Exhibit 10.44
[*Confidential treatment has been requested as to certain portions of this
document. Each such portion, which has been omitted herein and replaced with an
[*}, has been filed separately with the Securities and Exchange Commission.]
PRIMARY AGREEMENT BETWEEN
LifeNet and Osteotech, Inc.
CARRIER AND BIO-IMPLANT ALLOGRAFTS
PRIMARY AGREEMENT
CARRIER AND BIO-IMPLANT ALLOGRAFTS
THIS AGREEMENT, with an Effective Date of January 4, 2002, is by and
between LifeNet, ("LifeNet"), with its principal place of business at 0000 Xxxx
Xxxxx, Xxxxxxxx Xxxxx, Xxxxxxxx 00000, and Osteotech Inc. ("Osteotech"), with
its principal place of business at 00 Xxxxx Xxx, Xxxxxxxxx, XX 00000.
RECITALS
WHEREAS, LifeNet and Osteotech wish to hereby set forth the terms of an
Agreement for Carrier Allografts and Bio-Implant Allografts, both as herein
defined;
WHEREAS, LifeNet is a non-profit tissue bank and recovers, processes,
promotes, and distributes human allograft tissue for transplantation using
LifeNet Technology;
WHEREAS, LifeNet is a Tissue Bank accredited by the American Association of
Tissue Banks ("AATB");
WHEREAS, Osteotech is a publicly traded, for-profit company that processes,
markets and promotes human allograft bone tissue for transplantation using
Osteotech Technology;
WHEREAS, Osteotech is a Tissue Bank accredited by the American Association
of Tissue Banks ("AATB");
WHEREAS, Osteotech and LifeNet both wish for Osteotech to produce Carrier
Allografts using Osteotech Technology for LifeNet and its Alliance Partners to
be marketed and promoted by a third party marketing organization that is
acceptable to both Osteotech and LifeNet ("referred to herein as "The Third
Party Marketing Organization").
WHEREAS, Osteotech and LifeNet both wish for Osteotech to produce
Bio-Implant Allografts using Osteotech Technology for LifeNet and its Alliance
Partners to be marketed and promoted by Osteotech.
WHEREAS, Osteotech provides specialized medical instrumentation for use in
the implantation of Bio-Implant Allografts;
WHEREAS, both The Third Party Marketing Organization and Osteotech either
will provide or provides marketing expertise, educational programs and research
and
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development capabilities and will provide substantial value to LifeNet and
add substantial value to the Allografts described herein; and,
WHEREAS, LifeNet and Osteotech recognize the need for and benefits that
result from the availability of tissues for transplantation and desire to
cooperate with each other in the provision of human tissue Allografts for
clinical transplantation.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Principles
The following is a statement of the parties' intent but is not binding on or
applicable in any way to the interpretation of other provisions in this
Agreement.
1.1. Human tissue is an altruistic gift from a donor to a recipient.
According to the U.S. National Organ Transplant Act (NOTA)(USC 274e),
human tissue cannot be sold and is not the property of any entity, but
rather is held in the care of a tissue bank as a public trust. The
services provided by a tissue bank include recovery, processing,
storage, and distribution of human tissue to the recipient in a form
that is suitable for clinical use and that is helpful in restoring the
recipient's form or function. While tissue recovery and distribution
are generally accepted as functions of tissue banking entities,
reimbursement of the costs associated with providing services
including the processing, promotion, and application of proprietary
technology, are not considered the sale of human tissue as defined
under NOTA.
1.2 LifeNet and its Alliance Partners are non-profit, tax exempt, public
organizations and tissue banks. Human tissue that is recovered and
processed and/or distributed by LifeNet and its Alliance Partners must
comply with all federal and state laws, rules and regulations. It is
the intent that LifeNet and its Alliance Partners shall conduct their
activities in such a way as to protect LifeNet and its Alliance
Partners' non-profit tax exempt status, to uphold LifeNet and its
Alliance Partners' responsibility as stewards of a public trust and
resource, and to comply with all appropriate federal and state
regulations. In an effort to provide the most efficient use of human
tissue to the recipients they serve, LifeNet and its Alliance Partners
wish to make available to patients allograft tissue which is processed
by Osteotech.
1.3 Osteotech is a publicly traded, for-profit company which processes,
markets and promotes allograft tissue. It is the intention of the
parties that, Osteotech process, market and/or promote allograft
tissue recovered and distributed by LifeNet
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and its Alliance Partners. Osteotech intends also to enter into an
agreement with The Third Party Marketing Organization for the
marketing and promotion of certain allograft tissues. All human
allograft tissue processed, marketed and promoted by Osteotech and/or
The Third Party Marketing Organization, which is recovered by LifeNet
and its Alliance Partners, will, at all times, be considered in the
trust and care of LifeNet and its Alliance Partners which are the
parties responsible for maintaining control of the chain of custody of
human tissues from the donor to the recipients and hospitals.
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2.0 Definitions
2.1 "Effective Date" shall mean the effective date of this Agreement.
2.2 "Aseptic Procurement" shall mean the procurement of allograft tissues
under aseptic conditions using standard operating room techniques.
2.3 "Allografts" shall mean specific forms, formulations, or designs of
human allograft bone tissue and referring collectively or individually
to Bio-Implants Allografts and Carrier Allografts.
2.4 "Carrier Allografts" shall mean allograft bone formulations,
prepackaged and distributed within a biocompatible chemical carrier
for delivery of such allograft bone tissue to the surgical site and
which are produced under certain of the claims of the Osteotech
Patents listed in Appendix F.
2.5 "Bio-Implant Allografts" shall mean a line of allograft-based,
structural spinal bio-implants produced by Osteotech including the
tradenames of bio-d(R) or Graftech(TM) Threaded Cortical Bone Dowel,
Graftech(TM) Posterior Ramp, Graftech(TM) Cervical Spacer,
Graftech(TM) Cervical Dowel and Graftech(TM) Cortical Spacers.
2.6 "Osteotech Technology" shall mean Osteotech Patents, Patents pending,
know how, and all proprietary technology owned or controlled by
Osteotech as of the Effective Date, that relates to and/or is useful
in the production of Carrier Allografts and/or Bio-Implant Allografts.
2.7 "LifeNet Technology" shall mean LifeNet Patents, Patents pending, know
how, and all proprietary technology owned or controlled by LifeNet as
of the Effective Date, that relates to and/or is useful in the
production of Carrier Allografts and/or the cleaning of bone to be
used in Bio-Implant Allografts.
2.8 "Affiliate" of a party shall mean any entity or person that directly
or indirectly controls, is controlled by or is under common control
with such party. For purposes of this definition, "control" shall mean
the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of an entity,
whether through the ownership of voting securities, by contract or
otherwise.
2.9 "Alliance Partner or LifeNet Alliance Partner(s)" shall mean any third
party(ies) with whom LifeNet has an alliance or business agreement to
cooperatively recover, process and/or distribute tissue and who has a
signed agreement with LifeNet to participate in supplying donor tissue
for Carrier and/or Bio-implant
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Allografts under this Agreement. Appendix A lists LifeNet current
Alliance Partners, which may be updated from time to time.
2.10 "AATB" shall mean the American Association of Tissue Banks.
2.11 "Standards of Practice or SOPs" shall mean Standards of Practice.
2.12 "OPO Recovery Partner(s) shall mean a HCFA designated organ
procurement organization (OPO) which is bound by a written agreement
with either LifeNet or a LifeNet Alliance Partner to recover and/or
distribute allograft tissue.
2.13 "HCFA" shall mean the Health Care Financing Administration, a division
of Health and Human Services.
2.14 Primary Service Area shall mean the specific areas and/or hospitals
designated by HCFA to LifeNet and its Alliance Partner(s) and their
respective OPO Recovery Partners. Appendix A lists LifeNet and its
Alliance Partners' Primary Service Area, which may be updated from
time to time.
2.15 "Patents" shall mean all United States and Canadian patents, patent
applications and continuations-in -part.
2.16 "Customers" shall mean all hospitals and physicians which place orders
for Allografts in the Territory for use in the Field.
2.17 "Field" shall mean spine, orthopaedic and trauma.
2.18 "FDA" shall mean the United States Food and Drug Administration.
2.19 "End User Fee" shall mean the gross amount invoiced to the Customer
less any sales or use taxes, tariffs, customs duties and other
government charges, shipping/mailing charges, insurance and returns.
2.20 "NOTA" shall mean the National Organ Transplant Act, as may be amended
from time to time.
2.21 "Service Fee" shall mean the amount due to Osteotech for the services
rendered under this Agreement for each Allograft unit distributed and
invoiced to Customer(s) by LifeNet and/or its Alliance Partners or by
Osteotech, as the case may be.
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2.22 "Marketing Agreement" shall mean the agreement between Osteotech and
The Third Party Marketing Organization for the promotion and marketing
of Carrier Allografts produced under this Agreement.
2.23 "First Right" shall mean the right, with priority over any other
party, to supply, produce, acquire, or negotiate.
2.24 "Term" shall mean the Initial Term and the Renewal Terms, if any.
2.25 "Territory" shall mean the United States and Canada.
2.26 "Osteotech" shall mean Osteotech, Inc..
2.27 "LifeNet" shall mean LifeNet.
2.28 "The Third Party Marketing Organization" shall mean a third party
organization with expertise in sales, promotion and marketing of
products similar to Carrier Allografts and Bio-Implants, that is
acceptable to both Osteotech and LifeNet.
2.29 "Osteotech Patents" shall mean the Patents listed in Appendix F and
any extensions and continuations thereof.
2.30 "LifeNet Patents" shall mean those Patents listed in Appendix H and
any extensions and continuations thereof.
3.0 Related Agreements
3.1 Osteotech and LifeNet agree that Osteotech shall use commercially
reasonable efforts to enter into and maintain a Marketing Agreement
with The Third Party Marketing Organization for the marketing and
representation by The Third Party Marketing Organization of Carrier
Allografts during the Term of this Agreement.
3.2 Osteotech and LifeNet hereby agree that LifeNet shall have the right
to enter into written agreements ("Related Agreements") with each of
its Alliance Partners who wish to participate through LifeNet in this
Agreement (the "Primary Agreement") between Osteotech and LifeNet in
the provision of Carrier and Bio-Implant Allografts as outlined in
this Primary Agreement. Copies of such Related Agreements shall be
provided to Osteotech prior to the execution thereof and Osteotech
shall have the right to approve such Related Agreements. Such approval
shall not be unreasonably withheld.
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3.3 Osteotech and LifeNet may sign other agreements or addendums related
to this Agreement (the "Primary Agreement"). The provisions of this
Primary Agreement may be incorporated into such additional
agreement(s) and/or additional provisions and terms may be added to
this Primary Agreement through such additional agreement(s).
4.0 Carrier Allografts
4.1 General
Osteotech is the owner of the Osteotech Patents which contain claims
related to formulations which can be used as carriers for bone tissue.
