SUPPLY AGREEMENT
EXHIBIT
10
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CERTAIN
INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND WILL BE FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST UNDER 17 C.F.R. SECTIONS 24b-2, 200.80(B)(4) AND
230.406.
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This
Agreement (the “Agreement) effective as of this 30th
day of
June 2005 (the “Effective Date”) is by and between Xxxxxx Xxxx Corporation, a
Delaware corporation, ("Seller") whose principal place of business is 00 Xxxx
Xxxxxxx Xxxxxx, Xxxxx, XX 00000 and St.
Jude
Medical, Daig Division, Inc.
a
Minnesota corporation, ("Buyer"), whose principal place of business is 00000
XxXxxx Xxxxx, Xxxxxxxxxx, XX 00000.
WHEREAS,
Buyer desires to purchase Products (as described below) from Seller and Seller
desires to sell Products to Buyer under the terms and conditions set forth
herein.
NOW,
THEREFORE, the parties wishing to be legally bound, agree as follows:
1. PRODUCTS:
All
collagen plugs used, now or in the future, in all Angio-Seal vascular closure
devices and/or any equivalent devices (the “Collagen Plug”). Such collagen plugs
are currently designated as Seller’s Part Numbers: 8F collagen plug, #20011-01;
0X, 0-xxxx xxxxxxxx plug, #20011-02; 6F collagen plug, #20011-03; 6F STS
collagen plug, #20014-02; 8F STS collagen plug, #20014-01; 6F V-Fold collagen
plug, #20026-06; 8F V-Fold collagen plug, #20026-08 and future part numbers
to
be assigned to the fast wet collagen plug, meeting the specifications (the
“Specifications”) set forth in Schedule A, which is attached to and made a part
of this Agreement (collectively, the “Collagen Plug”). Such Specifications may
be changed from time to time only as agreed to in writing by the parties.
Absorbable
Polymer Anchor (the “Anchor”) for
the
St. Jude Medical, Daig Division 8F and 6F Angio-Seal vascular closure devices
(Seller’s Part Numbers: Asymmetrical Anchor, #10130-01; 8F Anchor, #10001-03; 6F
Anchor, #10003-01) meeting the specifications (the “Specifications”) set forth
in Schedule A, which is attached to and made a part of this
Agreement.
2. DURATION:
The
duration of this Agreement shall be from the Effective Date and for the
following five and half (5.5) years, unless terminated pursuant to the terms
of
this Agreement or otherwise agreed in writing by the parties.
3. ORIGINATION
FEE:
In
consideration of Seller’s obligation for development and investment to provide
the Collagen Plug at the required annual volumes, Buyer will pay a $1 million
fee at the signing of this agreement (the “Origination Fee”). Such Origination
Fee shall be in addition to the prices to be paid as set forth in Section 7
hereof.
4. QUANTITIES:
Subject
only to other provisions of this Agreement, Seller shall sell to Buyer and
Buyer
shall exclusively purchase from Seller 100% of Buyer's requirements for Collagen
Plugs, or substantially equivalent products, and at least 30% of Buyer’s
requirements for Anchors. Buyer will supply a non-binding forecast (the “Annual
Forecast”) to Seller not less than ninety (90) days prior to the end of the
anniversary year for Products to be purchased during the subsequent year, except
for the first year of this Agreement for which the applicable Annual Forecast
shall be provided contemporaneously with the execution of this Agreement or
as
otherwise agreed in writing by the parties.
5. ORDER
AND DELIVERY:
Buyer
shall issue a purchase order for all purchases of Products under this Agreement.
Each purchase order shall state the desired shipment date(s) and the quantity
being ordered. Seller shall acknowledge promptly in writing to Buyer each
purchase order issued by Buyer and confirm delivery dates to destinations
specified by Buyer; however, delivery dates must not conflict with Seller's
normal manufacturing lead times. Each delivery of Products shall be accompanied
by Seller's Certificate of Conformance as described more fully in the
Specifications for the Products. If any terms and conditions contained in such
purchase order or acknowledgment conflict with the terms of this Agreement,
the
terms and conditions of this Agreement shall apply to the transaction. Changes
in delivery date(s) or quantity specified in a purchase order may be made by
Buyer by means of a written amended purchase order.
