EXHIBIT 10.3
AMENDED AND RESTATED MANUFACTURING AGREEMENT
THIS AMENDED AND RESTATED MANUFACTURING AGREEMENT (this "Agreement") is
made and entered into this 10th day of February 2005 by and among ADM Tronics
Unlimited, Inc., a Delaware corporation ("ADM"), Sonotron Medical Systems, Inc.,
a Delaware corporation ("SMS"), and Ivivi Technlogies, Inc., a New Jersey
corporation ("IVIVI" and together with SMS, the "Subsidiaries"), all of the
foregoing corporations with a principal place of business at 000 Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxxxx 00000.
WITNESSETH
WHEREAS, ADM, SMS, IVIVI and Vet-Sonotron Systems, Inc., a Delaware
corporation ("VET"), entered into a manufacturing agreement, dated as of August
15, 2001 (the "Existing Manufacturing Agreement"), pursuant to which ADM, a
Registered Medical Device Manufacturing Facility, as such term is defined
pursuant to the U.S. Food and Drug Administration ("FDA") medical device
regulations, manufactures electronic and other medical and non-medical devices
and products for the Subsidiaries;
WHEREAS, in April 2003, the operations of VET were transferred from ADM
to IVIVI;
WHEREAS, ADM and the Subsidiaries desire to amend and restate the
Existing Manufacturing Agreement to, among other things, (i) provide each
Subsidiary with protection of its proprietary and confidential information and
(ii) provide each Subsidiary with the right to engage third-party manufacturers
to manufacture any or all of its products in the event ADM is unable to perform,
or otherwise in breach of any of, its obligations under this Agreement; and
WHEREAS, the Subsidiaries desire to have ADM continue to provide
manufacturing and regulatory services to the Subsidiaries and ADM desires to
continue to provide such services to the Subsidiaries on terms and conditions as
herein contained.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration the receipt and sufficiency is
hereby acknowledged, the parties hereto agree as follows:
1. ADM shall be the exclusive manufacturer of all current and future
medical, non-medical and veterinary electronic and other devices or products to
be sold, rented or leased by the Subsidiaries (referred to herein as the
"Products") under the terms and conditions herein contained.
2. ADM will manufacture the Products for the Subsidiaries to
appropriate standards and quality commensurate with the type of product and
intended use, it being understood by the parties hereto that this will include
Good Manufacturing Practices ("GMP") and Quality Service Requirements ("QSR")
consistent with FDA regulations.
3. ADM shall invoice the Subsidiaries for any of the Products
manufactured at an amount equal to the Direct Cost plus 20%. It being understood
by the parties hereto that Direct Cost shall be defined and determined as the
actual, invoiced cost for all raw materials, parts, components or other physical
items that are incorporated into or consumed in the manufacture of the Products
plus a direct labor charge equal to the number of hours or portions of hours
required to produce the Products multiplied by the standard hourly manufacturing
labor rate of ADM. Direct Cost shall not include an allocation for overhead,
insurance, administration, rent or other expenses not directly related to the
manufacture of the Products.
4. Each Subsidiary shall purchase and provide ADM with the raw
materials, parts, components or other items that may be required for ADM to
manufacture such Subsidiary's Products.
5. All invoices from ADM to the Subsidiaries shall be immediately due
and payable upon completion of manufacture of the Products and shall be paid by
the Subsidiaries to ADM in U.S. funds by check, wire transfer or other means
acceptable to ADM. All invoices shall include a price per unit (such price to be
the Direct Cost plus 20%) multiplied by the number of units manufactured.
6. Any invoice not paid within 10 days of its due date shall accrue
interest at the rate of 1% per month for any month or portion of a month during
which time such invoice remains unpaid, it being understood by the parties
hereto that time is of the essence.
7. In accordance with FDA regulations for medical device manufacture,
ADM shall maintain Device History Records (within the meaning of the FDA
regulations) for any of the Products manufactured based upon serial numbers
however it will not be responsible for Device Master Records and Device Design
Files (each, within the meaning of the FDA regulations), such being the
responsibility and expense of the Subsidiaries.
8. ADM warrants the Products against defects in material and
workmanship for a period of 90 days after the completion of manufacture. After
such 90-day period, ADM will provide repair services for the Products to the
Subsidiaries at its customary hourly repair rate plus the cost of any parts,
components or items necessary to repair the Products. The Subsidiaries shall pay
any repair invoices to ADM under the same terms as contained in Sections 5 and 6
herein.
