Exhibit 10.9
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT ("Agreement") is entered into as of the 10th day of
June, 1999 by and between GENTRAC, INC. ("Seller"), having its principal place
of business at 0000 Xxxxxxxxx Xxxx, Xxxxxxxxx, XX 00000, and VASCULAR SOLUTIONS,
INC. ("Buyer"), having a principal place of business at 0000 Xxxxxx Xxxx,
Xxxxxxxxxxx, XX 00000.
RECITALS
A. Seller is the manufacturer of a topical thrombin U.S.P. (bovine
origin) product which it markets and sells under the trademark Thrombin-JMI (the
"Trademark").
B. Buyer desires to purchase certain topical thrombin U.S.P. products
from Seller and Seller is willing to sell said products to Buyer pursuant to the
provisions set forth in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the parties agree as
follows:
1. Purchase and Sale of Product. During the Term (as hereinafter defined)
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of this Agreement, Seller agrees to sell and Buyer agrees to purchase, on the
terms and conditions herein stated, Seller's topical thrombin U.S.P. product
listed on Schedule 1 attached hereto (the "Product"). Buyer shall purchase the
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Product solely for inclusion and subsequent resale as part of its vascular
sealing device known as Duett ("Buyer's Device"), and Buyer shall not sell the
Product separately or in conjunction with another product or device or for any
other use except with Seller's prior written consent. Buyer acknowledges that
Buyer is not receiving any exclusive rights hereunder with respect to the
Product and that Seller may sell, and will be selling, the Product to wholesale
distributors and to other users of the Product. Nothing set forth in this
Agreement shall in any way prevent or otherwise limit or restrict Seller's right
to manufacture and sell Product to wholesale distributors or other users and
resellers of the Product.
2. Product Specifications. The Product sold to Buyer hereunder shall meet
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the specifications listed on Schedule 1 attached hereto (the "Specifications")
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and shall be manufactured in accordance with applicable current Good
Manufacturing Practices ("cGMP's") of the U.S. Food & Drug Administration (the
"FDA") for the Product. Animal origin raw materials shall be sourced from USDA
licensed facilities and a USDA certificate shall accompany all shipments of raw
materials. If at any time during the Term of this Agreement, Seller finds it
necessary or desirable to change the formulation, manufacturing processes or
procedures or source of animal origin raw materials for use of the Product, or
to effect any other change relating to the Product which could, to Seller's
knowledge, reasonably require notification to, or approval of, the FDA or any
international regulatory agency for the Buyer's Device, Seller shall not effect
such change with respect to the Product until Seller notifies Buyer
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of such change.
3. Purchase Price. (a) The initial price of the Product shall be as set
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forth in Schedule 2 attached hereto. Seller shall invoice Buyer on each shipment
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of Product, and payment shall be made in all cases net 30 days from the date of
shipment. Any invoiced amounts not paid when due shall accrue a service charge
of 1.5% per month or the maximum rate allowed by law, whichever is lower. The
price of the Product does not include, and Buyer shall also pay for, all freight
charges and any and all excise, sales, use or like taxes resulting from the sale
of the Product to Buyer.
(b) Seller shall have the right, at any and all times during the
Term of this Agreement, to increase the price of the Product charged to Buyer
(the "Buyer's Price") by the increase in Seller's manufacturing costs (raw
materials, labor and overhead) associated with the manufacturing of the Product
upon giving Buyer notice at least thirty (30) days prior to the effective date
of the increase in the Buyer's Price. Furthermore, Seller shall also have the
right to increase the Buyer's Price on an annual basis at the end of each 12
month period following September 1, 1999 (each 12 month period hereinafter
referred to as a "Contract Year") by the same percentage increase(s) established
by Seller during the immediately preceding 12 month period in the wholesale
price of the Product charged to Seller's wholesale purchasers, less any
increase(s) previously made by Seller to the Buyer's Price pursuant to the first
sentence of this Section 3(b) during such 12 month period. Seller shall effect
such annual increase in the Buyer's Price by giving written notice thereof to
Buyer at any time prior to the Contract Year with respect to which the annual
increase is to be effective.
4. Delivery, Shipping, Title.
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(a) Delivery. Time is of the essence with respect to delivery
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of the Product hereunder. All purchases shall be FOB Seller's facility in
Middleton, Wisconsin. If Seller fails to deliver the Product by the scheduled
delivery date for reasons other than the fault of Buyer, Buyer reserves the
right to cancel all or any portion of the purchase order.
(b) Shipping. All shipments will be shipped by Seller freight
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prepaid and Buyer will reimburse Seller for the actual costs of such shipping.
All shipments will be made as directed by Seller by appropriate and reasonable
method of transportation in keeping with the requirements of the Product and the
particular delivery date. Packaging of shipments shall be in accordance with
Seller's customary practices unless otherwise agreed to by Seller. No partial
shipments (that is, in amounts less than that requested by Buyer in accordance
with the provisions of Section 6 hereof) shall be made without Buyer's written
consent.
(c) Title. Seller shall retain title and bear the risk of loss
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until such time as a shipment has been delivered to the carrier designated by
Buyer or, if no such designation has occurred, Seller's designated carrier. Upon
such delivery to the carrier, title and risk of loss shall pass to Buyer.
