and, in some
instances, contribute to each other's Confidential Information. In
consideration of permitting MDT and TGC to have access to each other's
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Confidential Information, during the term of this Agreement and at all
times thereafter, MDT and TGC agree that, subject to the requirements
of Section 1.2, above, during the term of this Agreement and for two
(2) years after its termination or expiration, they shall not disclose
to any third party any Confidential Information of the other party
without the other party's prior written consent, except as may be
required to meet regulatory obligations related to the parties
products. MDT and TGC shall only make the Confidential Information of
the other party available to its employees on a need-to-know basis and
agree to take appropriate action by instruction or agreement with
their respective employees for a permitted access to the Confidential
Information to satisfy the obligations under this Article 10.1.
(b) In the event the receiving party or its representatives are
requested or become legally compelled (by oral questions,
interrogatories, requests for information or document subpoena, civil
investigative demand or similar process) to disclose any Confidential
Information furnished by the disclosing party, the receiving party
agrees that it will provide the disclosing party with prompt written
notice of such request(s) so that the disclosing party may seek a
protective order or other appropriate remedy and/or waive compliance
with the provisions of this Agreement.
(c) The receiving party will promptly notify the disclosing party
of any unauthorized disclosure or use, and will cooperate with the
disclosing party to protect all of its intellectual property rights in
and ownership of its Confidential Information.
10.2 Confidential Treatment for Business Terms. In addition, incident to
TGC's filing of this Agreement with the Securities and Exchange Commission, the
parties agree that certain confidential and competitive information with respect
to pricing will not be publicly disclosed, and TGC agrees that it will request
under the United States securities laws, including Rule 24b-2 promulgated under
the Securities Exchange Act of 1934, as amended, and use its reasonable best
efforts to seek, confidential treatment of certain information contained in this
Agreement.
10.3 Previous Confidentiality Agreements. The Parties acknowledge that
these confidentiality provisions supersede any previous agreements of
confidentiality between the Parties, which previous agreements are hereby null
and void.
10.4 Retention of Confidential Information. Upon termination of this
Agreement, a receiving party may retain, in the possession of its legal counsel
for evidentiary purposes, one copy of any Confidential Information it has
received.
Section 11. Representations and Warranties
11.1 TGC Representations and Warranties. TGC represents and warrants that:
(a) TGC is the sole, exclusive and lawful owner of all right, title
and interest in and to the THROMBIN Technologies and the Thrombin
Processing Device;
(b) The THROMBIN Technologies and the Thrombin Processing Device are
not the subject of any encumbrance or lien by any third party;
(c) TGC owns and shall maintain ownership of the Intellectual Property
Rights in and to the THROMBIN Technologies and the Thrombin Processing
Device during the term of this Agreement, and the THROMBIN Technologies and
the Thrombin Processing Device do not infringe the Intellectual Property
Rights of any third party as of the Effective Date;
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(d) TGC has not granted, and during the term of this Agreement shall
not grant, rights to any Person that conflict with the grants and other
rights reserved to MDT under this Agreement;
(e) As of the Effective Date, TGC has entered into no other agreements
granting rights to manufacture, promote, advertise, distribute or sell the
OEM Product;
(f) TGC has the power to enter into this Agreement and perform in
accordance with the provisions hereof and that the execution and
performance of the Agreement has been duly and validly authorized in
accordance with all applicable laws and governing instruments.
(g) Each OEM Product shall be manufactured in accordance with QSR and
TGC shall otherwise maintain a quality level of each OEM Product necessary
to obtain and retain approval by the FDA and any other governing regulatory
authorities.