6. ADDITIONAL
QUANTITIES:
During
the term of this Agreement, Seller agrees to supply in any given year up to
150%
of Buyer’s expected annual requirement (set forth in its Annual Forecast) of the
Products. In the event that Buyer requires in any year quantities of Products
which exceed 150% of the quantity of Products set forth in the Annual Forecast
(“Quantity In Excess of Forecast”), Buyer shall so notify Seller in writing at
least ninety (90) days in advance of Buyer's desired shipping date for such
Quantity In Excess of Forecast. Seller shall use its reasonable efforts
(consistent with good business practice) to meet Buyer's requirements for such
Quantity In Excess of Forecast, and shall inform Buyer within thirty (30) days
of Seller’s receipt of notice whether or not Seller will supply all or a portion
of such requirements.
7. PRICE:
The
price
for Products (the “Price”) shall be calculated based on the table set forth in
Schedule B attached to this Agreement and as described below (“the Formula”).
Buyer will be invoiced for Products at the prices identified on Schedule B
(as
amended from time to time by agreement of the parties) which corresponds to
the
part number of the Products shipped and to the quantity (the “Invoiced Price”)
identified in the applicable Annual Forecast Buyer submitted to Seller for
year
in which such Products is supplied. The Invoiced Price will be subject to
adjustment as explained more fully below to the price identified on Schedule
B
for each part number which corresponds to the actual aggregate quantities of
all
Products purchased by Buyer on an annual basis (the “Adjusted Price”). This
means that the quantities for all Products are accumulated, by product, to
determine which tier of the pricing table applies for all Products. The actual
quantities purchased shall be determined using twelve month intervals measured
fromthe date of the Agreement. Adjustments, both in terms of refunds and/or
additional charges, resulting from the difference between the Invoiced Price
and
the Adjusted Price, will be made within sixty (60) days after the close of
each
anniversary of the Agreement should Buyer's actual purchased quantities differ
from the quantities set forth in the Annual Forecast. Prices shall be calculated
and paid for all Products shipped during the term of this Agreement, unless
such
Prices are revised by Seller as follows: If the Buyer requires changes in
Products or packaging specifications, revisions to lot release criteria, etc.,
which result in a cost increase to the Seller, the reasonable cost of such
change will be factored in, to develop new pricing for the Products units
affected by such change. If Buyer presents any claim under Section 15 herein,
Price for Products ordered during the year for which the claim is asserted
shall
be calculated by dividing the total aggregate quantity of deliveries in the
time
since the most recent anniversary of the Agreement, or the Effective Date if
less than twelve (12) months have elapsed, by the number of whole months that
have elapsed during that same time until the sellers receipt of notice of said
claim which yields a quotient, that quotient then being multiplied by twelve
(12).
8. WARRANTY:
Subject
to the conditions set forth below, Seller warrants that Products shipped
hereunder meets and complies with the Specifications set forth in Schedule
A.
Other than the foregoing, SELLER
MAKES NO WARRANTIES OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE
EVEN IF THAT PURPOSE IS KNOWN TO SELLER, NOR ANY OTHER EXPRESS OR IMPLIED
WARRANTY.
Buyer
assumes all risk and liability for results obtained by the use of Products
covered by this Agreement, whether used singly or in combination with other
products.
9. INDEMNIFICATION:
Subject
to the conditions set forth below, Seller shall fully indemnify Buyer against
all loss and expense (including, without limitation, reasonable attorney’s fees)
for injury to or death of any person or loss of or damage to property incurred
by the Buyer and resulting in any way from Buyer’s use or sale of Products, as
the case may be, or any act or omission whether negligent or otherwise, on
the
part of the Seller, its agents, employees, subcontractors, or assignees, in
connection with the performance of this Agreement, except when such loss and
expense are caused solely by the willful misconduct or gross negligence of
Buyer
in which case Buyer will indemnify Seller.