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5. Quality Standards. Buyer shall have access to Seller's Quality
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Assurance SOP's for the Product, with proprietary information subject to
reasonable protection, and to all quality systems employed by Seller in
connection with the manufacture and packaging of the Product. In addition,
Seller shall provide the documentation necessary to allow Buyer to reference
Seller's relevant Master File(s) in any submissions with the FDA and any
international regulatory filings or approvals in connection with the approval of
the Buyer's Device. Buyer shall provide Seller with a copy of any proposed
filing or submission with the FDA or any international regulatory agency with
respect to the Buyer's Device which includes Seller's proprietary information or
other information from Seller's Master Files or Quality Assurance SOP's, and
Buyer shall receive Seller's approval with respect to such filing or submission
prior to filing or submitting the material to the FDA or international
regulatory agency. All of Seller's proprietary information with respect to the
Product shall be subject to reasonable protection and Buyer shall comply with
Seller's rules and procedures with respect thereto. Seller shall, at no cost or
expense to Seller, cooperate with Buyer's reasonable requests for information
and assistance with respect to all FDA and international regulatory filings,
audits and approvals associated with the Product being sold to Buyer hereunder,
and Seller shall, at no cost or expense to Seller, reasonably cooperate with
Buyer to address any cGMP deficiencies noted during any such FDA audit
associated with the Product being sold to Buyer hereunder. Buyer agrees to
handle, store and distribute the Product in a manner consistent with the
conditions stated on the Product labeling and the conditions stated in Buyer's
submission(s) to the FDA and/or foreign regulatory agencies. Nothing set forth
herein shall require Seller to provide Buyer with any information pertaining to
Seller's batch records of the Product or with any information pertaining to the
proprietary processes utilized in manufacturing the Product, all such
information being deemed trade secrets of Seller. Buyer and Seller shall execute
and keep on file, a contract manufacturing agreement in the form of Schedule 3
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attached hereto, or such other form as Seller may determine is required by the
U. S. Center for Biologics Evaluation and Research ("CBER").
6. Ordering Procedures.
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(a) Purchase Orders. Sales of the Product will be made pursuant
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to purchase orders issued by Buyer and accepted by Seller, specifying quantities
desired and delivery dates. The Buyer's Prices for the Product shall be those in
effect at the time that the purchase order is received by Seller. Each purchase
order must be based on full "batch sizes" as set forth in Schedule 4 attached
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hereto; however, multiple shipping dates may be requested for individual
purchase orders. Purchase orders which are not based on full batch sizes will be
deemed automatically rejected. Buyer shall be entitled to use its standard form
of purchase order; provided, however, none of the terms or conditions of Buyer's
purchase order shall be applicable except those specifying quantity ordered,
delivery location(s), delivery schedule and invoice information, all of which
must be in accordance with the provisions of this Agreement. In the event of any
conflict between the terms of any purchase order and the terms of this
Agreement, the terms of this Agreement shall control.
(b) Order Forecasts. Upon the signing of this Agreement, and
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continuing on or before the 1st day of each month during the Term of this
Agreement, Buyer will provide Seller
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with a rolling forecast (the "Forecast") of its estimated requirements for
Product for each of the next 24 calendar months during the Term of this
Agreement. The initial Forecast shall be for the 24 month period commencing
September 1, 1999. The Forecasts shall be provided by Buyer to Seller pursuant
to the forecast form set forth in Schedule 5 attached hereto , unless otherwise
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agreed to in writing by Seller. Each such Forecast will be done in good faith
but will not bind Buyer to the purchase of any specific amount of Product,
except that (i) Buyer shall be required to purchase the Forecast amount for each
of the first four (4) calendar months listed on the 24-month Forecast, and (ii)
the quantity purchased shall be subject to the limitations set forth in
paragraph (e) of this Section 6. There will be no variances in the amounts
purchased by Buyer during the first four months from the applicable Forecast
without the prior written consent of Seller. Upon receipt of each Forecast,
Seller will review the Forecast and use reasonable efforts to notify Buyer
whether Seller reasonably believes that it will be able to manufacture and sell
to Buyer the quantities of Product shown on the Forecast, based upon Seller's
capacity and its other orders for Product. In the event that Seller reasonably
believes that it will be unable to manufacture and sell Product to Seller as per
the Forecast, Seller will promptly notify Buyer of such and Buyer will revise
its Forecast and corresponding purchase orders accordingly.
(c) Amount and Delivery Dates. Buyer shall issue its purchase
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order(s) at the same time that it delivers its monthly Forecast to Seller,
requesting delivery no sooner than sixty (60) days from the date of the receipt
of the purchase order by Seller. Each purchase order shall be in accordance with
the provisions and subject to the limitations of Section 6 of this Agreement.
(d) Minimum Purchases. Buyer agrees to purchase a minimum
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amount of Product each Contract Year as set forth in Schedule 6 attached hereto
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(the "Minimum Requirements"). In the event that Buyer fails to purchase the
Minimum Requirements as herein set forth, Seller shall have the right, in
addition to all other rights and remedies available at law or equity, to
terminate this Agreement pursuant to Section 13 of this Agreement.