Osteotech will use commercially reasonable efforts to maintain such
valid Patents and valid Patent claims which will cover the Carrier
Product(s) made under this Agreement. Osteotech will produce Carrier
Allografts pursuant to certain claims of the Osteotech Patents within
the Territory utilizing allograft bone tissue provided to Osteotech by
either LifeNet or a LifeNet Alliance Partner.
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4.2 Carrier Allograft Specification(s) and Name
The Third Party Marketing Organization and Osteotech and LifeNet will
mutually agree on the specifications and name of Carrier Allografts to
be produced. The tradename for the Carrier Allografts produced by
Osteotech pursuant to this Agreement shall be owned by LifeNet and/or
The Third Party Marketing Organization. Osteotech agrees to produce
for LifeNet, if reasonably possible and at LifeNet's option, a line of
glycerol-based carriers with the types and required characteristics
(the "Required Characteristics") as are listed in Appendix B.
4.3 Recovery
LifeNet and its Alliance Partners will provide aseptically recovered,
partially processed bone tissue to Osteotech for processing into
Carrier Allografts in accordance with the policies and procedure set
forth in the Standards for Tissue Banking, and applicable technical
manuals of the AATB, and any other binding applicable international,
federal, state or local regulations or standards.
4.4 Processing
Tissue for Carrier Allografts will undergo initial processing by
LifeNet or its Alliance Partners. Such partially processed bone
tissues for Carrier Allografts will then be shipped to Osteotech to
produce Carrier Allografts in a manner acceptable to Osteotech.
Osteotech will make available, to LifeNet and its Alliance Partners,
SOPs regarding same (see Section 13.4). Carrier Allograft final
processing will be performed at Osteotech.
4.5 Packaging and Labeling
4.5.1 Osteotech shall develop and use a packaging and labeling
system that is acceptable to LifeNet. The Carrier Allograft
packaging system will be supplied and validated by
Osteotech. The Carrier Allograft label will display the
tradename of the Allograft, Osteotech as the processor of
the Allograft, and LifeNet or its Alliance Partner as the
provider of donor tissue. All labeling must adhere to AATB
and FDA regulations and standards, as well as any other
federal, state, and local governmental laws or regulations
which may be applicable.
4.5.2 All Carrier Allograft units will be identified by a unique
code which will allow each unit to be tracked to its
Customer, as may be required by AATB or federal and state
laws, rules and regulations.
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4.5.3 Carrier Allograft initial packaging and labeling will be
performed at Osteotech. Carrier Allograft final packaging
and labeling will be performed at LifeNet or its Alliance
Partner, including the addition of box, insert, and tracking
records. LifeNet or its Alliance Partner will provide the
necessary box, insert and tracking materials.
4.6 Quality Assurance and Documentation
4.6.1 LifeNet and its Alliance Partners will supply Osteotech with
any and all documentation of donor criteria and initial
processing as Osteotech may require to produce Carrier
Allografts. Osteotech will make available to LifeNet and its
Alliance Partners SOPs regarding same. LifeNet and its
Alliance Partners will maintain all donor screening and
suitability records (see Section 13.4).
4.6.2 LifeNet and its Alliance Partners will maintain adverse
event reporting and tissue utilization records.
4.6.3 Osteotech will maintain appropriate Carrier Allograft design
and processing records.
4.6.4 LifeNet and its Alliance Partners will determine donor
suitability and will release tissue to distribution
inventory.
4.6.5 LifeNet and its Alliance Partners and Osteotech will comply
with relevant federal, state, and foreign government, FDA
and AATB regulations and standards.
4.6.6 LifeNet and its Alliance Partners, on the one hand, and
Osteotech, on the other hand, will make available for the
other party's review current SOP's related to activities
necessary to process and distribute the Carrier Allografts
(see Section 13.4).
4.6.7 LifeNet and its Alliance Partners will provide research
tissue to Osteotech, on a periodic basis, to support QA
testing requirements.
4.6.8 Each of the parties will maintain complete and accurate
records and documentation concerning donor tissue which are
applicable to such party's obligations under this Agreement,
such as medical history, donor suitability, processing,
sterility verification, inventory, distribution, and
work-in-process, and will provide appropriate reports at the
request of the other party. All documentation shall be in
English. Osteotech shall
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have the right to reject tissue if it finds the donor or
donor material unacceptable to Osteotech for processing into
Carrier Allografts.
4.6.9 In the event of an FDA, AATB, or other similar inspection,
LifeNet and its Alliance Partners and Osteotech agree to
provide records to the inspecting entity necessary to
satisfy such inspection within 24 hours of a request by such
inspecting entity.
4.7 Distribution
Osteotech will return all processed Carrier Allografts to either
LifeNet or its Alliance Partners, at the sole discretion of LifeNet,
for subsequent distribution and invoicing to Customers as directed by
LifeNet.
4.8 Marketing and Promotion
Pursuant to Section 3.1, Osteotech agrees to appoint The Third Party
Marketing Organization as the exclusive marketing and promotional
agent in the Territory for the Carrier Allografts produced by
Osteotech pursuant to this Agreement in the Field pursuant to the
Marketing Agreement. If Osteotech fails to appoint The Third Party
Marketing Organization acceptable to LifeNet under the Marketing
Agreement for Carrier Allografts, then LifeNet may terminate this
Agreement related to both Bio-implants and Carrier Allografts
immediately upon thirty (30) days written notice to Osteotech. If,
after such initial appointment of The Third Party Marketing
Organization for Carrier Allografts, either Osteotech or The Third
Party Marketing Organization terminates the Marketing Agreement, then:
4.8.1 The provisions and conditions of this Agreement related to
Bio-implant Allografts shall continue for the Term of this
Agreement; and,
4.8.2 LifeNet may, at its sole discretion have the right to
either: (A) terminate all provisions and conditions of this
Agreement related solely to Carrier Allografts upon ninety
(90) days written notice to Osteotech; or, (B) have the
right to continue this Agreement for Carrier Allografts by
providing for the marketing and promotion of Carrier
Allografts directly through the sales force of LifeNet and
its Alliance Partners, provided LifeNet agrees to a new
marketing agreement that is acceptable to Osteotech and
provided that LifeNet can maintain and service the then
existing customer base for Carrier Allografts; or, (C) work
together with Osteotech to locate a new marketing partner
and co-negotiate a new Marketing Agreement for Carrier
Allografts with a new marketing partner provided such new
marketing partner is acceptable to Osteotech and a new
marketing
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partner agrees to the terms of a marketing agreement that is
reasonably acceptable to Osteotech.
4.9 Exclusivity
4.9.1 Osteotech agrees that the Carrier Allografts, when
formulated such that they include the Required
Characteristics as described in Appendix B, shall be
exclusive to LifeNet and/or The Third Party Marketing
Organization in the Territory for the Field in accordance
with and subject to the terms and conditions of the
Marketing Agreement. Such exclusivity shall continue with
respect to LifeNet, in the event that the Marketing
Agreement with The Third Party Marketing Organization is
terminated, as long as LifeNet complies with the terms and
conditions of this Agreement relating to Bio-Implant
Allografts and so long as LifeNet does not terminate this
Agreement related to Carrier Allografts pursuant to Section
4.8.2 (A) and LifeNet complies with either Section 4.8.2 (B)
or 4.8.2 (C).
4.9.2 LifeNet and/or its Alliance Partners shall not be
restricted, in any way, from providing allograft tissue for
or participating in other bone carrier allografts provided
(A) such bone carrier allografts do not infringe a valid
claim of a non-expired, valid U.S. Patent owned by
Osteotech; and, (B) LifeNet and/or its Alliance Partners
have first fulfilled its obligations under this Agreement.
4.9.3 To the extent the Carrier Allografts have the same general
characteristics as Osteotech's Grafton(R) DBM products,
Grafton(R) DBM products remain a product that Osteotech may
continue to market in any manner, either on its own and/or
with or through any third party that it determines in its
sole discretion. Nothing contained herein shall restrict
Osteotech from processing, marketing and/or distributing
other bone carrier allografts, provided such bone carrier
allografts do not contain either of the Required
Characteristics in Appendix B. It is understood and agreed
that Osteotech would not be prohibited from processing,
marketing and/or distributing other bone carrier allografts
which contain some but not all of the characteristics listed
in Appendix B, except that Osteotech agrees not to utilize
either of the Required Characteristics in Appendix B in the
processing, marketing and/or distribution of other bone
carrier allografts.
4.10 LifeNet Technologies
LifeNet has developed proprietary technologies which may be of value
to Osteotech in the production of the Carrier Allografts under this
Agreement.
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LifeNet, at its sole option, will make available to Osteotech such
LifeNet proprietary technology, including demineralization and bone
cleaning technology, which Osteotech may not have available that may
be necessary to produce Carrier Allografts with the desired
characteristics. LifeNet hereby grants to Osteotech a limited,
non-exclusive, royalty-free license to LifeNet proprietary technology,
including any LifeNet patents with claims covering any such
technology. This license is restricted to the use of LifeNet
Technology for Carrier Allografts from tissue supplied by LifeNet and
its Alliance Partners under this Agreement and not for any other use
unless agreed to by LifeNet.
4.11 Carrier Allograft Fees (End User Fees)
[*]
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[*] Certain portions of this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential Treatment with respect to such
omitted portions has been requested.
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4.12 Service Fees
4.12.1 LifeNet and its Alliance Partners agree to pay Osteotech for
its services related to Carrier Allografts pursuant to this
Agreement, including engaging The Third Party Marketing
Organization for marketing and promotion of Carrier
Allografts, according to the Service Fee schedule in
Appendix C.
4.12.2 The Service Fee schedule in Appendix C is based on LifeNet
and its Alliance Partners providing Allowash(TM) treated
bone to Osteotech for subsequent processing into Carrier
Allografts. Osteotech and LifeNet may negotiate further
appropriate arrangements for processing of tissue that may
differ from the Service Fee schedule in Appendix C and may
negotiate changes in the Service Fee schedule to reflect
such changes, from time to time, by mutual written consent.
4.12.3 [*]
4.13 Control of Providers of Tissue for Carrier Allografts.
4.13.1 LifeNet will have the sole right to determine the providers
of all tissue to be used in Carrier Allografts.
4.13.2 LifeNet and its Alliance Partners will have the First Right
to supply all tissues needed for Osteotech to produce
Carrier Allografts pursuant to this Agreement.
4.13.3 In the event of a shortfall in the tissue supply required
for Osteotech to produce Carrier Allografts pursuant to this
Agreement, LifeNet will be solely responsible to find and/or
acquire additional sources of tissue to produce Carrier
Allografts through the donor resources available to LifeNet
and its Alliance Partners.
4.13.4 In the event that the efforts described in Section 4.13.3
are not sufficient to supply tissue for the requirements of
Carrier Allografts, then LifeNet will negotiate with and
approve other needed providers of tissue and will provide
the necessary LifeNet Technology to such needed supplier in
order to provide additional tissue for Carrier Allografts
including, but not limited to, the LifeNet Technologies
described in Section 4.10. In such event, LifeNet will
negotiate licenses to LifeNet Technology, if required, with
additional tissue suppliers which will be at a reasonable
royalty for such technology. Such source may be used, if
needed, to provide tissue
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Securities and Exchange Commission. Confidential Treatment with respect to such
omitted portions has been requested.