Subject
to the conditions set forth below, Buyer shall fully indemnify Seller against
all loss and expense (including, without limitation, reasonable attorney's
fees)
for injury to or death of any person or loss of or damage to property incurred
by Seller and resulting in any way from Buyer's use or sale of vascular closure
devices which incorporate the Products, as the case may be, or any act or
omission, whether negligent or otherwise, on the part of the Buyer, its agents,
employees, subcontractors or assignees, in connection with the performance
of
this Agreement except: (a) when such loss and expense are caused by a defect
in
any Products which were a component of a vascular closure device manufactured
and sold by Buyer, or an affiliate of Buyer; or (b) when caused solely by the
willful misconduct or gross negligence of Seller.
The
indemnifying party’s obligations under this Section shall not apply
unless:
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A.
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The
indemnified party gives the indemnifying party prompt written notice
of
claims for which the indemnified party seeks
indemnification;
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B.
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The
indemnified party cooperates with the indemnifying party in the defense
of
such claims at the cost of the indemnifying
party;
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C.
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The
indemnifying party has the sole right to defend any such claim in
the
manner it deems prudent, including retaining counsel of its choice;
and
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D.
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The
indemnifying party shall have the sole right to settle any such
claim.
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10. USE
OF
TRADEMARK:
Each
party agrees that it will not, without the other party's prior written consent,
use and/or associate the other party, the other party's corporate name or any
of
the other party's trademarks, either orally or in writing, with any of the
other
party's products, except that Buyer may use Seller's name and associate Seller
with Buyer's use of Products as is required by federal or state regulation
in
gaining approval to market or to continue marketing any of Buyer’s devices or
products.
11. CLAIMS
OF NON-CONFORMITY:
Buyer
shall provide notice to Seller of any claim of non-conformity to Specifications
arising from Products within one hundred twenty (120) days after the later
of
the actual or scheduled date of receipt of the shipment containing the specific
Products unit that is the subject of the claim (the “Claim Period”). Except as
to claims for indemnification set forth in Section 8, failure to give notice
of
claim within the Claim Period , shall constitute a waiver by Buyer of all claims
in respect to such Products. No claim of non-conformity to Specifications shall
be allowed after Products has been processed by Buyer in any manner, except
that
opening the packages and inspecting Products with normal care in handling shall
not constitute processing nor disallow such claim. Payment prior to inspection
of Products by Buyer shall not constitute waiver of any rights under this
Agreement. In addition, acknowledgement of receipt on packing slips or bills
of
lading shall not constitute acceptance of Products by Buyer. Products shall
not
be returned to Seller without Seller's prior permission, and then only in the
manner and to the destination prescribed by Seller. Seller shall reimburse
Buyer
for the actual costs of returning any Products returned in accordance with
Seller's instructions. Upon Seller's confirmation of non-conformity, Seller
will
provide Buyer with credit, refund or replacement at Seller’s option for the
non-conforming returned Products. In no event shall either party be liable
to
the other for special, indirect or consequential damages.
12. QUALITY
CONTROL:
All
Products shall meet the Specifications contained in Schedule A, and shall be
subjected to quality control inspections by Seller in accordance with Seller's
quality control standards and system which should be consistent and in
conformity with the laws and regulations set forth in Section 16. If Buyer's
quality control inspection shows that any Products fails to meet the
Specifications contained in Schedule A, Buyer shall notify Seller within
forty-five (45) days of discovery of the non-conformity.
13. DELIVERIES:
Deliveries shall be F.O.B. Exton, Pennsylvania, USA via standard, using shipping
of buyer, freight carrier. Buyer shall be responsible for any and all Products
damage or loss from using a non-refrigerated carrier (unless agreed upon
insulated shipping method is used) for temperature-sensitive Products. Buyer
shall be responsible for all delivery costs and will be invoiced for such by
Seller. Title to and risk of loss in all Products sold hereunder shall pass
to
Buyer upon loading for shipment at Seller's plant.