(e) Limitations on Quantity of Product Ordered. Notwithstanding
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anything in this Agreement to the contrary, in the event that Seller is not able
(due to force majeure, lack of capacity, or otherwise) to manufacture sufficient
Product to fill purchase orders from its wholesale distributors, Buyer and
others, Seller shall have the right to first fill the purchase orders of its
wholesale distributors and any Product remaining thereafter will be divided pro
rata (based on average monthly purchases during the prior six month period)
among Buyer and Seller's other customers based upon binding orders for Product
that Seller has, at that time, received. Seller shall have no liability or
obligation to Buyer in the event that Seller is unable to fill Buyer's purchase
orders as requested by Buyer.
7. Inspection and Acceptance. Upon receipt by Buyer of a shipment of
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Product, Buyer shall have the right, at its sole cost and expense, to inspect
each Product shipped (pursuant only to the tests and in accordance with the
inspection parameters set forth in Schedule 7 attached hereto) in order to
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determine whether the Product complies with the Specifications. If Buyer's
inspection indicates that the Product fails to comply with the Specifications,
then Buyer shall
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immediately provide Seller with notice ("Rejection Notice") of such together
with a written explanation of the reason(s) for such failure. Upon receipt of
the Rejection Notice, Seller shall have thirty (30) days to conduct its own
inspection of the Product and if Seller's testing confirms that the Product
fails to conform to the Specifications, then Buyer's sole remedy shall be for
Seller, at Seller's sole discretion, to either deliver new Product to Buyer, or
issue a credit or refund for the Buyer's Price of such rejected Product together
with reimbursement of actual shipping costs to and from Buyer. Any such Product
which Seller confirms does not comply with the Specifications shall be returned
to Seller. If Seller's testing indicates that the Product does comply with the
Specifications, then Buyer will accept and pay for the Product subject to its
dispute resolution rights set forth in Section 15 of this Agreement. For
purposes of this Agreement, Buyer shall be deemed to have accepted all Product
shipped which is not affirmatively rejected by Buyer by means of a Rejection
Notice to Seller within twenty (20) working days of receipt of such Product.
8. Covenants and Warranties. (a) Seller warrants that it has the right to
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sell the Product and that the Product, when sold by Seller, will be free and
clear from all liens and encumbrances. Seller warrants that the Product will
meet the agreed Specifications and will be free from defects in material and
workmanship at the time of shipment from Seller's facility. Seller further
warrants that the manufacture of the Product will be in conformity with cGMP's
for biologicals, and that no Product delivered by Seller under this Agreement
will be adulterated or misbranded within the meaning of the United States Food,
Drug and Cosmetic Act. No substitution of Product may be made by Seller without
the express prior written consent of Buyer. Seller's sole responsibility for its
breach of any representation or warranty hereunder will be to replace the
Product or issue a full credit or refund respecting any Product failing to meet
this warranty, and Seller shall not be responsible for any special, exemplary,
indirect, incidental or consequential damages arising from its breach of said
warranty. THE FOREGOING SHALL BE THE SOLE AND EXCLUSIVE REMEDY WHETHER IN
CONTRACT, TORT OR OTHERWISE. THERE ARE NO WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING THE WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
EXCEPT AS SPECIFICALLY SET FORTH IN THIS SECTION 8.
(b) During the Term of this Agreement, Buyer shall maintain
product liability insurance covering the use of Buyer's Device in the minimum
amount of + and with an insurance company reasonably acceptable to Seller.
Seller shall be named as an additional insured on said insurance policies and
Buyer shall provide Seller with a certificate of insurance evidencing such
coverage. Buyer covenants and agrees (i) not to alter or manipulate the Product
in any way, (ii) not to adulterate or misbrand the Product within the meaning of
the United States Food, Drug and Cosmetic Act, and (iii) to comply with all
foreign, Federal, state and local laws, statutes, rules, regulations and
ordinances of any kind as the same may affect Buyer's use, storage, handling,
distribution or sale of the Product.
+ Denotes confidential information that has been omitted and filed
separately, accompanied by a confidential treatment request, with the Securities
and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
Amended.
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9. Indemnification.
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(a) Buyer's Indemnification. Buyer acknowledges that Seller
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will have no control over the uses to which the Product will be devoted with
Buyer's Device, or over the circumstances of the Product's use, storage,
handling, distribution or application after shipment from Seller's facility. As
such, Buyer will assume full responsibility with respect to the uses to which
the Product will be devoted with Buyer's Device and with respect to the use,
storage, handling, distribution or application of the Product after shipment
from Seller's facility, and it is mutually agreed that Seller assumes no
liabilities of any kind with respect to the use by Buyer or by any third party
of the Product in or with the Buyer's Device or with respect to the use,
storage, handling, distribution or application of the Product after shipment
from Seller's facility. Buyer agrees to indemnify, defend and hold harmless
Seller, its successors, assigns, directors, officers, agents and employees, from
and against any and all claims, losses, damages, liabilities, fines, penalties,
costs and expenses, including without limitation, court costs and reasonable
attorneys' fees (collectively, "Losses"), resulting from or arising out of (i)
claims that Buyer's Device infringes on the patents, trade secrets or other
intellectual property rights of others, (ii) any governmental or other
regulatory actions (including without limitation, notification requirements and
recalls) which are required with respect to the sale of the Product by Buyer
outside of the United States, (iii) any violation(s) by Buyer of this Agreement
or Buyer's covenants hereunder, or (iv) the use of the Product with Buyer's
Device, or the design, manufacture, marketing, sale or use by Buyer of any
vascular sealing device incorporating the Product, unless such Losses are the
direct result of the Product failing to meet the agreed Specifications set forth
herein at the time of shipment from Seller's facility.