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with priority for the production of LifeNet VertiGraft(TM)
Structural Allografts if required by LifeNet .
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4.14 Control of Inventory and Allograft Production
4.14.1 [*]
4.14.2 [*]
4.14.3 LifeNet shall have the sole right to determine the number
and location of distribution centers for Carrier Allografts
produced for LifeNet and its Alliance Partners.
4.14.4 LifeNet will have the right to transfer the responsibilities
described in Section 4.14 to The Third Party Marketing
Organization. LifeNet will notify Osteotech promptly in
writing of any such transfer of responsibilities.
4.15 Regulatory
4.15.1 In the event the FDA should determine that a Carrier
Allograft produced under this Agreement should require a
premarket submission to the FDA and the Carrier Allograft
only contains glycerol and bone, then Osteotech will be
responsible for submitting such regulatory submission at its
own cost.
4.15.2 In the event the FDA should determine that a Carrier
Allograft produced under this Agreement should require a
premarket submission to the FDA and the Carrier Allograft
contains a substance other than glycerol and bone, then
LifeNet and/or The Third Party Marketing Organization will
be responsible for submitting such regulatory submission at
their own cost, and such submission shall be owned by
LifeNet and/or The Third Party Marketing Organization if
submitted under either such parties' name.
4.16 Reports
LifeNet and its Alliance Partners will provide to Osteotech a report,
electronic and printed, within five (5) business days after the end of
each month, which shall include (i) a list of accounts that have
placed orders for Carrier
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Securities and Exchange Commission. Confidential Treatment with respect to such
omitted portions has been requested.
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Allografts with the End User Fees for such Allografts; (ii) a list of
accounts where Carrier Allografts have been invoiced during the month;
(iii) disposition of all orders for Carrier Allografts placed during
the month; and (iv) all outstanding orders for Carrier Allografts.
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5.0 Bio-Implant Allografts
5.1 General
5.1.1 Osteotech will produce Bio-Implant Allografts within the
Territory utilizing allograft bone tissue provided to
Osteotech by LifeNet and its Alliance Partners.
5.1.2 Bio-Implant Allografts, to be produced under this Agreement,
will include Bio-D(R) or Graftech(TM) threaded cortical bone
dowel, Graftech(TM) Posterior Ramp, Graftech(TM) Cervical
Spacer, Graftech(TM) Cervical Dowel and Graftech(TM)
Cortical Spacers.
5.1.3 At the sole discretion of LifeNet, Graftech(TM) Anterior
Ramp Bio-Implant (stand alone cortical femoral ring) and
pinned tissue implants shall be specifically excluded under
the definition of Bio-Implant Allografts for the purpose of
this Agreement.
5.1.4 Osteotech may, at its discretion, offer new products to be
included under this Agreement. Bio-Implant Allografts may
include other implant allografts that Osteotech may develop
at a future time. The inclusion of new Bio-Implant
Allografts under this Agreement will be at the sole option
of LifeNet. Osteotech hereby agrees to provide LifeNet the
right to include Osteotech's Plexus(TM) bio-implant
allografts under this Agreement.
5.1.5 LifeNet will use its best efforts to provide tissue
necessary to meet the LifeNet Projected Bio-Implant
Production set forth in Appendix D, which is based upon the
projections provided by Osteotech and agreed to by LifeNet.
Market demands for Bio-Implant Allografts will vary during
the term of this Agreement, and the need for tissue may
shift from one form to another, but overall, the amount of
tissue provided by LifeNet and its Alliance Partners to
Osteotech for Bio-Implants will remain as described by the
breakdown of cortical and cancellous Bio-Implant Allografts
provided on Appendix D.
5.2 Recovery
LifeNet and its Alliance Partners will provide aseptically recovered, partially
processed bone tissue to Osteotech for processing into Bio-Implant Allografts as
described in Section 5.1 and Appendix D in accordance with the policies and
procedure set forth in the Standards for Tissue Banking, and applicable
technical manuals of the AATB, and any other binding applicable international,
federal, state or local regulations or standards.
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5.3 Bio-Implant Allograft(s) Specification(s)
Osteotech shall be solely responsible for setting the Specifications
for tissue intended for use as Bio-Implant Allografts and will provide
such Specifications to LifeNet and its Alliance Partners.
5.4 Processing
5.4.1 Tissue for Bio-Implant Allografts will undergo initial
processing by LifeNet or its Alliance Partners. Such
partially processed bone tissues for Bio-Implant Allografts
will then be shipped to Osteotech to produce Bio-Implant
Allografts in a manner acceptable to Osteotech. Osteotech
will make available to LifeNet and its Alliance Partners
SOPs regarding such production of Bio-Implant Allografts
(see Section 13.4). Bio-Implant Allograft final processing
will be performed at Osteotech.
5.4.2 LifeNet and its Alliance Partners agree to follow processing
SOPs agreed to by Osteotech related to initial processing
steps performed by LifeNet and its Alliance Partners in
order to maintain osteoinductive and mechanical properties
of Bio-Implant Allografts which will be substantially
equivalent to similar Bio-Implant Allografts produced
entirely using Osteotech Technologies.
5.4.3 [*]
5.4.4 At the option of LifeNet, all non-utilized tissue will be
returned to LifeNet or its Alliance Partners.
5.5 Packaging and Labeling
5.5.1 Osteotech will use a packaging and labeling system that is
acceptable to LifeNet. The Bio-Implant Allograft packaging
system will be supplied and validated by Osteotech. The
Bio-Implant Allograft label will display the name of the
Allograft, Osteotech as the processor of the Allograft, and
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[*] Certain portions of this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential Treatment with respect to such
omitted portions has been requested.
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LifeNet or its Alliance Partner as the provider of donor
tissue. All labeling must adhere to AATB and FDA regulations
and standards, as well as any other federal, state, and
local governmental laws or regulations which may be
applicable.
5.5.2 All Bio-Implant Allograft units will be identified by a
unique code which will allow each unit to be tracked to its
Customer as may be required by AATB or federal and state
laws, rules and regulations.
5.5.3 Bio-Implant Allograft packaging and labeling will be
performed at Osteotech. Bio-Implant Allograft final
packaging and labeling will be performed by Osteotech on
behalf of LifeNet and its Alliance Partners, including the
addition of box, insert, and tracking records. Osteotech
will provide the boxes and inserts. LifeNet and its Alliance
Partners will supply tracking records.
5.5.4 Bio-Implant Allografts will be labeled with Osteotech
trademarks, including, but not limited to Bio-D(R) and
Graftech(TM).
5.6 Quality Assurance and Documentation
5.6.1 LifeNet and its Alliance Partners will supply Osteotech with
any and all documentation of donor criteria and initial
processing as Osteotech may require to produce Bio-Implant
Allografts. Osteotech will make available to LifeNet and its
Alliance Partners SOPs regarding same. LifeNet and its
Alliance Partners will maintain all donor screening and
suitability records (see Section 13.4).
5.6.2 LifeNet and its Alliance Partners will maintain adverse
event reporting and tissue utilization records.
5.6.3 Osteotech will maintain appropriate Bio-implant Allograft
design and processing records.
5.6.4 LifeNet and its Alliance Partners will determine donor
suitability and will release tissue to distribution
inventory.
5.6.5 LifeNet and its Alliance Partners and Osteotech will comply
with relevant federal, state, and any foreign government,
FDA and AATB regulations and standards.
5.6.6 LifeNet and its Alliance Partners, on the one hand, and
Osteotech, on the other hand, will make available for the
other party's review current SOP's
19
related to activities necessary to process and distribute
the Bio-Implant Allografts (see Section 13.4).
5.6.7 LifeNet and its Alliance Partners will provide research
tissue to Osteotech, on a periodic basis, to support QA
testing requirements.
5.6.8 All parties will maintain complete and accurate records and
documentation concerning donor tissue which are applicable
to the respective parties' obligations under this Agreement,
such as medical history, donor suitability, processing,
sterility verification, inventory, distribution, and
work-in-process, and will provide appropriate reports at the
request of the other party. All documentation shall be in
English. Osteotech shall have the right to reject tissue if
it finds the donor or donor material unacceptable to
Osteotech for processing into Bio-Implant Allografts.
5.6.9 In the event of an FDA, AATB, or other similar inspection,
LifeNet and its Alliance Partners and Osteotech agree to
provide records to the inspecting entity necessary to
satisfy such inspection within 24 hours of a request by such
inspecting entity.
5.7 Distribution and Marketing
5.7.1 Bio-Implant Allografts will be maintained at Osteotech on
behalf of LifeNet and its Alliance Partners for distribution
and invoicing to Customers, including those extended to
hospital consignment and field representative programs.
Bio-Implant Allograft order processing details will be
defined and must be acceptable to both LifeNet and
Osteotech. LifeNet will provide tissue-related marketing
materials which Osteotech does not provide, including
artwork, package labeling, inserts, etc.. At LifeNet's sole
discretion, after at least 90 days prior written notice to,
and consultation with Osteotech, LifeNet shall have the
right to elect to distribute Bio-Implant Allografts, which
have been processed from LifeNet and its Alliance Partners'
tissue, directly from LifeNet and/or its Alliance Partners
("Distribution Election").
5.7.2 Osteotech will provide a computer system to allow Osteotech
to ship and invoice for Bio-Implant Allografts on behalf of
LifeNet and its Alliance Partners. Such computer system will
be capable of transferring Bio-Implant Allograft data to
LifeNet and/or its Alliance Partners as may be required.
20
5.7.3 LifeNet hereby appoints Osteotech to provide contract
services for shipping and invoicing Bio-Implant Allografts
on behalf of LifeNet and its Alliance Partners unless and
until a change in the Distribution Election is made
according to Section 5.7.1. Osteotech hereby accepts such
appointment. LifeNet hereby appoints Osteotech as the
exclusive marketing and promotional agent for the
Bio-Implant Allografts produced by Osteotech pursuant to
this Agreement. Osteotech hereby accepts such appointment.
Osteotech shall have the right to appoint independent sales
agents in order to perform its marketing and promotional
activities hereunder.
5.7.4 The order entry process for Bio-Implant Allograft customer
orders will take place at Osteotech to match Bio-Implant
Allograft orders with shipments of instruments needed for
surgical procedures.