(h) TGC warrants that for a period commencing with the date of
shipment of any OEM Product to MDT and continuing until the earlier of (i)
18 months from the date of shipment to MDT or (ii) 1 year after sale by MDT
to its customer (the "Warranty Period"), the OEM Product shall satisfy the
specifications mutually agreed by the parties, be free of defects, and be
manufactured pursuant to all applicable standards prescribed by all
governing regulatory authorities; provided however, that damage to any OEM
Product by MDT or its customers through misuse, neglect, accident, or
failure to follow the printed procedures and recommendations of instruction
for use or storage of the OEM Product shall void this warranty. In the
event MDT reasonably determines that this warranty has been breached, MDT
shall return the defective OEM Product to TGC pursuant to Section 8.1. TGC
shall, within thirty (30) days after it receives the defective OEM Product,
repair or replace such defective OEM Product, pay shipping cost for such
replacement at no charge to MDT and bear all risk of loss or damage to such
replacement. MDT acknowledges and agrees that TGC's obligation to replace
defective OEM Product is the sole and exclusive remedy of MDT for any
breach of the warranty contained in this Section 11.1(h). Under no
circumstances shall TGC be liable for consequential or economic damages
that might arise from a defective OEM Product, except for the
indemnification obligations in Section 12. The warranty provided under this
Section 11.2(h) shall pass through to MDT's customers.
(i) The execution, delivery and performance by TGC of this Agreement
and the consummation of the transactions contemplated hereby do not violate
or conflict with the Certificate of Incorporation or Bylaws of TGC, any
material contract, agreement or instrument to which TGC is a party or by
which it or its properties are bound, or any judgment, decree, order or
award of any court, governmental body or arbitrator by which TGC is bound,
or any law, rule or regulation applicable to TGC.
(j) Patent, Copyright and Proprietary Rights Indemnity. TGC shall, at
its expense, defend and indemnify MDT and its officers, directors, agents
and employees harmless for damages and reasonable expenses (including
attorneys' fees) related to any suits or claims by a third party brought
against MDT alleging that the OEM Product sold pursuant to this Agreement
infringe the Intellectual Property rights of others, provided that TGC is
promptly notified, rendered reasonable assistance by MDT as required, and
permitted to direct the defense or settlement negotiations. The foregoing
obligation of TGC does not apply with respect to the OEM Product or
portions or components thereof which is or was: (i) made in whole or in
part in accordance with MDT's specifications or instructions and such MDT
specifications are the source of the alleged infringement, (ii) combined
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with other products, processes or materials where the alleged infringement
relates to such combination, provided that the alleged infringement claim
could not be made but for such combination, (iii) where MDT continues
allegedly infringing activity after TGC has determined in good faith that
there is no defensible position and being notified in writing by TGC
thereof or after receiving a modification delivered at TGC's expense that
would have avoided the alleged infringement, or (iv) where MDT's use of the
OEM Product is not in accordance with this Agreement.
11.2 MDT Representations and Warranties. MDT represents and warrants that:
(a) MDT has the power to enter into this Agreement and perform in
accordance with the provisions hereof and that the execution and
performance of the Agreement has been duly and validly authorized in
accordance with all applicable laws and governing instruments;
(b) The execution, delivery and performance by MDT of this Agreement
and the consummation of the transactions contemplated hereby do not violate
or conflict with the Certificate of Incorporation or Bylaws of MDT, any
material contract, agreement or instrument to which MDT is a party or by
which it or its properties are bound, or any judgment, decree, order or
award of any court, governmental body or arbitrator by which MDT is bound,
or any law, rule or regulation applicable to MDT; and
11.3 No Assurance. Neither TGC nor MDT make any representation or warranty
that the OEM Product will be suitable for use in humans or can or shall be
developed satisfactorily for FDA approval or continued sale thereafter. MDT and
TGC recognize and assume the significant risks associated with designing,
developing and manufacturing OEM Products in accordance with this Agreement. MDT
and TGC individually assume the risks that (a) OEM Products will not be
developed that meet customer requirements or the party's goals for this
Agreement, and (b) the market will fail to accept such OEM Products. TGC and MDT
acknowledge that MDT and its Affiliates are and shall continue to be engaged in
developing and exploiting technologies, processes and products which are similar
to or competitive with the OEM Products; provided, however, that MDT agrees that
it shall not use any Confidential Information of TGC in developing or exploiting
such technologies, processes, and products.