9. As between each of the Subsidiaries on the one hand and ADM on the
other hand, each Subsidiary is the sole and exclusive owner of all inventions,
patents, patent applications, copyrights, trade secrets, know-how, proprietary
information and other intellectual property rights relating to the Products of
such Subsidiary or any improvements thereto (the "Product IP"), whether existing
prior to or after the date hereof and regardless of the party responsible for
creating, conceiving or reducing to practice such Product IP. To the extent any
intellectual property rights that are included in the Product IP would otherwise
vest in ADM or any of its employees or subcontractors, ADM hereby assigns to the
applicable Subsidiary all right, title and interest in and to such intellectual
property rights, and agrees to execute, acknowledge and deliver to such
Subsidiary, and to cause its employees and subcontractors to execute,
acknowledge and deliver to such Subsidiary, any further assignments and other
documents that such Subsidiary reasonably deems necessary or desirable to
perfect or further evidence such assignment. ADM agrees to reasonably cooperate
with such Subsidiary, or any person to whom such Subsidiary may have assigned
such intellectual property rights, in securing for such Subsidiary or such
assignee any patents or other intellectual property protections which such
Subsidiary or assignee may seek anywhere in the world to obtain in connection
therewith, and ADM shall, and shall cause persons employed by or otherwise
engaged by ADM, to execute, acknowledge and deliver to such Subsidiary or such
Subsidiary's assignee all instruments which such Subsidiary shall reasonably
require, give evidence and do all things which are necessary or desirable to
enable such Subsidiary or its assignee to file and prosecute applications for,
and to acquire, maintain and enforce, all such patents and other intellectual
property protections. The provisions of this Section 9 shall survive any
termination or expiration of this Agreement.
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10. To the extent ADM, prior to or after the date hereof, has obtained
or obtains access to or knowledge of any non-public information relating to any
Product designs, specifications, components or technologies, or relating to any
other trade secrets, know-how or proprietary information included in the Product
IP (collectively, "Information"), ADM shall maintain such Information as
confidential information of the applicable Subsidiary, using no less than a
reasonable degree of care, and shall not use or disclose any such Information
other than in connection with the performance of its obligations under this
Agreement. Upon request of the applicable Subsidiary, ADM shall return to such
Subsidiary, or destroy and provide such Subsidiary with written certification of
such destruction, all documents, computer files and other materials in ADM's
possession or control, including all copies thereof, that contain or are derived
from any Information of such Subsidiary. The provisions of this Section 10 shall
survive any termination or expiration of this Agreement.
11. Notwithstanding anything contained herein to the contrary, ADM
shall notify each Subsidiary immediately if ADM is, or expects that it will be,
unable to fulfill any of its obligations to such Subsidiary under this Agreement
or is otherwise in breach of any of its obligations to such Subsidiary under
this Agreement. In the event ADM is unable to full, or is otherwise in breach
of, any of its obligations under this Agreement, such Subsidiary shall have the
right, without penalty or prejudice to Subsidiary's other rights hereunder, to
engage a third-party or third-parties to manufacture any or all of such
Subsidiary's Products. In such event, if a Subsidiary elects to exercise its
right to utilize a third-party or third-parties to supplement the manufacture of
its Products pursuant to this Paragraph 10, at such Subsidiary's request, ADM
shall accept delivery of such Products from such third-party or third parties,
finalize the manufacture of such Products to the extent necessary for such
Subsidiary to comply with FDA regulations and ensure that the design, testing,
control, documentation and other quality assurance procedures with respect to
the manufacturing process of such Products have been followed.
12. The Subsidiaries confirm that this Agreement does not infer any
other relationship between ADM and the Subsidiaries and does not obligate ADM to
be responsible for any debts or other liabilities of the Subsidiaries. The
Subsidiaries are separate entities and each is responsible for any liabilities
that may be created.
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13. This Agreement shall be construed and enforced in accordance with
the laws of the State of New Jersey and shall not be modified or terminated
except by a written instrument executed by the parties hereto.
14. This Agreement supercedes any previous agreements, whether written
or oral, between and/or among the parties hereto, and, in particular, the
previous agreement regarding the provision of manufacturing services from ADM to
certain of the Subsidiaries.
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IN WITNESS WHEREOF, the parties to this Agreement have caused
this Agreement to be signed as of the date first above written.
ADM TRONICS UNLIMITED, INC.
By: /s/ Andre' XxXxxx
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Name: Andre' XxXxxx
Title: President
IVIVI TECHNOLOGIES, INC.
By: /s/ Andre' XxXxxx
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Name: Andre' XxXxxx
Title: Chairman and CFO
SONOTRON MEDICAL SYSTEMS, INC.
By: /s/ Andre' XxXxxx
--------------------------
Name: Andre' XxXxxx
Title: President
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