5.7.5 As a contract distributor of Bio-Implant Allografts on
behalf of LifeNet and its Alliance Partners, Osteotech
shall:
5.7.5.1 Report, to both LifeNet and to its Alliance
Partners, all Bio-Implant Allografts invoiced and
their unique identifiers from tissue supplied to
Osteotech by LifeNet or its Alliance Partners, in
a manner acceptable to LifeNet, which will allow
LifeNet and its Alliance Partners to track
Bio-Implant Allograft units to the Customer, as
may be required by AATB or federal and state laws,
rules and regulations;
5.7.5.2 Invoice and collect End User Fees for Bio-Implant
Allografts, on behalf of LifeNet and its Alliance
Partners, using the then current Bio-Implant
Allograft End User Fee determined by LifeNet from
time to time;
5.7.5.3 Ensure that all Bio-Implant Allografts are shipped
and handled in a manner acceptable to LifeNet;
5.7.5.4 Ensure that all Bio-Implant Allografts, produced
using tissue from LifeNet or its Alliance
Partners, are shipped as first priority to
hospitals within the LifeNet Service Area as
defined in Appendix A to supply orders for
Bio-Implant Allografts originating from such
hospitals, with priority over any other supplier
or source of similar or same Bio-Implant
Allografts;
5.7.5.5 Report to LifeNet or its Alliance Partner, within
five (5) business days after the end of each
month, all Bio-Implant Allografts produced within
that month from LifeNet's or its Alliance
Partner's donor tissue, including the amount and
unit numbers of Bio-Implant Allografts in
quarantine, in released inventory,
21
and, if allowed, under consignment to hospitals
and representatives;
5.7.5.6 Report to LifeNet or its Alliance Partners, within
five (5) business days after end of that month,
all Bio-Implant Allografts, produced by Osteotech
from LifeNet or its Alliance Partners' donor
tissue, invoiced within that month by Osteotech on
behalf of LifeNet, including the amount invoiced
for each unit, and its unique identifier to allow
LifeNet or its Alliance Partner to invoice
Osteotech for the Service Fees in Appendix E;
5.7.5.7 Upon receipt of the End User Fee by Osteotech on
behalf of LifeNet or its Alliance Partners,
Osteotech shall retain the amount representing the
Osteotech Service Fee determined in accordance
with Appendix E and shall remit the remaining
portion of the End User Fee to LifeNet or its
Alliance partner as described in Section 13.1; and
5.7.5.8 Be responsible for the cost of shipping of
Bio-Implant Allografts to hospitals.
5.8 Bio-Implant Allograft Fees (End User Fees)
[*]
5.9 Service Fees
[*]
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[*] Certain portions of this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential Treatment with respect to such
omitted portions has been requested.
22
[*]
5.9.1 LifeNet and its Alliance Partners shall not be obligated to
participate in any trade discounts offered by Osteotech for
Bio-Implant Allografts.
5.9.2 Service Fees from any future Bio-Implant Allografts, beyond
those listed in Appendix E, shall be negotiated and agreed
to in writing by Osteotech and LifeNet.
5.9.3 LifeNet agrees to consider an Annual End User Fee increase
that would take place on/about January 1, or as negotiated.
In the event of such an increase, LifeNet will agree to a
proportional increase in the Osteotech Service Fee for
Bio-Implant Allografts.
5.9.4 In the event that LifeNet should decide to unilaterally
lower the End User Fee without the mutual consent of
Osteotech, then LifeNet will continue to pay the last agreed
upon Osteotech Service Fee for Bio-Implant Allografts.
5.10 Bio-Implant Allograft Instrumentation
Osteotech will inventory and ship related allograft instrument
systems. Osteotech will develop, produce, inventory and ship surgical
technique guides and procedure videos, surgical templates and
professional education materials. Additional revenue resulting from
Osteotech charges for specialty instruments and the like, other than
for the implants, is not subject to this Agreement.
5.11 Control of Inventory and Bio-implant Allograft Production
5.11.1 [*]
5.11.2 Osteotech will have the right to produce Bio-Implant
Allografts from LifeNet and its Alliance Partners combined
bone tissue availability to a maximum total inventory of
Bio-Implant Allografts, including quarantined and in-house
inventory [*] .
----------
[*] Certain portions of this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential Treatment with respect to such
omitted portions has been requested.
23
5.11.3 In the event that the inventory of a Bio-implant Allograft
should [*] in Section 5.11.2, then LifeNet shall have sole
option to direct Osteotech to cease the production of such
Bio-Implant Allografts until such time as the inventory
level [*].
5.12 Regulatory
In the event the FDA should determine that a Bio-Implant Allograft
produced under this Agreement should require a premarket submission to
the FDA, Osteotech will be responsible for submitting such regulatory
submission at its own cost.
5.13 LifeNet Technologies
LifeNet has developed proprietary bone cleaning technologies which may
be of value to Osteotech in the production of the Bio-implant
Allografts under this Agreement. LifeNet, at its sole option, will
make available to Osteotech such LifeNet proprietary bone cleaning
technology which Osteotech may not have available that may be
necessary to produce Bio-Implant Allografts from tissue supplied by
LifeNet and its Alliance Partners. LifeNet hereby grants to Osteotech
a limited, non-exclusive, royalty-free license to such proprietary
cleaning technologies. This license is restricted to the use of such
LifeNet Technology for Bio-Implants Allografts produced from tissue
supplied by LifeNet and its Alliance Partners under this Agreement and
not for any other use unless agreed to by LifeNet.
6.0 Intellectual Property
6.1 LifeNet and Osteotech will collaborate on the application of existing
relevant intellectual property owned or controlled by each of such
parties for the purpose of processing and distributing the Carrier
Allografts as provided in this Agreement.
6.2 LifeNet will have the non-exclusive limited license to use the
technology covered by claims in Osteotech Patents solely for the
purpose of processing and distributing the Carrier and Bio-Implant
Allografts pursuant to this Agreement without the payment of
additional royalties or fees to Osteotech other than those provided in
this Agreement and other than the fees pursuant to existing agreements
between Osteotech and LifeNet.
----------
[*] Certain portions of this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential Treatment with respect to such
omitted portions has been requested.
24
6.3 In the case of new, jointly developed intellectual property related to
Carrier Allografts, LifeNet and Osteotech will determine the
inventorship of any new patent, or authorship of any cooperative work
in accordance with applicable patent law.
6.4 Relevant patents will be identified in package labeling of Carrier and
Bio-Implant Allografts.
6.5 With regard to new proprietary technologies which are jointly
developed by Osteotech and LifeNet as a result of this Agreement,
LifeNet hereby incorporates into this Agreement a limited,
non-exclusive, royalty-free license to Osteotech, and Osteotech hereby
incorporates into this Agreement a limited, non-exclusive,
royalty-free license to LifeNet.
7.0 Confidentiality
As used herein, "Confidential Information" shall mean all confidential
or proprietary information that is reduced to writing, marked as
confidential and given to one party by the other party relating to
such other party or any of LifeNet's Alliance Partners, including, but
not limited to, information regarding any of the products of such
other party or any of LifeNet's Alliance Partners, information
regarding its trade secrets, patents pending, proprietary know-how,
scientific data, designs, formulas, business plans, and financial
data. Except as specifically provided in this Agreement, neither party
shall, during the term of this Agreement and after the termination of
this Agreement, use or disclose to third parties any Confidential
Information of the other and each party shall insure that its
employees, officers and agents shall not use or disclose to third
parties any Confidential Information of the other; provided, however,
that each party may disclose Confidential Information to its Alliance
Partners, or consultants if such persons are informed of the
confidential nature of such information and are under an obligation to
keep such information confidential to the same extent as such party.
Confidential Information shall not include information that (i) was
already known to the receiving party at the time of its receipt
thereof, as evidenced by its written records, (ii) is disclosed to the
receiving party after its receipt thereof by a third party who has a
right to make such disclosure without violating any obligation of
confidentiality, (iii) is or becomes part of the public domain through
no fault of the receiving party, (iv) is verbally disclosed to the
receiving party without written notice of its confidential nature at
the time of disclosure or within one (1) month thereafter, or (v) is
required to be disclosed to comply with applicable laws or regulations
or an order of a court or regulatory body having competent
jurisdiction; provided the receiving party gives sufficient notice to
the disclosing party in a time period
25
sufficient to contest the requirement. All Confidential Information
shall remain the property of the disclosing party. Neither party shall
make copies of any Confidential Information of the other party without
the prior written consent of such other party unless for distribution
to employees or agents of the receiving party having a need to know
and each receiving party shall return to the disclosing party promptly
upon request by the disclosing party or at its option, destroy all
Confidential Information disclosed by the disclosing party along with
all copies made thereof and all documents or things containing any
portion of any Confidential Information.
8.0 Tradenames and Trademarks
8.1 Ownership
Both LifeNet and Osteotech acknowledge that neither has any rights in
any copyrights, trademarks, tradenames, or insignia owned by the other
anywhere in the world. Both LifeNet and Osteotech undertake that they
will not assert any rights in any such intellectual properties arising
by reason of this Agreement or the use of any such intellectual
properties hereunder. Each party shall use the other party's
trademarks and tradenames in connection with its activities hereunder
but only as and to the extent expressly authorized by this Agreement.
8.2 Use
If either party desires to use the trademark(s) and/or name of the
other party in an advertisement, marketing materials, or promotional
literature, or in connection with any product or service, such party
must first seek the prior written approval of the party owning the
rights to such trademark and/or name. Such approval shall be within
the sole discretion of the other party. Nothing in this Agreement
shall be construed as conferring any general license right to use any
name, tradename, trademark, or other designation (including
contraction, abbreviation or simulation) of either party by the other
party in advertising, publicity or other promotional activities, or in
connection with a product.
8.3 Return of Materials
Upon termination or expiration of this Agreement, each party shall as
soon as practicable deliver to the other party or its designee free of
charge, or certify destruction of, any and all materials, including
signs, advertising matter and catalogues containing such trademarks or
tradenames of such other party then in its possession or in the
possession of its employees or agents and shall cease from making
further use of any such materials, trademarks or tradenames.
26
8.4 Survival
This Section 8 shall survive termination of this Agreement, however
arising.
9.0 Representations And Warranties
9.1 Product Warranties
LifeNet represents and warrants that all donor tissue supplied by
LifeNet in connection with this Agreement shall be provided in
accordance with FDA and AATB regulations and standards, as well as any
federal, state, and local governmental laws or regulations which may
be applicable.
9.2 Based upon its understanding of current FDA regulations, Osteotech
represents and warrants that the Allografts in existence and being
distributed as of the Effective Date do not require and are not
subject to any FDA clearance and approval requirements. Osteotech and
LifeNet each represents and warrants that it shall comply with all
present and future statutes, laws, ordinances and regulations relating
to the recovery of donor tissue and the manufacture, assembly,
packaging, labeling, supply and distribution of the Allografts,
including, but not limited to, those enforced by the FDA, including
compliance with FDA's quality system regulations, applicable FDA
clearance and approval requirements, and applicable FDA requirements
related to human tissue-based products.