Section 12 Indemnification, Insurance and Limitation on Liability
12. 1 Indemnification by MDT. MDT shall defend, indemnify, and hold TGC and
its officers, directors, shareholders, employees, agents, independent
contractors, representatives, and affiliates harmless from and against any loss,
damage, liability, or expense, including attorneys' fees, costs and
disbursements arising in connection with:
(a) any breach by MDT of the representations and warranties set forth
at Section 11.2;
(b) any claims or demands for injury to property or persons, including
payments made under any workers' compensation or under any other plan for
employees' disability or death benefits, made by any third party in
connection with the advertising, promotion, distribution, or sale of the
OEM Product distributed as contemplated under this Agreement by MDT or by
its employees, agents, representatives or affiliates unless such claims or
demands are subject to indemnification by TGC pursuant to Section 12.2; and
(c) any suits or claims by a third party brought against TGC alleging
that the OEM Product sold as contemplated under this Agreement caused death
or bodily injury to a patient, whether based upon a theory of product
liability, warranty, defective product, or otherwise; except to the extent
the injury was caused by the failure of TGC to manufacture the OEM Product
to Specification.
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12.2 Indemnification by TGC. TGC shall defend, indemnify, and hold MDT
and its officers, directors, shareholders, employees, agents, independent
contractors, representatives, and affiliates harmless from and against any loss,
damage, liability, or expense, including attorneys' fees, costs and
disbursements arising in connection with:
(a) any breach of the representations and warranties set forth in
Section 11.1;
(b) any claims or demands for injury to property or persons, including
payments made under any workers' compensation or under any other plan for
employees' disability or death benefits, made by any third party in
connection with TGC's manufacture of any OEM Product, unless such claims or
demands are subject to indemnification by MDT pursuant to Section 12.1; and
(c) any suits or claims by a third party brought against MDT alleging
that any of the THROMBIN Technologies included in the OEM Product as
contemplated under this Agreement, caused death or bodily injury to a
patient, whether based upon a theory of product liability, warranty,
defective product, or otherwise; provided however, that TGC shall have no
obligation under this Section 12.2(c) to the extent the death, bodily
injury or claim was not caused by the THROMBIN Technologies.
12.3 Limitation of Liability. EXCEPT WITH RESPECT TO A BREACH OF
CONFIDENTIALITY OBLIGATIONS, CLAIM OF INFRINGMENT OF A THIRD PARTY'S
INTELLECTUAL PROPERTY RIGHTS, OR WITH RESPECT TO PRODUCT LIABILITY CLAIMS
CONTAINED HEREIN, UNDER NO CIRCUMSTANCES, SHALL EITHER PARTY OR ANY OF ITS
OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS, INDEPENDENT CONTRACTORS,
REPRESENTATIVES, OR AFFILIATES, HAVE ANY LIABILITY OR OBLIGATION TO THE OTHER
PARTY OR TO ANY OF ITS OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AGENTS,
INDEPENDENT CONTRACTORS, REPRESENTATIVES, CHANNELS OF DISTRIBUTION OR AFFILIATES
FOR ANY CONSEQUENTIAL OR INCIDENTAL DAMAGES, LOST PROFITS, ANTICIPATED INCOME OR
PROFITS, OR OTHER SIMILAR DAMAGES. EXCEPT WITH RESPECT TO A BREACH OF
CONFIDENTIALITY OBLIGATIONS OR WITH RESPECT TO THE INDEMNIFICATION OBLIGATIONS
CONTAINED HEREIN, UNDER NO CIRCUMSTANCES SHALL THE LIABILITY OF EITHER PARTY
EXCEED THE TOTAL AMOUNT OF PAYMENTS BY MDT TO TGC DURING THE LAST 12 CALENDAR
MONTHS PRECEDING THE EVENT GIVING RISE TO THE CLAIM. NOTHING IN THIS SECTION
SHALL PREVENT EITHER PARTY FROM OBTAINING EQUITABLE RELIEF, INCLUDING BUT NOT
LIMITED TO TEMPORARY RESTRAINING ORDERS, PRELIMINARY INJUNCTIONS AND PERMANENT
INJUNCTIONS.