(b) Seller's Indemnification. Seller agrees to indemnify,
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defend and hold harmless Buyer, its successors, assigns, directors, officers,
agents and employees, from and against any and all Losses resulting from or
arising out of (i) the failure of the Product to meet the agreed Specifications
at the time of shipment from Seller's facility, or (ii) a valid claim that the
Product as shipped to Buyer infringes the patent, trade secrets or other
intellectual property of any third party.
(c) Indemnification Procedures. Promptly after receipt by a
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party hereto of notice of any claim which could give rise to a right to
indemnification pursuant to this Section 9, such party (the "Indemnified Party")
shall give the other party (the "Indemnifying Party") written notice describing
the claim in reasonable detail. The failure of an Indemnified Party to give
notice in the manner provided herein shall not relieve the Indemnifying Party of
its obligations under this Section, except to the extent that such failure to
give notice materially prejudices the Indemnifying Party's ability to defend
such claim. The Indemnifying Party shall have the right, at its option, to
compromise or defend, at its own expense and by its own counsel, any such matter
involving the asserted liability of the party seeking such indemnification. If
the Indemnifying Party undertakes to compromise or defend any such asserted
liability, it shall promptly (and in any event not more than ten (10) days after
receipt of the Indemnified Party's original notice)
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notify the Indemnified Party in writing of its intention to do so, and the
Indemnified Party shall cooperate fully with the Indemnifying Party and its
counsel in the compromise of or defense against any such asserted liability. All
reasonable costs and expenses incurred in connection with such cooperation shall
be borne by the Indemnifying Party. If the Indemnifying Party elects not to
compromise or defend the asserted liability, fails to notify the Indemnified
Party of its election to compromise or defend as herein provided, fails to admit
its obligation to indemnify under this Agreement with respect to the claim, or
if the claim could result in the Indemnified Party becoming subject to
injunctive relief or relief other than the payment of money damages that could
materially adversely affect the ongoing business of the Indemnified Party in any
manner, the Indemnified Party shall have the right, at its option, to pay,
compromise or defend, by its own counsel, such asserted liability. The
Indemnifying Party shall have the right to compromise any claim with respect to
which it takes responsibility provided that such settlement or compromise does
not involve an admission of liability on behalf of the Indemnified Party, does
not require the Indemnified Party to take any action or refrain from taking any
action, and prior to any such settlement or compromise the Indemnifying Party
gives the Indemnified Party at least fifteen (15) days prior notice of its
intent to settle or compromise a claim and further affords the Indemnified Party
an opportunity to provide input to the settlement or compromise. The Indemnified
Party may not settle or compromise any claim over the objection of the
Indemnifying Party; provided, however, that consent to settlement or compromise
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shall not be unreasonably withheld. In any event, the Indemnified Party and the
Indemnifying Party may participate, at their own expense, in the defense of such
asserted liability. If the Indemnifying Party chooses to defend any claim, the
Indemnified Party shall make available to the Indemnifying Party, subject to
such reasonable confidentiality provisions as the Indemnified Party may impose,
any books, records or other documents within its control that are necessary or
appropriate for such defense. Notwithstanding anything to the contrary in this
Section 9(c), (i) the party conducting the defense of a claim shall (A) keep the
other party informed on a reasonable and timely basis as to the status of the
defense of such claim (but only to the extent such other party is not
participating jointly in the defense of such claim), and (B) conduct the defense
of such claim in a prudent manner, and (ii) the Indemnifying Party shall not
cease to defend, settle or otherwise dispose of any claim without the prior
written consent of the Indemnified Party (which consent shall not be
unreasonably withheld).
(d) Survival. The provisions of Section 9 shall survive any
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termination of this Agreement. Each Indemnified Party's rights under Section 9
shall not be deemed to have been waived or otherwise affected by such
Indemnified Party's waiver of the breach of any representation, warranty,
agreement or covenant contained in or made pursuant to this Agreement, unless
such waiver expressly and in writing also waives any or all of the Indemnified
Party's rights under Section 9.
(e) Limitation of Liability. Notwithstanding anything in this
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Agreement to the contrary, but subject to the last sentence of this paragraph
(e), (i) Seller shall not be responsible for any special, exemplary, indirect,
incidental or consequential damages sustained or incurred by Buyer as a result
of Seller's breach of any of the provisions of this Agreement, and (ii) Buyer
shall not be responsible for any special, exemplary, indirect, incidental or
consequential damages
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sustained or incurred by Seller as a result of Buyer's breach of any of the
provisions of this Agreement. The provisions of this paragraph (e) shall not in
any way limit either party's indemnification obligations pursuant to paragraphs
(a) or (b) of this Section 9 with respect to claims by third parties against
either Buyer or Seller respectively for damages of any kind incurred by said
third parties.