9.3 Intellectual Property
Osteotech represents and warrants that, to the best of its knowledge,
(i) Osteotech owns all necessary rights, title and interest in and to
or otherwise has the necessary licenses to the Osteotech Patents, (ii)
no academic institution, member of an academic institution,
corporation or other entity, or any local, state or federal government
holds any unlicensed or unassigned property rights in any Osteotech
Patent, (iii) the processing, use and promotion of the Allografts in
accordance with the terms of this Agreement does not infringe any
third party's rights under any patent, copyright, trademark or trade
secret right (provided that Osteotech makes no representation or
warranty concerning the use of any LifeNet technology in connection
with any such processing, use or promotion), and (iv) the use of the
Osteotech trademarks by LifeNet and its Alliance Partners hereunder
does not and will not infringe the rights of any third party. LifeNet
is aware that (i) University of Florida Tissue Bank, Inc. ("UFTB"),
Regeneration Technologies, Inc., Sofamor Xxxxx Group, Inc. and Sofamor
Xxxxx X.X. have
27
sued Osteotech claiming that Osteotech's bio-d(R) Threaded Cortical
Bone Dowel infringes certain patents held by UFTB and (ii) Sofamor
Xxxxx Group, Inc. and Sofamor Xxxxx X.X. have sued Osteotech claiming
that the instruments used to implant the bio-d(R) Threaded Cortical
Bone Dowel infringes certain patents held by Sofamor Xxxxx, Inc ..
9.4 Execution and Performance of Agreement
LifeNet and Osteotech each represents and warrants to the other that
it has full right, power and authority to enter into and perform its
obligations under this Agreement. LifeNet and Osteotech each further
represents and warrants to the other that the performance of its
obligations under this Agreement will not result in a violation or
breach of, and will not conflict with or constitute a default under
any agreement, contract, commitment or obligation to which such party
or any of its Affiliates is a party or by which it is bound and that
it has not granted and will not grant during the term of this
Agreement or any renewal thereof, any conflicting rights, license,
consent or privilege with respect to the rights granted herein.
10.0 Indemnification and Insurance
10.1 Patent Indemnification
10.1.1 Osteotech agrees to indemnify LifeNet and any of its
Alliance Partners against any and all claims, judgments, or
damages made or obtained by a third party for patent
infringement resulting from the processing, marketing or
distribution of Allografts pursuant to this Agreement.
Should LifeNet or any of its Alliance Partners be made a
party to any patent infringement or declaratory judgment
action by a third party directly related to the processing,
marketing or distribution of Allografts pursuant to this
Agreement, Osteotech will pay for all legal and associated
costs to defend LifeNet or any such Alliance Partners from
such actions including, but not limited to, all monetary
judgments and damages against LifeNet and any Alliance
Partners and including all attorney's fees, unless and to
the extent that such judgment and damages are proximately
caused by the negligence or intentional acts of LifeNet or
such Alliance Partners. Claims, judgments or damages
resulting from the use of LifeNet Technology or any
modification of any Allografts by LifeNet or any of its
Alliance Partners not approved by Osteotech in writing are
excluded from this indemnification.
28
10.1.2 LifeNet agrees to indemnify Osteotech against any and all
claims, judgments, or damages made or obtained by a third
party for patent infringement resulting from the use of
LifeNet Technology in accordance with the terms of this
Agreement. Should Osteotech be made a party to any patent
infringement or declaratory judgment action by a third party
directly related to the use of LifeNet Technology in
accordance with the terms of this Agreement, then LifeNet
will pay for all legal and associated costs to defend
Osteotech from such actions including, but not limited to,
all monetary judgments and damages against Osteotech and
including all attorney's fees, unless and to the extent that
such judgment and damages are proximately caused by
Osteotech's negligence or intentional acts. Claims,
judgments or damages resulting from actions taken as a
result of any modification of LifeNet Technology by
Osteotech not approved by LifeNet in writing are excluded
from this indemnification.
10.1.3 LifeNet or any Alliance Partners agree to indemnify
Osteotech against any and all claims, judgments, or damages
made or obtained by a third party for patent infringement,
resulting from modification by LifeNet or any of its
Alliance Partners of any Allografts, not approved by
Osteotech in writing. Should Osteotech be made a party to
any patent infringement or declaratory judgment action by a
third party directly related to modification by LifeNet or
any of its Alliance Partners of any Allografts, not approved
by Osteotech in writing, then LifeNet or any Alliance
Partners will be jointly and severally obligated to pay for
all legal and associated costs to defend Osteotech from such
actions including, but not limited to, all monetary
judgments and damages against Osteotech and including all
attorney's fees, unless and to the extent that such judgment
and damages are proximately caused by Osteotech's negligence
or intentional acts.
10.2 General Indemnification
10.2.1 Indemnification by Osteotech
Osteotech agrees to defend, hold harmless and indemnify
LifeNet and any Alliance Partners, against any damages,
litigation costs, losses, obligations, liabilities, claims,
actions or causes of actions sustained or suffered by
LifeNet or any of its Alliance Partners arising from (i) a
breach or default by Osteotech of any of its
representations, warranties or covenants contained in this
Agreement; (ii) claims of trademark or copyright
infringement not covered by the patent indemnification
provided in Section 10.1.1 related solely to trademarks or
copyrights provided or used by Osteotech; (iii) a defect in
any finished unit of tissue
29
processed by Osteotech under this Agreement to the extent
such defect results from an error or omission by Osteotech
(including any employee or agent of Osteotech or other
person to whom Osteotech has delegated any processing
activities or any processing related activities hereunder),
or from a failure of workmanship, by Osteotech; (iv) any
medical claim made by any employee or authorized agent of
Osteotech regarding tissue provided by LifeNet or any of its
Alliance Partners which is processed by Osteotech pursuant
to this Agreement (a) which is required by applicable laws
or regulations to be approved by a relevant regulatory
agency and has not been so approved and/or (b) which is not
supported by credible objective scientific evidence; or (iv)
a false and misleading representation made by any employee
or authorized agent of Osteotech regarding any tissue
processed by Osteotech pursuant to this Agreement which is
provided by LifeNet or any of its Alliance Partners.
10.2.2 Indemnification by LifeNet
LifeNet or any Alliance Partners agree to defend, hold
harmless, and indemnify Osteotech against any damages,
litigation costs, losses, obligations, liabilities, claims,
actions or causes of action sustained or suffered by
Osteotech arising from (i) a breach or default by LifeNet or
any of its Alliance Partners of any of their
representations, warranties or covenants contained in this
Agreement; (ii) claims of trademark or copyright
infringement not covered by the patent indemnification
provided in Section 10.1.2 related solely to trademarks or
copyrights provided or owned and used by LifeNet or any of
its Alliance Partners; (iii) a defect in any unit of tissue
(a) recovered and/or processed by LifeNet or any of its
Alliance Partners under this Agreement to the extent such
defect results from an error or omission by LifeNet or any
of its Alliance Partners (including any employee or agent of
LifeNet or any of its Alliance Partners or other person to
whom LifeNet or any of its Alliance Partners delegated any
processing activities, or any tissue recovery or
distribution related activities hereunder, or from a failure
of workmanship by LifeNet or any of its Alliance Partners
or, (b) resulting from tissue recovery, processing, and/or
distribution activities performed by LifeNet or any of its
Alliance Partners pursuant to this Agreement, including
without any limitation any testing performed by or at the
direction of LifeNet or any of its Alliance Partners; (iv)
any medical claim made by any employee or authorized agent
of LifeNet or any of its Alliance Partners regarding any
tissue processed by Osteotech which is provided by LifeNet
or any of its Alliance Partners pursuant to this Agreement
(a) which is required by applicable laws or regulations to
be approved by a relevant regulatory agency and has not been
so approved
30
and/or (b) which is not supported by credible objective
scientific evidence; or (v) a false and misleading
representation made by any employee or authorized agent of
LifeNet or any of its Alliance Partners regarding any tissue
processed by Osteotech which is provided to LifeNet or any
of its Alliance Partners pursuant to this Agreement.
10.2.3 Indemnification Procedures
For purposes of Sections 10.1.1 and 10.2.1 above, Osteotech
shall be the "indemnifying party" and LifeNet or its
Alliance Partners shall be the "indemnified party" and for
the purposes of Sections 10.1.2, 10.1.3, and 10.2.2 above,
LifeNet or its Alliance Partners shall be the "indemnifying
party" and Osteotech shall be the "indemnified party". The
obligations and liabilities of the indemnifying party
hereunder with respect to claims resulting from the
assertion of liability by third parties shall be subject to
the following terms and conditions:
10.2.3.1 The indemnified party shall give written notice to
the indemnifying party of any assertion of claim
by a third party which might give rise to a claim
by the indemnified party against the indemnifying
party based on the indemnity contained herein,
stating the nature and basis of said assertion and
the amount thereof, to the extent known, within
five (5) business days after an officer of the
indemnified party learns of the claim or receives
notice thereof. Failure to give such notice within
five (5) business days may, at the indemnifying
party's option result in a reduction in any
subsequent indemnification payment by an amount
equivalent to the expenses and/or losses
demonstrated to have been caused by such delay in
notification.
10.2.3.2 In the event any action, suit or proceeding is
brought against the indemnified party, with
respect to which the indemnifying party may have
liability under the indemnity agreement contained
herein, the action, suit or proceeding shall, upon
the written agreement of the indemnifying party
that it is obligated to indemnify under the
indemnity agreement contained herein, be defended
(including all proceedings on appeal or for review
which counsel for the defendant shall deem
appropriate) by the indemnifying party. The
indemnified party shall have the right to be
represented by advisory counsel and accountants,
at its own expense, and shall be kept fully
informed of such action, suit or proceeding at all
stages thereof, whether or not it is so
represented. The indemnifying party shall make
available to
31
the indemnified party and its attorneys and
accountants all books and records of the
indemnifying party relating to such action, suit
or proceeding. The parties will render reasonable
assistance to each other in order to ensure the
proper and adequate defense of any such action,
suit or proceeding.
10.2.3.3 The indemnifying party shall not make any
settlement of any claims without the written
consent of the indemnified party, which consent
shall not be reasonably withheld or delayed.
10.2.3.4 The indemnified party shall not make any
settlement of any claims without the written
consent of the indemnifying party.
10.3 Insurance
Each of LifeNet and its Alliance Partners and Osteotech agrees to
maintain at all times sufficient liability insurance to cover their
respective obligations under this Agreement, so long as such insurance
is available and for reasonable premiums. The amount of insurance will
not alter any obligations that may arise as a result of the
indemnification obligation provided in Sections 10.1 and 10.2.
11.0 Term
11.1 Initial and Renewal Terms
Except as otherwise provided below and pursuant to Section 4.8, the
Initial Term of this Agreement for both Carrier and Bio-implant
Allografts shall commence on the Effective Date and shall continue for
a period of five (5) years (the "Initial Term") and the termination
date of this Agreement shall be the same as the Marketing Agreement
between Osteotech and The Third Party Marketing Organization.
Thereafter this Agreement will automatically renew for successive one
(1) year periods (each a "Renewal Term") unless a party has given the
other party written notice of its intent not to renew the Agreement,
which notice shall be delivered at least ninety (90) days prior to the
expiration of the then current term.
11.2 Bankruptcy
ThisAgreement may be terminated by either party if the other party
files a voluntary petition for bankruptcy or reorganization, is the
subject of an involuntary petition for bankruptcy which is not
dismissed within thirty (30) days, has its affairs placed in the hands
of a receiver, enters into a composition for the benefit of creditors,
or is deemed insolvent by a court of competent jurisdiction.