14. TERMS
OF PAYMENT:
Buyer
will pay to Seller the Invoiced Price net cash thirty (30) days from date of
Seller's invoice, which payment may ultimately be subject to adjustment as
explained in Section 6. Seller may impose a late payment service charge of
1.5%
per month on invoices not paid when due. All payments shall be in United States
currency.
15. FINANCIAL
RESPONSIBILITY:
In the
event Buyer fails to fulfill the terms of payment, or in case Seller shall
have
reasonable doubt at any time as to Buyer's financial responsibility, Seller
may
decline to make further deliveries except upon receipt of cash or satisfactory
security.
16. FORCE
MAJEURE:
No
liability shall result from delay in performance, or nonperformance, caused
by
circumstances beyond the control of the party affected, including, but not
limited to, Act of God, fire, flood, war, Government action, accident, labor
trouble or shortage, inability to obtain material, utilities, equipment or
transportation. Quantities so affected may be eliminated from the Agreement
without liability, but the Agreement shall remain otherwise unaffected, except
that in the event Seller fails to deliver an amount to Buyer under this Section
16, the pricing shall be based on quantities that assume such an amount that
than purchased by Buyer. Any party claiming the benefit of this Section shall
promptly so notify the other party.
17. GOVERNMENT
REGULATION/APPROVALS - RESPONSES TO THIRD PARTY COMPLAINTS OR
CLAIMS:
Buyer
shall be responsible for obtaining all necessary government approvals to market
any device incorporating the Products. Seller shall manufacture Products under
this Agreement in material compliance with the U.S. Quality System Regulation
(QSR) and ISO 9001/EN 46001. Any changes to the Specifications relating to
the
Products must be agreed to in writing by both parties before such changes are
implemented. Seller considers process and sterilization validation to be a
requirement of the QSR; therefore, Buyer shall either fund such required
validations, subject to negotiation with Seller regarding the price and extent
of validation, or provide Seller with written confirmation that Buyer will
assume all responsibility for validation. Upon terms of confidentiality
acceptable to Seller, Seller agrees to cooperate with Buyer in obtaining any
such governmental approvals, including providing required information to the
FDA
or any other governmental agency requesting the information to the extent such
information is readily available or can be developed at little or no cost to
Seller, unless Buyer agrees to fund such information research and preparation.
Similarly, Seller agrees to provide reasonable assistance, including information
and data, as needed by Buyer to respond to complaints or claims asserted by
third parties regarding devices incorporating the Products. If services or
consulting is required to respond to issues raised by a governmental agency
or
in a complaint or claims asserted by a third party beyond what is customarily
or
reasonably provided without charge (“Supplemental Consulting”), Seller will
notify Buyer of its intent to charge for Supplemental Consulting with an
estimate for anticipated charges. If, after notice of Seller’s intent to charge,
Buyer requests such Supplemental Consulting, Seller will charge at a rate that
is discounted by twenty percent (-20%) from its regular consulting rates.
18. DOCUMENTS
INCORPORATED BY REFERENCE:
The
following documents are hereby incorporated by reference:
A.
Schedule A entitled "Products Specifications".
B.
Schedule B entitled "Pricing".
19. ADVERSE
EVENTS, COMPLAINTS AND EFFECTS:
Buyer
will investigate all adverse events, complaints and effects of which Buyer
has
direct or indirect knowledge, in regard to any of Buyer's devices which
incorporate Products. Buyer agrees to promptly report to Seller any such events,
complaints or effects that may relate to Products. Buyer shall be responsible
for all medical device reporting (MDR), vigilance reporting and/or recalls
associated with any devices made or sold by Buyer which incorporate Products.
Seller shall be notified in writing about any such reports or recalls that
appear to relate to Products.