10. Term of Agreement. (a) The term of this Agreement ("Term") shall
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commence on the date hereof and continue until terminated (i) as set forth in
Section 13 of this Agreement, or (ii) by Buyer, effective any time after giving
Seller at least 4 months prior written notice, or (iii) by Seller, effective any
time after September 1, 2004, by giving Buyer at least 24 months prior written
notice.
(b) Termination of this Agreement for any reason shall not
relieve the parties of any obligation accruing prior thereto and shall be
without prejudice to the rights and remedies of either party with respect to any
breach of the provisions of this Agreement. Without limiting the generality of
the foregoing and except as otherwise provided herein, no termination of this
Agreement, whether by lapse of time or otherwise, shall serve to terminate the
obligations of the parties hereto under Sections 9, 11,14 or 15.
(c) On the termination of this Agreement, Buyer shall return to
Seller all information which it possesses or controls that belongs to Seller. In
addition, Buyer shall be required to purchase from Seller, at Seller's cost
therefor, any and all supplies and other components of Seller which are specific
to the Product purchased or to be purchased by Buyer pursuant to this Agreement.
11. Confidentiality. Buyer covenants and agrees not to (i) divulge,
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disclose or disseminate any Confidential Information (as hereafter defined) of
Seller or any information pertaining to this Agreement, or (ii) use any of
Seller's Confidential Information except as contemplated by this Agreement. For
purposes hereof, "Confidential Information" means any information disclosed by
Seller or of which Buyer becomes aware (whether in writing or orally or by
sensory detection) with respect to the manufacture or sale of the Product unless
such information (x) was known to Buyer prior to disclosure thereof by Seller,
(y) is or becomes generally available to the public through no fault of Buyer,
or (z) is required to be disclosed by law or court order, provided that Seller
is given at least 10 days notice prior to any disclosure required by law or
pursuant to court order. Buyer and Seller have executed a separate
confidentiality agreement governing the use of confidential information during
the Term of this Agreement and thereafter.
12. Use of Trademark. Buyer shall have the right to utilize the Trademark
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in its product descriptions, sales literature, labels, brochures, advertisements
and other descriptions (collectively, the "Marketing Materials") of the Product,
subject to Seller's prior written approval which shall not be unreasonably
withheld. Prior to utilizing the Trademark, Buyer shall provide Seller with
copies of all Marketing Materials for Seller's review and approval. Buyer shall
not
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use the name "GenTrac" or any variation thereof without Seller's prior written
approval.
13. Termination. Either party may terminate this Agreement immediately and
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cancel any purchase orders hereunder if the other party (a) assigns this
Agreement or any of its rights hereunder in violation of the terms of this
Agreement and without the prior written consent of the other party, (b) makes an
assignment for the benefit of creditors, or a receiver, trustee in bankruptcy or
similar officer is appointed to take charge of all or part of its property, (c)
is adjudged a bankrupt, (d) breaches any term of this Agreement (other than a
payment term by Buyer) and such breach is not remedied within thirty (30) days
after written notice thereof has been given to the breaching party, (e) fails to
meet its obligation to pay for any Product shipped and invoiced within five
business days of the receipt of notice by Buyer from Seller of non-payment (or
within five business days of the due date for such payment without notice if the
Seller has supplied notice of non-payment to Buyer on two prior occasions within
the prior 12 month period), or (f) is unable to perform due to force majeure as
set forth in Section 14 hereof. Any such termination shall not release Seller or
Buyer from obligations arising under this Agreement prior to the effective date
of termination. In addition, any such termination shall be subject to the
provisions of paragraphs (b) and (c) of Section 10 of this Agreement.
14. Force Majeure. Neither party hereto shall be considered in default in
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performance of its obligations hereunder if performance of such obligations is
prevented or delayed by reason of force majeure, including by way of example and
not by way of limitation, acts of God, acts or omissions of government agencies
or instrumentalities (including without limitation, CBER and the FDA), lack of
building or equipment capacity, fire, flood, explosion, storm, strike, lockout
or other labor disputes, riot, war, rebellion, accident, failure or delay of
transportation, or by vendors or subcontractors, failure of suppliers or
shortage of raw materials or labor, failure of equipment, or any other similar
cause or causes beyond its reasonable control. Time of performance of either
party's obligations hereunder shall be extended by the time period reasonably
necessary to overcome the effects of such force majeure occurrences; provided,
however, if either party is unable to perform its obligations under this
Agreement due to reason of force majeure as herein set force for a period of 6
consecutive months, then either party may terminate this Agreement by giving
notice to the other party within 30 days after the end of said 6 month period.
15. Dispute Resolution.
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(a) Negotiation. The parties agree to consult and negotiate in
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good faith to try to resolve any dispute, controversy or claim that arises out
of or relates to this Agreement. The parties agree that, except as provided in
Section 15(b), neither party will initiate formal dispute resolution under this
Agreement unless and until such party has provided written notice of the
potential claim to the other party and the representatives of the parties shall
have met in person to attempt to achieve such an amicable resolution of such
situation; provided, however, that in no event shall a party be required to
delay initiation of formal dispute resolution hereunder for more than a period
of 30 days following such notice.