32
11.3 Representations, Warranties and Covenants
ThisAgreement may be terminated by either party if a party is in
material breach of its representations and warranties or covenants
contained in this Agreement; provided, that the non-breaching party
has provided at least thirty (30) days prior written notice to the
breaching party identifying the breach and such breach has not been
cured within such thirty (30) day period.
11.4 Infringement
11.4.1 Notices of Carrier Allograft Infringement
If LifeNet or any Alliance Partners are served as a party to
a lawsuit filed by a third party that any Carrier Allograft
infringes any claim of any U.S. or Canadian patent or
reissues or re-examinations thereof, LifeNet or any Alliance
Partners may, at their sole discretion, terminate their
supply of tissue for, processing of and/or distribution of
the Carrier Allograft which is the subject of such third
party lawsuit upon thirty (30) days prior written notice to
Osteotech and this Agreement shall continue with respect to
other Carrier Allografts not subject to such infringement
lawsuit by a third party. LifeNet and/or any Alliance
Partners shall not have the right to terminate this
Agreement as to any Carrier Allograft which is the subject
of any such patent infringement lawsuit if the infringement
alleged is related to any LifeNet Technology or any
modification made to such Carrier Allograft by LifeNet or
any Alliance Partners which is not approved in writing by
Osteotech. In such case Osteotech shall have the right to
terminate its obligations under this Agreement with respect
to such Carrier Allograft. LifeNet or any Alliance Partners,
on the one hand, and Osteotech, on the other hand, shall
provide prompt written notice to the other party upon
receipt of service of any such third party lawsuit.
11.4.2 Notices of Bio-Implant Infringement
If LifeNet or any Alliance Partners are served as a party to
a lawsuit filed by a third party alleging that any
Bio-Implant Allograft infringes any claim of any U.S. or
Canadian patent or reissues or re-examinations thereof,
LifeNet or any Alliance Partners may, at their sole
discretion, terminate their supply of tissue for, processing
of and/or distribution of the Bio-Implant Allografts which
is the subject of such third party lawsuit upon thirty (30)
days prior written notice to Osteotech and this Agreement
shall continue with respect to other Bio-Implant Allografts
33
not subject to such infringement lawsuit by a third party.
LifeNet or its Alliance Partners shall not have the right to
terminate this Agreement as to any Bio-Implant Allograft
which is the subject of any such patent infringement lawsuit
if the infringement alleged is related to any LifeNet
Technology or any modification made to such Bio-Implant
Allograft by LifeNet or any Alliance Partners which is not
approved in writing by Osteotech. In such case Osteotech
shall have the right to terminate its obligations under this
Agreement with respect to such Bio-Implant Allograft.
LifeNet or any Alliance Partners, on the one hand, and
Osteotech, on the other hand, shall provide prompt written
notice to the other party upon receipt of service of any
such third party lawsuit.
11.4.3 Carrier and Bio-Implant Inventories
If the events of Section 11.4.1 or 11.4.2 occur, and the
Agreement is terminated by LifeNet or any Alliance Partner
as to a Carrier Allograft or Bio-Implant Allograft as
provided in Sections 11.4.1 or 11.4.2, at the option of
LifeNet or any Alliance Partners, Osteotech agrees to
reimburse LifeNet or any Alliance Partners for, and take
possession of, LifeNet and any such Alliance Partners'
remaining in-house and quarantined inventory of such
Bio-Implant or Carrier Allografts. The amount payable by
Osteotech to satisfy its reimbursement obligation in the
preceding sentence shall equal (i) the End User Fee for such
Carrier Allografts returned to Osteotech minus the Service
Fee payable to Osteotech for such Carrier Allografts in
accordance with Appendix C or (ii) the End User Fee for such
Bio-Implant Allografts returned to Osteotech minus the
Service Fee that would have been retained by Osteotech in
accordance with Appendix E, as the case may be.
11.5 Survival
The provisions of this Agreement set forth in Section 7, 8, 9, and 10,
and any other provisions which by their terms survive termination, and
any remedies for the breach thereof, shall survive the termination of
this Agreement.
11.6 Damages
Except as otherwise set forth herein, each party hereto shall be
entitled to recover any and all damages that such party shall have
sustained directly as a result of the breach by the other party hereto
of any of the terms of this Agreement provided that no party shall be
entitled to recover lost profits or other consequential damages.
Termination of this Agreement for any reason shall be without
prejudice to LifeNet or any Alliance Partners' or Osteotech's right to
34
receive all payments accrued and unpaid on the effective date of
termination and shall not release either party hereto from any
liability which at such time has already accrued or which thereafter
accrues from a breach or default prior to such expiration or
termination, nor affect in any way the survival of any other right,
duty or obligation of either party hereto which is expressly stated
elsewhere in this Agreement to survive such termination.
35
11.7 Termination for Change of Ownership or Control.
In the event that 50% or more of Osteotech's voting stock is
controlled by either Regeneration Technologies or Medtronic Sofamor
Xxxxx or any entity under the control of either of those two
organizations, then LifeNet shall have the right to terminate this
Agreement for both Carrier and Bio-implant Allografts upon ninety (90)
days written notice to Osteotech.
11.8 In the event that Osteotech were to establish a relationship with
either Regeneration Technologies or Medtronic Sofamor Xxxxx or any
entity under the control of either of those two organizations,
involving the transfer and/or processing of any allograft tissue, then
LifeNet shall have the right to terminate this Agreement for both
Carrier and Bio-implant Allografts upon ninety (90) days written
notice to Osteotech.
11.9 Donor Sources
11.9.1 In the event that Osteotech should, directly or through
another organization, acquire, recover or process donors
directly from hospitals, funeral homes, or Medical Examiner
Offices that are located within the Primary Service Area
and/or hospitals designated by HCFA to LifeNet and/or its
OPO Recovery Partners and/or LifeNet's Alliance Partners
and/or their OPO Recovery Partners in the Primary Service
Area, as described in Appendix A, then LifeNet may terminate
this Agreement upon ninety (90) days written notice to
Osteotech.
11.9.2 LifeNet shall not have the right to terminate this
Agreement, pursuant to Section 11.9.1, to the extent
Osteotech acquires, recovers or processes donors from or for
any HCFA designated Organ Procurement Organization (OPO).
11.9.3 LifeNet shall not have the right to terminate this
Agreement, pursuant to Section 11.9.1, to the extent
Osteotech acquires, recovers or processes donors from or for
the American Red Cross Tissue Services, Musculoskeletal
Transplant Foundation, [*].
11.9.4 LifeNet shall not have the right to terminate this
Agreement, pursuant to Section 11.9.1, if Osteotech
acquires, recovers or processes donors from or for American
Tissue Services Foundation (ATSF) exclusively within the
----------
[*] Certain portions of this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential Treatment with respect to such
omitted portions has been requested.
36
service area designated by HCFA to Indiana Organ Procurement
Organization (IOPO).
11.9.5 LifeNet's right to terminate this Agreement, pursuant to
Section 11.9.1, shall not be effective until six (6) months
following the Effective Date of this Agreement.
11.10 Termination for Loss of Valid Patent Claims
During the term of this Agreement, in the event that the claims of any
of the Osteotech Patent(s) in Appendix F covering the Carrier
Allograft(s) should be determined to be invalid by a court of law or
the U.S. Patent and Trade Office in a non-appealable final judgment
and no longer cover the Carrier Allograft(s) under this Agreement,
then Osteotech agrees that LifeNet may, at its sole option, terminate
this Agreement at any time upon ninety (90) days written notice to
Osteotech solely as to the Carrier Allografts covered by such
invalidated patent claims, provided that this Agreement shall remain
in effect with respect to Bio-Implant Allografts and any Carrier
Allografts not covered by such invalidated patent claims.
12.0 Dispute Resolution
12.1 Mediation
12.1.1 Any dispute, controversy or claim arising out of or related
to this Agreement, or the interpretation, application,
breach, termination or validity thereof, shall, before the
commencement of any legal proceedings with respect thereto,
first be mediated through non-binding mediation in
accordance with the Model Procedures for the Mediation of
Business Disputes promulgated by the CPR Institute for
Dispute Resolution, or successor thereof ("CPR") then in
effect, except where those rules conflict with these
provisions, in which case these provisions control. A
mediation can be initiated upon either party sending a
written notice to the other party stating an intent to
initiate mediation. The mediation shall be conducted in the
Commonwealth of Virginia and shall be attended by a senior
executive with authority to resolve the dispute from each
party.
12.1.2 The mediator shall be neutral, independent, disinterested
and impartial and shall be selected from a professional
mediation firm.
12.1.3 The parties shall promptly confer in an effort to select a
mediator by agreement. In the absence of such an agreement
within 10 days of
37
initiation of the mediation, the mediator shall be selected
by CPR in accordance with this Agreement as follows: CPR
shall provide the parties with a list of at least 15 names.
Each party shall exercise challenges for cause, two
peremptory challenges, and rank the remaining candidates
within 5 working days of receiving the CPR list. The parties
may together interview the three top-ranked candidates for
no more than one hour each and, after the interviews, may
each exercise one peremptory challenge. The mediator shall
be the remaining candidate with the highest aggregate
ranking.
12.1.4 The mediator shall confer with the parties to design
procedures to conclude the mediation within no more than 45
days after initiation. Under no circumstances may the
commencement of any legal proceedings under Article 12 be
delayed more than 45 days by the mediation process specified
herein absent contrary written agreement of the parties.
12.1.5 Each party agrees not to use the period or tendency of the
mediation to disadvantage the other party procedurally or
otherwise. No statements made by either side during the
mediation may be used by the other or referred to during any
subsequent proceedings.
12.1.6 Each party has the right to pursue provisional relief from
any court, such as attachment, preliminary injunction,
repleven, etc., to avoid irreparable harm, maintain status
quo, or preserve the subject matter of the dispute or claim,
even though mediation has not been commenced or completed.
13.0 Miscellaneous
13.1 Terms of Payment for Services
13.1.1 Service Fees for Carrier Allografts
The Service Fees for Carrier Allografts from LifeNet and/or
its Alliance Partners will be due to Osteotech no later than
ninety (90) days after LifeNet's or a LifeNet Alliance
Partner's invoicing of such Carrier Allografts to Customers.
LifeNet and/or its Alliance Partners shall use its best
efforts to send such invoices to its Customers promptly
after such Carrier Allografts are shipped to such Customers.
13.1.2 Service Fees for Bio-Implant Allografts
38
The net amount of the End User Fee for Bio-Implant
Allografts from Osteotech, minus the Osteotech Service Fee,
will be due to LifeNet or its Alliance Partners no later
than ninety (90) days after Osteotech's invoicing of such
Bio-Implant Allografts to Customers. Osteotech shall use its
best efforts to send such invoices to its Customers promptly
after such Bio-Implant Allografts are shipped to such
Customers. In the event of a change in the Distribution
Election in Section 5.7.1, then the Service Fees for
Bio-Implant Allografts from LifeNet will be due to Osteotech
no later than ninety (90) days after LifeNet's or a LifeNet
Alliance Partner's invoicing of such Bio-Implant Allografts
to Customers.