12.4 Insurance. Each party shall purchase and maintain, during the term of
this Agreement, policies of insurance which, at a minimum, include both
comprehensive general liability and product liability. Each such policy shall
have endorsements or coverage with limits of not less than $1,000,000 per
occurrence and $1,000,000 in the aggregate for general liability coverage, and
$2,000,000 per occurrence and $2,000,000 in the aggregate for product liability
coverage. In the event a party's insurance is on a "claims made" basis, such
party shall purchase and maintain the extension of coverage or "tail" for a
period of one year following the Termination Date or last date of sale of the
OEM Product under this Agreement, whichever is the latest date. The insurance
required by this section may be in the form of self-insurance.
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Section 13General
13.1 Notices. Any notice, request, demand, or other communication required
or permitted under this Agreement, shall be deemed to be properly given by the
sender and received by the addressee (a) if personally delivered; (b) three (3)
days after deposit in the mails if mailed by certified or registered air mail,
postage prepaid; (c) one (1) day after being sent by facsimile with confirmation
sent as provided in (b) above; or (d) one (1) day after being sent by commercial
overnight mail, addressed as follows, and in the case of facsimile transmission,
to the appropriate facsimile number shown below:
If to TGC: ThermoGenesis Corp.
2711 Citrus Road
Rancho Cordova, California 95742
Attention: President
Facsimile No.: (916) 858-5199
With a copy to: Bartel Eng & Schroder
1331 Garden Highway, Suite 300
Sacramento, California 95833
Facsimile No.: (916) 442-3442
Attention: David Adams, Esq.
If to MDT: Medtronic, Inc.
7611 Northland Drive N.
Minneapolis, MN 55428
Facsimile: (763) 391-9101
Attention: Cliff Owens
With a copy to: VP and Senior Counsel
Medtronic Cardiac Surgery
13.2 Assignments, Successors And Assigns. Neither party may assign any or
all of its rights or delegate any or all of its duties under this Agreement
without the prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed; provided however, that either party may,
without the other party's consent, assign this Agreement to a successor by
merger or acquisition or by purchase of all or substantially all of the assets
of the party related to the business which is the subject of this Agreement, if
such successor agrees in writing to be bound by the terms and conditions
contained herein. All representations, warranties, covenants and agreements of
the parties shall bind their respective successors and assignees and shall inure
to the benefit of their respective successors and permitted assignees.
13.3 Survival. Sections 6.5, 7, 9, 10, 11, 12 and 13 shall survive the
termination of this Agreement.
13.4 Entire Agreement, Amendment and Modification. This Agreement expresses
the entire understanding of the parties hereto and replaces any prior oral or
written agreements concerning the subject matter hereof, and each party
acknowledges that it has not executed this Agreement in reliance upon any
promise, agreement, representation or warranty not expressly set forth in this
Agreement. No amendment or supplementation hereof shall be effective or binding
on either party hereto unless reduced to writing and executed by the duly
authorized representatives of both parties hereto. Notwithstanding the terms of
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either this Agreement or the Agreement for Mutual Exchange of Confidential
Information between MDT and TGC, dated September 16, 2004 (the "September
Confidentiality Agreement"), the September Confidentiality Agreement shall
continue in force and effect, in accordance with its terms, but only with
respect to the information disclosed by the parties pursuant to that agreement.
Exhibit C lists the information marked as confidential and disclosed to MDT by
TGC under the September Confidentiality Agreement.
13.5 Taxes.
a) MDT shall be responsible for all taxes on income or gross receipts
of MDT levied by governmental authorities within the Territory and for
collection, remittance and payment of any and all taxes, charges,
withholding obligations, levies, assessments or other fees of any kind
imposed by any governmental authority within the Territory with respect to
MDT's operations.
b) TGC shall be responsible for all taxes on income or gross receipts
of TGC levied by governmental authorities within the Territory and for
collection, remittance and payment of any and all taxes, charges,
withholding obligations, levies, assessments or other fees of any kind
imposed by any governmental authority within the Territory with respect to
TGC's operations.
c) In the event that MDT or TGC shall become subject to any tax or
other levy imposed by any governmental authority of the United States or
any other jurisdiction within the Territory by virtue of this Agreement or
in connection with the exercise of rights granted hereunder or the
performance of obligations imposed hereunder by either party and such tax
or other levy is not otherwise dealt with under this Agreement, MDT and TGC
agree to meet in good faith to determine the allocation of responsibility
for such tax or other levy.