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(b) Reservation for Litigation. Notwithstanding Sections 15(a) and
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15(c), each party expressly reserves the right to seek judicial or equitable
relief (including, without limitation, any injunction or other preliminary
relief ) from a court of competent jurisdiction if the other party is or appears
to be in violation of such other party's obligations under this Agreement,
including without limitation, those pertaining to non-use and non-disclosure
under the provisions of Section 11 hereof. Nothing in this Section 15(b) shall
preclude a party from seeking such interim relief with respect to any disputes
of claims arising under this Agreement as may be available under the AAA rules
as provided in Section 15(c).
(c) Arbitration. Subject to the reservation of the parties under
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Section 15(b), all disputes, claims or controversies arising out of or in
connection with this Agreement shall be finally settled under then current
commercial arbitration rules of the American Arbitration Association ("AAA"), as
modified by Section 15(d) below. Judgment upon the award rendered by the
arbitrators may be entered in any court of competent jurisdiction. The place of
arbitration shall be St. Louis, Missouri. The arbitration shall be conducted by
three neutral arbitrators selected by mutual agreement of the parties or, if
that is not possible within 30 days of the initial demand for such arbitration,
by the AAA. At least one arbitrator shall have knowledge or experience in the
medical device industry and at least one arbitrator shall have knowledge or
experience in the pharmaceutical or biological industry.
(d) Special Rules. Notwithstanding any provision to the contrary in
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the AAA rules, the parties hereby stipulate that any arbitration hereunder shall
be subject to the following special rules.
(i) Each party shall have the right to request from the
arbitrators, and the arbitrators shall order upon good cause shown,
reasonable and limited pre-hearing discovery, including (1) exchange
of witness lists, (2) depositions under oath of named witnesses, (3)
written interrogatories, and (4) document requests;
(ii) Upon conclusion of the pre-hearing discovery, the
arbitrators shall promptly hold a hearing upon the evidence to be
presented by the parties and shall promptly render a written opinion
and award;
(iii) The arbitrators may not award or assess punitive
damages against either party; and
(iv) Each party shall bear its own costs and expenses of
the arbitration and one-half (1/2) of the fees and costs of the
arbitrators, subject to the power of the arbitrators, in their sole
discretion, to award all such reasonable costs, expenses and fees to
the prevailing party.
(e) Survival. The duty of the parties to arbitrate any dispute,
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controversy or claim under this Section 15 shall survive the termination of this
Agreements for any reason.
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16. Entire Agreement. This Agreement and the Schedules attached hereto
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set forth the entire and only agreement between Buyer and Seller concerning the
subject matter hereof and supercedes all prior written or oral agreements. No
provision of this Agreement can be modified or amended except by an explicit
written amendment signed by both Buyer and Seller.
17. Assignment. Neither party will have the right to voluntarily or
----------
involuntarily assign this Agreement, in whole or in part, to any third party
without the prior written consent of a duly authorized officer of the other
party, which consent shall not be unreasonably withheld. Notwithstanding the
foregoing, (i) either party may freely assign this Agreement to any company
controlling, controlled by or under common control with that party or succeeding
to the entire business of the party, (ii) Seller may assign this Agreement
incident to the sale or transfer of all or substantially all of its thrombin
business or assets, and (iii) either party may freely assign this Agreement
incident to the merger or reorganization of said party. This Agreement will be
binding upon and inure to the benefit of the parties and their successors and
permitted assigns.
18. General.
-------
(a) Waivers. No waiver of any right or remedy hereunder will
-------
be effective unless based upon a writing signed by the party against whom it is
sought to be enforced. No delay on the part of either party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of either party of any right, power or privilege
hereunder operate as a waiver of any other right, power or privilege hereunder.
(b) Notices. All notices or other communications required or
-------
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given if delivered by hand, or if mailed, three (3)
days after mailing first class, postage prepaid, by registered or certified
mail, return receipt requested, addressed to the attention of (i) the Chief
Executive Officer of Buyer, or (ii) Xx. Xxxx Xxxxx of Seller (with a copy to Xx.
Xxxxxxx X. Xxxxxxxxx at Xxxxx Pharma Incorporated, 0000 Xxxxx Xxxx, Xx. Xxxxx,
XX 63146) at the respective addresses first written above, or to such other
person(s) or address(es) as may be given by notice as herein set forth.
(c) Relationship. The parties are independent contractors and
------------
shall not be deemed to have formed any partnership, joint venture or other
relationship. Neither party shall make, or represent to any other person that it
has the power or authority to make, any financial or other commitment on behalf
of the other party.
(d) Severability. If any provision of this Agreement is
------------
declared invalid or unenforceable by a court of competent jurisdiction, such
provision will be severed from this Agreement and the remaining provisions will
be unaffected thereby. The parties will promptly meet and negotiate a substitute
provision meeting as closely as possible the intent of the invalid or
unenforceable provision and, with reasonable precision, avoiding the defects of
the original provision.
11
(e) Governing Law. This Agreement has been entered into under
-------------
the laws of the State of Missouri and will be governed by and construed in
accordance with those laws as they apply to contracts entered into and carried
out solely within the State of Missouri.
(f) Exclusiveness of Remedies. Subject to the terms of this
-------------------------
Agreement, all rights accorded either of the parties hereunder shall be
cumulative of all other rights so granted as well as any rights and remedies
either of them may have at law or in equity.