13.2 Claims and Data
LifeNet and Osteotech will jointly review any relevant
claims such as sterility, viral inactivation, and other
aspects of Allograft performance. LifeNet will have access
to Osteotech's Carrier and Bio-Implant clinical data
pertaining to Carrier and Bio-Implant Allografts produced by
Osteotech under this Agreement.
39
13.3 Tissue Processing, Handling and Disposition
13.3.1 For all tissue sent by LifeNet and its Alliance Partners to
Osteotech under this Agreement, Osteotech agrees to:
13.3.1.1 Maintain adequate records of the processing and
testing of all such tissue and the Allografts
produced from all such tissue; 13.3.1.2 Maintain
adequate records of the disposition of all tissue
and the Allografts and any other tissue grafts
produced from such tissue;
13.3.1.3 Consult with LifeNet and/or its Alliance Partners
regarding the disposition of any tissue that is
not suitable to produce the Allografts under this
Agreement and to destroy or return all such
unacceptable tissue to LifeNet and/or its Alliance
at their direction; and
13.3.1.4 Process, handle, and dispose of all such tissue
according to any applicable federal and state
regulations and current FDA and AATB regulations
and guidelines.
13.3.2 For all tissue sent by LifeNet and its Alliance Partners to
Osteotech under this Agreement, LifeNet and its Alliance
Partners agree to:
13.3.2.1 Maintain adequate records of the recovery, testing
and processing (to the extent applicable) of all
such tissue.
13.3.2.2 Recover, test, handle and dispose of all such
tissue according to any applicable federal and
state regulations, and current FDA and AATB
regulations and guidelines.
13.4 Trade Secrets and Confidentiality
Under this Agreement, both LifeNet and Osteotech agree to disclose to
the other certain trade secrets and Confidential Information related
to processes, SOPs, validations, and techniques as may be necessary.
Each party agrees, under the confidentiality provisions of this
Agreement, to maintain such trade secrets related to processes, SOPs,
and procedures as "Confidential". Information related to SOPs,
processes, and procedures may include, but are not limited to:
13.4.1 Allowash(TM)
13.4.2 Demin(TM)
13.4.3 Graftech(TM)
13.4.4 bio-d(R)Threaded Cortical Bone Dowel
13.4.5 Grafton(R)DBM
13.4.6 LifeNet Demineralization Technology (PAD(TM))
13.4.7 Donor Information
13.4.8 Process Validation
13.4.9 FDA Regulatory Citations and Compliance
40
13.5 Audits
13.5.1 Each party agrees to permit the other to inspect its
facilities and review non-financial records, procedures, and
the like which are specifically and directly related to the
production and quality assurance of Allografts as may be
required by FDA regulations and AATB standards under this
Agreement, provided that such audit shall fall under the
confidentiality provisions of the Agreement and shall not
disclose any trade secrets of the other party. Any such
inspections would be performed upon reasonable notice during
normal business hours; would identify the staff that will
perform such inspection; would maintain as confidential any
information or observation made as part of such inspection;
would be conducted in an appropriate manner and would not
unnecessarily interfere with operations; and, as applicable,
would result in a written report of the results of the
inspection being provided to the other party.
13.5.2 Each party agrees to permit the other to inspect the
financial transactions between the parties, provided such
audit is only directed to the financial transactions related
to this Agreement which are specifically and directly
related to Allografts and provided that such audit shall
fall under the confidentiality provisions of the Agreement.
Any such inspections would be performed upon reasonable
notice during normal business hours; would identify the
staff that will perform such inspection; would maintain as
confidential any information or observation made as part of
such inspection; would be conducted in an appropriate manner
and would not unnecessarily interfere with operations and,
as applicable, would result in a written report of the
results of the inspection being provided to the other party.
of the inspection.
13.6 Regulatory Inspections and Reports
Each party agrees to provide each other with copies of all
correspondence with and from the FDA that is directly related to
Allografts covered by this Agreement, including, but not limited to
inspection reports, enforcement actions, or other documents regarding
the federal regulatory status of the other party's Allografts that are
currently distributed, or components thereof as covered in this
Agreement. Such documents shall be forwarded to the parties within ten
(10) business days of receipt.
13.7 Research Tissue for Development
41
LifeNet agrees to provide to Osteotech, as may be necessary, research
tissue for the development of Allografts under the terms of the
Materials Transfer Agreement, dated June 27, 2001, the conditions and
terms of which will be extended for the term of this Agreement (see
Appendix G).
13.8 Priority for Use of Tissues
[*]
13.9 Tissue Supply
Pursuant to the conditions of Sections 4.9.2, 5.1.5 and 13.8, in the
event that the supply of LifeNet's and LifeNet's Alliance Partners'
human allograft bone tissue, which is available to produce Carrier
and/or Bio-Implant Allografts under this Agreement, is greater, at any
time, than is required to meet the conditions of this
----------
[*] Certain portions of this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential Treatment with respect to such
omitted portions has been requested.
42
Agreement, then LifeNet can, at its sole option, enter into any
agreement with a third party to produce any other human tissue-based
allografts.
13.10 Product Recall/Corrective Action
13.10.1 In the event any governmental agency shall request or order,
or if the parties shall mutually determine to undertake
after notice to and consultation with the other party, a
corrective action with respect to any Carrier or Bio-Implant
Allografts produced under this Agreement, that is a result
of any negligent actions of Osteotech, including any recall,
corrective action or market action, caused by or contributed
to by a breach by Osteotech of any of its warranties,
representations, obligations or covenants contained herein,
then Osteotech shall reimburse LifeNet or any Alliance
Partners for the reasonable costs of such recall or action.
13.10.2 In the event any governmental agency shall request or order,
or if the parties shall mutually determine to undertake
after notice to and consultation with the other party, a
corrective action with respect to any Carrier or Bio-Implant
Allografts produced under this Agreement, that is a result
of any negligent actions of LifeNet or any of its Alliance
Partners, including any recall, corrective action or market
action caused by or contributed to by a breach by LifeNet or
any of its Alliance Partners of any of their respective
warranties, representations, obligations or covenants
contained herein, then LifeNet and/or the LifeNet Alliance
Partner, as the case may be, shall reimburse Osteotech for
the reasonable costs of such recall or action.
13.10.3 LifeNet and its Alliance Partners shall have the right to
discontinue this Agreement related to any Carrier or
Bio-Implant Allograft which is the subject of a recall
pursuant to Section 13.10.1. Osteotech shall have the right
to discontinue this Agreement related to any Carrier or
Bio-Implant Allograft which is the subject of a recall
pursuant to Section 13.10.2. Such notification shall be made
to either party in writing.
13.11 Publicity
Neither party hereto shall originate any publicity, news release, or
other announcement, written or oral, whether to the public press, the
trade, LifeNet's or Osteotech's customers or otherwise, relating to
this Agreement, or to performance hereunder or the existence of an
arrangement between the parties without providing the other party
advance notice of such disclosure pursuant to this Section 13.11.
Neither party shall use the name of the other party or any of
43
its Affiliates or Alliance Partners for advertising or promotional
purposes without the prior written consent of such party.
13.12 Headings
The Section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning and
interpretation of this Agreement.
13.13 Notices
All notices and other communications required or permitted to be given
under this Agreement shall be in writing and shall be considered given
and delivered when personally delivered to the party to whom such
notice or communication is addressed or upon actual receipt or refusal
by addressee if delivered through posting with an overnight courier or
when confirmation is received if sent by facsimile or deposited in the
United States mail, postage prepaid, return receipt requested,
properly addressed to a party at the address set forth below, or at
such other address as such party shall have specified by notice given
in accordance with this Section:
44
If to LifeNet: LifeNet
0000 Xxxx Xxxxx
Xxxxxxxx Xxxxx, Xxxxxxxx 00000
Attention: President and CEO
Facsimile No.: 000-000-0000
If to Osteotech: Osteotech, Inc.
00 Xxxxx Xxx
Xxxxxxxxx, Xxx Xxxxxx 00000.
Attention: President and CEO
Facsimile No.: 000-000-0000
13.14 Failure to Exercise
The failure of either party to enforce at any time for any period any
provision hereof shall not be construed to be a waiver of such
provision or of the right of such party thereafter to enforce each
such provision. The waiver of any term or condition hereof must be in
writing, signed by the party granting such waiver, and any such waiver
shall not be construed as a waiver of any other term or condition of
this Agreement.
13.15 Assignment
This Agreement, or any of the rights and obligations created herein,
shall not be assigned or transferred, in whole or in part, by either
party hereto without the prior written consent of the other party.
Assignments to a wholly-owned subsidiary of a party can be made
without the prior consent of the other party.
13.16 Severability
In the event that any one or more of the provisions (or any part
thereof) contained in this Agreement or in any other instrument
referred to herein, shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, then to the maximum extent
permitted by law, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement or any other
such instrument. Any term or provision of this Agreement which is
invalid, illegal or unenforceable in any jurisdiction shall, to the
extent the economic benefits conferred by this Agreement to both
parties remain substantially unimpaired, not affect the validity,
legality or enforceability of any of the terms or provisions of this
Agreement in any other jurisdiction.
13.17 Relationship of the Parties
45
The relationship of Osteotech and LifeNet established by this
Agreement is that of independent contractors, and nothing contained
herein shall be construed to (i) give either party any right or
authority to create or assume any obligation of any kind on behalf of
the other or (ii) constitute the parties as partners, joint venturers,
co-owners or otherwise as participants in a joint or common
undertaking.
13.18 Governing Law
This Agreement shall be deemed made in, and shall be governed and
construed according to the laws of the Commonwealth of Virginia
without reference to the conflicts of laws provisions thereof.
13.19 Entire Agreement
It is the desire and intent of the parties to provide certainty as to
their future rights and remedies against each other by defining the
extent of their undertakings herein. This Agreement constitutes and
sets forth the entire agreement and understanding between the parties
with respect to the subject matter hereof and is intended to define
the full extent of the legally enforceable undertakings of the parties
hereto, and no promise, agreement or representation, written or oral,
which is not set forth explicitly in this Agreement is intended by
either party to be legally binding. Each party acknowledges that in
deciding to enter into this Agreement and to consummate the
transactions contemplated hereby it has not relied upon any
statements, promises or representations, written or oral, express or
implied, other than those explicitly set forth in this Agreement. This
Agreement supersedes all previous understandings, agreements and
representations between the parties, written or oral, with respect to
the subject matter hereof.
13.20 Counterparts
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
13.21 Expenses
Each party shall pay all of its own fees and expenses (including all
legal, accounting and other advisory fees) incurred in connection with
the negotiation and execution of this Agreement and the arrangements
contemplated hereby.
13.22 Modifications and Amendments
46
This Agreement shall not be modified or otherwise amended except
pursuant to an instrument in writing executed and delivered by each of
the parties hereto.