20. COMPLIANCE
WITH LAW:
Each
party represents that it is and will remain in material compliance with all
applicable federal, state and local laws, regulations and orders, regarding
the
manufacture and distribution of products or product that incorporate
products.
21. INDEPENDENT
CONTRACTOR:
The
employees, methods, equipment and facilities of each party shall at all times
be
under that party's exclusive direction and control. Buyer's relationship to
Seller under this Agreement shall be that of an independent contractor and
nothing in this Agreement shall be construed to constitute either party, or
any
of its employees, an agent, associate, joint venturer or partner of the other
party.
22. NOTICES:
All
notices required hereunder shall be sent by certified mail return receipt
requested, or by telex confirmed by such certified mail, to the party to be
notified at its following address or at such other address as shall have been
specified in written notice from the party to be notified. If to "Seller",
addressed to: Xxxxxx Xxxx Corporation, 00 Xxxx Xxxxxxx Xxxxxx, Xxxxx, XX 00000,
attention: Xxxxxx X. Xxxxxxxx. If to "Buyer", addressed to: St. Jude Medical,
Daig Division, Inc., 00000 XxXxxx Xxxxx, Xxxxxxxxxx, XX 00000-0000, attention:
President, with a copy to: General Counsel, St. Jude Medical, Inc., Xxx Xxxxxxxx
Xxxxx, Xx. Xxxx, XX 00000 .
23. ASSIGNMENT:
This
Agreement is not assignable or transferable by one party, in whole or in part,
without the prior written consent of the other party, provided, however, that
Buyer may assign this Agreement without Seller’s consent to an affiliate or a
purchaser of all or substantially all of Buyer’s assets.
24. CLAUSE
HEADINGS:
The
headings of clauses contained herein are used for convenience and ease of
reference and shall not limit the scope or intent of the clause.
25. ENTIRETY
OF AGREEMENT:
This
Agreement embodies the entire agreement and understanding between Seller and
Buyer relative to the subject matter hereof. No amendment, modification or
release from any provision hereof shall be of any force or effect unless it
is
in writing, signed by the parties, and specifically refers to this Agreement.
26. WAIVER:
No
waiver by either party or any breach of the convenants herein contained to
be
performed by the other party shall be construed as a waiver of any succeeding
breach of the same or any other covenants or conditions hereof.
27. TERMINATION:
If the
one party shall commit a breach of any material provision hereof and shall
not
within thirty (30) days of receipt of notice of such breach by the complaining
party remedy that breach, the complaining party shall be entitled to immediately
terminate this Agreement; provided however, that if the nature of the breaching
party’s obligations are such that more than thirty (30) days are required for
cure, then such party shall not be in default if it shall have commenced
performance to cure within the thirty (30) day period and thereafter diligently
attempts to complete performance of cure. This Agreement may also be terminated
with immediate effect by a party upon giving written notice to the other if
the
other is adjudicated insolvent or has been adjudicated to have committed any
act
of bankruptcy or a final, non-appealable order is made or resolution passed
for
the winding up of the other party.
28. CLOSED
HERD:
Seller
shall maintain sufficient records to demonstrate that raw material has met
the
requirements of a Closed Herd per current EN 12442-2 for any such source of
raw
material where the Products is specified by Buyer to come from a Closed Herd.
Specific requirements for sourcing of Products shall be controlled by
Specifications and any applicable laws or regulations.
29. COUNTERPARTS:
This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which shall constitute one and the same
instrument.
Accepted:
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Xxxxxx
Xxxx Corporation
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St.
Jude Medical, Daig Division, Inc.
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By:
/s/ Xxxxxx X. Xxxxxxxx
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By:
/s/ Xxxx X. Xxxxxxx
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Xxxxxx
X. Xxxxxxxx
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Xxxx
X. Xxxxxxx
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Title:
CEO
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Title:
President
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Date:
June 15, 2005
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Date:
June 15, 2005
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SCHEDULE
A
PRODUCTS
SPECIFICATIONS
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KNC SJM
Initials _________ _________
Date
_________ _________
SCHEDULE
B
PRICING
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