(g) Headings. The Section headings in this Agreement are for
--------
convenience only and shall not affect the construction hereof.
(h) Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of which shall be deemed an original but all of which
together shall constitute a single instrument.
(i) Legal Fees. Subject to the provisions of Section 15(d) with
----------
respect to arbitration, the prevailing party in any legal action shall have the
right, in addition to all other rights and remedies, to recover all legal fees
and costs incurred in pursuing its rights and remedies hereunder.
(j) No Third-Party Rights. No provision of this Agreement shall
---------------------
be deemed or construed in any way to result in the creation of any right or
obligation in any person or entity not a party to this Agreement.
(k) Schedules. The Schedules are by this reference incorporated
---------
in and made a part of this Agreement.
[The remainder of this page intentionally left blank; signature page to follow.]
12
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
representatives to execute this Agreement as of the day and year first written
above.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE
ENFORCED BY THE PARTIES.
VASCULAR SOLUTIONS, INC. GENTRAC, INC.
By: /s/ Xxxxxx X. Xxxx By: /s/ Xxxxxx X. Xxxxx
-------------------------- -------------------
Name: Xxxxxx X. Xxxx Name: Xxxxxx X. Xxxxx
----------------------- -------------------
Title: CEO Title: President
----------------------- -------------------
13
Schedule 1 - Specifications
Each Product to consist of one vial of Thrombin, Topical (Bovine Origin), U.S.P.
(Thrombin - JMI), in either the 5,000 unit or 10,000 unit size, as specified in
the purchase order, together with the package insert. The vials shall be
packaged in bulk 25s for shipment to Buyer via common carrier. The Product shall
conform to the specifications for Seller's commercially available thrombin under
the following product codes:
----------------------------------------------------------------------
Product Description NDC Number
----------------------------------------------------------------------
Thrombin - JMI 00000-000-00
5,000 unit
----------------------------------------------------------------------
Thrombin - JMI 00000-000-00
10,000 unit
----------------------------------------------------------------------
Each lot shipped to Buyer shall be accompanied by a certificate of analysis
certifying compliance with U.S. License #977 and Seller's accepted release
criteria for the Product.
Schedule 2 - Prices
The initial price for the Product shall be as follows:
----------------------------------------------------------------------
Product Description NDC Number Price/Bulk 25s
----------------------------------------------------------------------
Thrombin - JMI 00000-000-00 +
5,000 unit
----------------------------------------------------------------------
Thrombin - JMI 00000-000-00 +
10,000 unit
----------------------------------------------------------------------
Price increases shall be determined according to the provisions set forth in
Section 3 of this Agreement.
+ Denotes confidential information that has been omitted and filed separately,
accompanied by a confidential treatment request, with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
Amended.
Schedule 3
CONTRACT MANUFACTURING AGREEMENT
This agreement is intended to define the responsibilities mutually agreed to by
GenTrac, Inc., 0000 Xxxxxxxxx Xxxx, Xxxxxxxxx, XX 00000 ("GenTrac") and Vascular
Solutions, Inc., 0000 Xxxxxx Xxxx Xxxxx, Xxxxxxxxxxx, XX 00000 ("Vascular
Solutions"), regarding the manufacture of topical thrombin, Thrombin-JMI(R).
1. GenTrac agrees to manufacture Thrombin-JMI(R) in compliance with US
License #977 and applicable cGMPs.
2. All distribution of Thrombin-JMI(R) will be performed by GenTrac,
Middleton, WI, in compliance with agreements between Vascular
Solutions and GenTrac.
3. GenTrac will notify Vascular Solutions in writing of important
proposed changes made to the manufacturing process, facilities or
source of animal origin raw materials which may have an impact on the
final product purchased by Vascular Solutions.
4. GenTrac will allow GMP audits to be performed by approved
representatives of Vascular Solutions. Specific information regarding
the process for the harvesting, activation and purification of the
thrombin are not included in the scope of the audit.
5. Inquires as to the specific details of manufacture or for technical
information regarding Thrombin-JMI(R) shall be directed to Vice
President of Quality Assurance or Senior Vice President of Scientific
Affairs of GenTrac.
6. Vascular Solutions agrees to handle, store and distribute the
Thrombin-JMI(R) in a manner consistent with the conditions stated on
the product labeling and the conditions stated in Vascular Solution's
submission(s) to the Food and Drug Administration and/or foreign
regulatory agency.
7. This agreement was entered into on effective _______________, _____.
Accepted: Accepted:
Name:____________________________ Name:______________________________
Title:___________________________ Title:_____________________________
GenTrac, Inc. Vascular Solutions, Inc.
0000 Xxxxxxxxx Xxxx 0000 Xxxxxx Xxxx Xxxxx
Xxxxxxxxx, XX 00000 Xxxxxxxxxxx, XX 00000
Schedule 4 - Product Batch Sizes
----------------------------------------------------------------------
Product Description NDC Number Batch Sizes*
----------------------------------------------------------------------
Thrombin - JMI 00000-000-00 +
5,000 unit
----------------------------------------------------------------------
Thrombin - JMI 00000-000-00 +
10,000 unit
----------------------------------------------------------------------
* Batch sizes may vary by 10% based on the yield of each batch.