13.23 Construction
The parties have participated jointly in the negotiation and drafting
of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of
any of the provisions of this Agreement.
13.24 Incorporation of Appendices
The Appendices identified in this Agreement are incorporated herein by
reference and made a part hereof.
13.25 Binding Agreement
This Agreement is not binding on either party unless and until signed
by both parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers.
LifeNet Osteotech, Inc.
By: /s/ XXXX XXXXXXXX By: /s/ XXXXXXX X. XXXXX
---------------------------- ----------------------------
(Signature) (Signature)
Xxxx Xxxxxxxx Xxxxxxx X. Xxxxx
---------------------------- ----------------------------
(Print Name) (Print Name)
Title: President and CEO Title: President and CEO
---------------------------- ----------------------------
Date: 1/4/2002 Date: 1/3/2002
---------------------------- ----------------------------
47
APPENDIX A
LIST OF LIFENET ALLIANCE PARTNERS
AND
PRIMARY SERVICE AREA
PRIMARY SERVICE AREA
LIFENET AND OPO RECOVERY PARTNERS
[*]
SPECIFIC DESCRIPTION OF SERVICE AREA
----------
[*] Certain portions of this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential Treatment with respect to such
omitted portions has been requested.
00
XXXXXXXX X
LIST OF CARRIER ALLOGRAFTS TYPES
CARRIER ALLOGRAFT REQUIRED CHARACTERISITCS
CARRIER ALLOGRAFT TYPES
-----------------------
[*]
----------
[*] Certain portions of this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential Treatment with respect to such
omitted portions has been requested.
49
APPENDIX C
CARRIER ALLOGRAFT
OSTEOTECH SERVICE FEE PERCENTAGE
[*]
----------
[*] Certain portions of this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential Treatment with respect to such
omitted portions has been requested.
50
APPENDIX C
CARRIER ALLOGRAFT
OSTEOTECH SUGGESTED FEE
LIFENET END USER FEE
OSTEOTECH SERVICE FEE
[*]
----------
[*] Certain portions of this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential Treatment with respect to such
omitted portions has been requested.
51
APPENDIX D
LIFENET BIO-IMPLANT PRODUCTION PROJECTIONS
[*]
----------
[*] Certain portions of this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential Treatment with respect to such
omitted portions has been requested.
00
XXXXXXXX X
BIO-IMPLANT ALLOGRAFT
OSTEOTECH SERVICE FEE PERCENTAGE
[*]
----------
[*] Certain portions of this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential Treatment with respect to such
omitted portions has been requested.
00
XXXXXXXX X
BIO-IMPLANT ALLOGRAFT
OSTEOTECH SUGGESTED FEE
LIFENET END USER FEE
OSTEOTECH SERVICE FEE
[*]
----------
[*] Certain portions of this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential Treatment with respect to such
omitted portions has been requested.
54
APPENDIX F
OSTEOTECH
LIST OF RELEVANT PATENTS
[*]
----------
[*] Certain portions of this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential Treatment with respect to such
omitted portions has been requested.
55
APPENDIX G
CONFIDENTIAL
MATERIALS TRANSFER AGREEMENT
THIS AGREEMENT is entered into as of this 27th day of June, 2001
("Effective Date"), by and between Osteotech, Inc. ("Osteotech") having its
principal place of business at 00 Xxxxx Xxx, Xxxxxxxxx, Xxx Xxxxxx 00000 and
LifeNet ("LifeNet") having its principal place of business at 0000 Xxxx Xxxxx,
Xxxxxxxx Xxxxx, Xxxxxxxx 00000.
WITNESSES
WHEREAS, LifeNet and Osteotech hereby wish to perform an evaluation related
to Osteotech Technology in the form of Bone Formulations applied to LifeNet
research bone tissue which may utilize LifeNet Technology in the
demineralization of such research bone tissue.
NOW, THEREFORE, in consideration of the premises and of the mutual promises
contained in this Agreement, Osteotech and LifeNet hereby agree as follows:
DEFINITIONS
"Osteotech Technology" shall mean patents, patents pending, know how, and
all proprietary technology owned or controlled by Osteotech as of the Effective
Date, that relates to and/or is useful in the production of allograft Bone
Formulations derived from human allograft bone tissue.
"LifeNet Technology" shall mean patents, patents pending, know how, and all
proprietary technology owned or controlled by LifeNet as of the Effective Date,
that relates to and/or is useful in the production of demineralized bone derived
from human allograft bone tissue for use in allograft Bone Formulations.
"Bone Formulations" shall mean formulations of human allograft bone tissue
developed utilizing Osteotech Technology.
"Studies" shall mean any research and/or evaluation of Bone Formulations
using Osteotech Technology and/or LifeNet Technology.
"Research Samples" or "Research Test Samples" shall mean human-derived
allograft tissue to be use only for research as described in this Agreement.
Research Samples may only be utilized for which there is documented evidence of
consent that such tissue may be used for research purposes.
1
ARTICLE I
TRANSFER OF MATERIALS
1.1 LifeNet may transfer to Osteotech, Research Tissue Samples of human-derived
allograft bone tissue ("Materials") to which LifeNet may apply LifeNet
Technology as described under this Agreement.
1.2 Osteotech may transfer to LifeNet, Research Tissue Samples of human-derived
allograft bone tissue ("Materials") to which Osteotech may apply Osteotech
Technology as described under this Agreement.
1.3 Osteotech and LifeNet will have a right to use the results of Studies for
its internal use only and shall not publish or otherwise use such results
without the mutual written consent of the other party, except that LifeNet
may share results of studies with DePuy AcroMed, Inc.
1.4 Research Test Samples that may be provided to Osteotech for these Studies
WILL NOT BE SUITABLE FOR TRANSPLANTATION but will have been tested by
LifeNet and determined acceptable for RESEARCH PURPOSES ONLY according to
LifeNet Standards of Practice. Osteotech agrees to ensure that all persons
or parties who work with Research Test Samples for the purposes of this
Agreement will handle such materials as a POTENTIAL HUMAN BIOHAZARD and
utilize acceptable medical biohazard precautions and assume responsibility
for the proper storage, disposal, handling, and/or return to LifeNet upon
completion of the Studies.
1.5 Both Osteotech and LifeNet agree to provide each other with a summary
research protocol, if applicable, of the research and evaluation to be
performed using Research Test Samples.
ARTICLE II
CONFIDENTIALITY
2.1 The results of the Studies and any confidential information belonging to
Osteotech or LifeNet shall be subject to the conditions of the
Nondisclosure Agreement signed between the parties on May 14, 2001 between
LifeNet, Osteotech, and DePuy AcroMed.
2.2 Neither the Osteotech Technology nor the LifeNet Technology shall be used
for the benefit of any third parties.
2
ARTICLE III
RESEARCH MATERIAL DOCUMENTATION
3.1 Osteotech agrees to document the disposition and use of such Research Test
Samples sent by LifeNet and shall provide to LifeNet such documentation in
a manner acceptable to LifeNet Research and Development Policy. Upon
reasonable request, Osteotech shall provide such documentation to LifeNet.
ARTICLE IV
INTELLECTUAL PROPERTY
4.1 During the term of the Agreement(s), new technologies or improvements to
existing technologies, as a direct result of this cooperative research
between Osteotech and LifeNet may be developed by either party or
cooperatively. The intellectual property rights of such new or improved
technologies shall be as follows:
4.1.1. Osteotech Derivative Technology
In the event that during the term of the agreement(s), an
employee(s), or contract worker(s) of Osteotech, alone conceives of
an improvement, invention or discovery relating to a new technology
or improvement to an existing technology, such improvement,
invention, or discovery of Osteotech, and any corresponding
proprietary rights throughout the world, shall be the property of
Osteotech.
4.1.2. Joint Derivative Technology
In the event that during the term of the Agreement(s), an
employee(s) or contract worker(s) of Osteotech and LifeNet, jointly
conceives of an improvement, invention or discovery relating to a
new technology or improvement to an existing technology, such
improvement, invention or discovery and any corresponding
proprietary rights throughout the world shall be owned by Osteotech
and LifeNet.
4.1.3. LifeNet Derivative Technology
In the event that during the term of the Agreement(s), an
employee(s), or contract worker(s) of LifeNet, alone conceives of an
improvement, invention or discovery relating to a new technology or
improvement to an existing technology, such improvement, invention,
or discovery of LifeNet, and any corresponding proprietary rights
throughout the world, shall be the property of LifeNet.
3
ARTICLE V
TERM AND TERMINATION
5.1 Unless sooner terminated or extended, this Agreement shall terminate one
(1) years from the Effective Date. Upon mutual consent of both parties,
this Agreement may be extended beyond the termination date. Each party may
terminate this Agreement, with or without cause, upon thirty (30) days
prior written notice to the other. The provisions of this Article II shall
remain effective for a period of three (3) years from the date of
disclosure and shall survive the termination or expiration of this
Agreement.
ARTICLE VI
MISCELLANEOUS
6.1 If any provision or provisions of this Agreement shall be held invalid,
illegal, or unenforceable, the validity legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
6.2 The parties acknowledge that they have read and understand this Agreement,
and that this agreement is the complete agreement between the parties and
supersedes all proposals and prior agreements, whether written or oral, and
all other communications between the parties relating to the subject matter
of this Agreement. The parties further acknowledge that this Agreement
cannot be modified except by mutual agreement of both parties.
6.3 Signatures on this Agreement may be communicated by facsimile transmission
and shall be binding upon the parties transmitting the same by facsimile
transmission. Counterparts with original signatures shall be provided, to
the other party with five (5) days of the applicable facsimile
transmission, provided, however, that the failure to provide the original
counterpart shall have no effect on the validity or the binding nature of
the Agreement. If executed in counterparts, the Agreement will be as
effective as if simultaneously executed.
6.4 The scope of this Agreement is related only to cooperative research and
evaluation for Bone Formulations between LifeNet and Osteotech and does not
constitute an agreement or offer by either party to license any proprietary
or intellectual property or otherwise to form a business relationship.
Also, this Agreement does not represent an exclusive arrangement between
the parties and either party is free to work on similar projects with third
parties so long as there is no use or disclosure of information considered
as confidential under this Agreement.
4
IN WITNESS WHEREOF, Osteotech and LifeNet have caused this Agreement to be
executed by their respective duly authorized representatives as set forth below.
This Agreement shall be effective as the Effective Date.
LifeNet Osteotech, Inc.
By: /s/ Xxxx Xxxxxxxx By: /s/ Xxxxx Xxxxxxx
--------------------------- ---------------------------
(Signature) (Signature)
Xxxx Xxxxxxxx Xxxxx X. Xxxxxxx
--------------------------- ---------------------------
(Print Name) (Print Name)
Title: President and CEO Title: EVP/CSO
--------------------------- ---------------------------
Date: 6/27/01 Date: 6/28/01
--------------------------- ---------------------------
5
APPENDIX H
LIFENET
LIST OF RELEVANT PATENTS
[*]
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[*] Certain portions of this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential Treatment with respect to such
omitted portions has been requested.
56