13.6 Governing Law.
a) This Agreement shall be construed and governed in accordance with
the internal laws of the State of California without regard to conflict of
law principles. The parties agree that the United Nations Convention on
Contracts for the International Sale of Goods shall not apply to this
Agreement. In the event any legal action becomes necessary to enforce or
interpret the terms of this Agreement, the parties agree that such action
will be brought in the state or federal courts located in San Francisco,
California and the parties hereby submit to the exclusive jurisdiction of
said courts.
b) Notwithstanding Section 13.6(a), in order to expedite the
resolution of legal disputes, the parties shall have any disputes arising
in connection with this Agreement finally settled under the Rules of
Conciliation and Arbitration of the International Chamber of Commerce by
one or more arbitrators appointed in accordance with such rules, whose
decision shall be binding upon the parties; provided, however, that in no
event shall any dispute regarding ownership of either party's Intellectual
Property Rights be subject to arbitration unless mutually agreed upon by
both parties. Any arbitration shall be conducted in the English language
with the place of arbitration to be in San Francisco, California or such
other location as may be mutually agreed upon by the parties. The
arbitrator(s) shall be entitled to award costs and will be bound by
limitations on liability or remedies set forth in this Agreement.
c) The parties consent to any order or award or decision made in
accordance with Sections 13.6(b), being made an order of court anywhere in
the Territory. Furthermore, in the event either party believes that any
matter is so urgent that application to a court for urgent relief is
essential, such party may approach any court with jurisdiction in the
Territory for urgent relief and for any subsequent related relief.
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13.7 Relationship Of The Parties. Both parties are independent contractors
of the other under this Agreement. Neither party shall have the authority,
either express or implied, to make any commitment or representation on behalf of
the other party or incur any debt or obligation on behalf of the other party;
provided, however, that MDT shall, if necessary, be deemed an agent for the
limited purpose of prosecuting a Third Party Infringement. The parties
acknowledge that this Agreement does not constitute a franchise under United
States federal or state law or under any law of the Territory or any sovereignty
within the Territory and does not create a fiduciary relationship between the
parties.
13.8 Severability. If any provision of this Agreement is found by any court
of competent jurisdiction to be invalid or unenforceable, such provision shall
be deemed to be modified to the minimum extent necessary to cause it to be valid
and enforceable and the invalidity or unenforceability of such provision prior
to such modification shall not affect the other provisions of this Agreement and
all provisions not affected by the invalidity or unenforceability shall remain
in full force and effect.
13.9 Remedies Not Exclusive. No remedy conferred by any of the specific
provisions of this Agreement is intended to be exclusive of any other remedy,
except as expressly provided in this Agreement or any Exhibit thereto, and each
and every remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing in law or in equity or by
statute or otherwise. The election of any one or more remedies shall not
constitute a waiver of the right to pursue other available remedies.
13.10 Waiver. Failure of either party at any time to require the
performance of any provision under this Agreement shall not affect the right of
such party to require full performance thereafter and a waiver by either party
of a breach of any provision of this Agreement shall not be taken or held to be
a waiver of any further or similar breach or as nullifying the effectiveness of
such provision.
13.11 Attorneys' Fees. In any action on or concerning this Agreement, the
prevailing party will be awarded its reasonable attorneys' fees, costs and
necessary disbursements, to be paid by the non-prevailing party.
13.12 Force Majeure. If performance hereunder is interfered with by any
condition beyond a party's reasonable control and without its fault or
negligence (a "Force Majeure"), the affected party shall be excused from such
performance to the extent of such Force Majeure and shall have no responsibility
or liability for such failure to perform. The party whose performance is
prevented by a Force Majeure event shall immediately inform the other party of
the Force Majeure event and all reasonable information relating thereto.
13.13 Counterparts. This Agreement may be signed in counterparts and all
signed copies of this Agreement will together constitute one original of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written
Medtronic, INC.
By:------------------------------------
Name:
Date:----------- Title:
ThermoGenesis Corp.
By:--------------------------------------
Name: Kevin Simpson
Date:----------- Title: President and Chief Operating Officer