+ Denotes confidential information that has been omitted and filed separately,
accompanied by a confidential treatment request, with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
Amended.
Schedule 5 - Forecasts
Third Party Forecast
For Finished Product Manufactured Forecast by ________________________
Date [__________________________]
To: ____________________________ From: ____________________
Phone: ____________________________ Company: ____________________
FAX: ____________________________ Phone: ____________________
Address: ____________________________
____________________________
____________________________
Product Title: [___________]
Item Code: [___________]
Current Calendar Forecaster PO Due Date/
Years and Next Quantity PO Qty PO# Comments
by Month
--------------------------- -----------------------------------------------
1 June
--------------------------- -----------------------------------------------
2 July
--------------------------- -----------------------------------------------
3 Aug.
--------------------------- -----------------------------------------------
4 Sept.
-----------------------------------------------------------------------------------------------
5 Oct.
------------------------------------------------
6 Nov.
------------------------------------------------
7 Dec.
------------------------------------------------
8 Jan.
------------------------------------------------
9 Feb.
------------------------------------------------
10 Mar.
------------------------------------------------
11 Apr.
------------------------------------------------
12 May
------------------------------------------------
13 June
------------------------------------------------
14 July
------------------------------------------------
15 Aug.
------------------------------------------------
16 Sept.
------------------------------------------------
17 Oct.
------------------------------------------------
18 Nov.
------------------------------------------------
19 Dec.
------------------------------------------------
20 Jan.
------------------------------------------------
21 Feb.
------------------------------------------------
22 Mar.
------------------------------------------------
23 Apr.
------------------------------------------------
------------------------------------------------
24 May
------------------------------------------------
Schedule 6 - Minimum Requirements
----------------------------------------------------------------------
Contract Year Minimum Requirements*
----------------------------------------------------------------------
Sept. 1, 1999 - August 31, 2000 +
----------------------------------------------------------------------
Sept. 1, 2000 - August 31, 2001 +
----------------------------------------------------------------------
Sept. 1, 2001 - August 31, 2002 +
----------------------------------------------------------------------
Sept. 1, 2002 - August 31, 2003 +
----------------------------------------------------------------------
Sept. 1, 2003 - August 31, 2004 +
----------------------------------------------------------------------
*Minimum Requirements increase by + per year after the fifth
Contract Year if the Agreement is still in effect, unless otherwise provided by
Seller.
*Minimum Requirements apply to any mixture of Products, that is, the 5,000
unit or 10,000 unit size, provided that all orders are for full batch sizes for
the applicable Product.
*Orders may be shipped in partial amounts and are counted against the
Minimum Requirements on the date of shipment.
+ Denotes confidential information that has been omitted and filed separately,
accompanied by a confidential treatment request, with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
Amended.
Schedule 7 - Tests and Inspection Parameters
--------------------------------------------
--------------------------------------------------------------------------------
Specification
--------------------------------------------------------------------------------
5,000 Units 10,000 Units
--------------------------------------------------------------------------------
Thrombin Activity, U.S. Units/vial + +
--------------------------------------------------------------------------------
PH - reconstituted with isotonic saline + +
--------------------------------------------------------------------------------
Moisture + +
--------------------------------------------------------------------------------
Sterility + +
--------------------------------------------------------------------------------
General animal safety per 21 CFR 610.11 + +
--------------------------------------------------------------------------------
Osmolarity* + +
--------------------------------------------------------------------------------
*When reconstituted in + of Buyer's diluent, with such test to be
performed and accepted by Buyer prior to Seller's shipment of the Product.
All lots to include a Certificate of Analysis from Seller in the form attached
hereto, including the statement "bovine plasma and lungs used to manufacture
Thrombin-JMI(R) are taken from BSE-free animals of U.S. origin."
+ Denotes confidential information that has been omitted and filed separately,
accompanied by a confidential treatment request, with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
Amended.
"SAMPLE"
CERTIFICATE OF ANALYSIS
Thrombin, Topical (Bovine) USP
THROMBIN-JMI(R)
Lot:
Date of Manufacture:
Thrombin Activity, U.S. Units/vial +
pH - reconstituted with isotonic saline +
Moisture +
Sterility +
General Animal Safety per 21CFR610.11 +
This lot was manufactured in compliance with cGMPs following the procedures
and specifications approved in U.S. License #977. The bovine plasma
and lungs used to manufacture Thrombin-JMI(R) are taken from BSE-free
animals of U.S. origin. Bovine plasma and lungs used to manufacture
this lot of Thrombin-JMI(R) are derived from inspected animals, which
are fit for human consumption and meet all required USDA
specifications.
___________________________________________
Quality Assurance
GenTrac, Inc.
The data contained in this certificate of analysis is representative of the
batch at the time of manufacture. Certificates of Analysis are authorized to
clients on a confidential basis. No reference to the data contained in the
Certificate of Analysis may be made public without our written authorization.
+ Denotes confidential information that has been omitted and filed separately,
accompanied by a confidential treatment request, with the Securities and
Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as
amended.
GenTrac, Inc. is a subsidiary of XXXXX PHARMA INCORPORATED, St. Louis, MO.
Thrombin-JMI is a trademark of XXXXX PHARMA INCORPORATED.
