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EXHIBIT 10.45
CONFIDENTIAL TREATMENT REQUESTED
Manufacturing Supply Agreement
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BIOFIELD CORP.
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October 29, 1996
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SUPPLY AGREEMENT
This Agreement and all attachments (called the "Agreement") is made by Biofield
Corp. ("Buyer"), a Delaware corporation with its principal place of business at
0000 Xxxxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000 and SeaMED
Corporation, ("Contractor"), a Washington corporation with its principal place
of business at 00000 XX 00xx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000.
Whereas, Buyer has developed proprietary and patented medical devices for the
diagnosis, screening and monitoring of disease and other medical and biological
conditions through the measurement of voltaic direct current electropotentials.
Whereas, the Contractor has the facilities and expertise to design,
manufacture, test and distribute electronic devices in accordance with current
Good Manufacturing Practices ("cGMP") as promulgated by the United States Food
and Drug Administration ("FDA").
Whereas, Buyer desires to engage the services of Contractor for the production
and ongoing maintenance of the Product as hereinafter defined (and other
related electronic assemblies as may be specified in the future);
In consideration of their mutual promises and covenants, Buyer and Contractor
agree as follows:
I. DEFINITIONS
A. "Product" shall be defined as the Biofield Diagnostic Device
or Biofield Screening Device the functional specifications of
which are attached to this agreement as Attachments A-1 and
A-2. "Product" shall also include modifications that take
advantage of expansion capability within the devices described
in A-1 and A-2 and used in the detection of Breast Cancer.
B. "Qualification Testing" shall be defined as the systematic
process of comparing the actual operation of production units
of the Product to the Buyer's functional and engineering
specifications (Attachment A-3) utilizing the qualification
test plan and procedures mutually agreed to in writing by
Contractor and Buyer.
C. "Verification Testing" shall be defined as the systematic
process of comparing the actual operation of engineering
prototype units of the Product to the functional and
engineering specifications.
D. "Medical Device Reporting ("MDR") shall be defined as any
event associated with the use of the Product which is required
to be reported to the FDA in accordance with 21 CFR Part 803.
E. "Device Master Record" ("DMR") shall be defined as the file
containing all pertinent records relative to design,
specifications, formulations, complete manufacturing
procedures and quality assurance requirements relative to
production of the Product and its subassemblies.
F. "Device History Record" ("DHR") shall be defined as the
compilation of records containing the complete production /
maintenance history of each finished unit of the Product and
showing latest revision history, maintenance history and any
other records required by the FDA.
G. "Certificate of Compliance" shall be defined as Contractor's
notification that appropriate inspection, testing and approval
of the Product (including subassemblies for service) has
materially complied with current cGMP, and other functional
and engineering specifications established by the Buyer. In
addition, the Certificate of Compliance shall state:
"The articles comprising this shipment or other
delivery by SeaMED to, or in the order of, Biofield
Corp., 0000 Xxxxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxx 00000, comply with current cGMPs and
Buyer's functional specifications. Further, SeaMED
warrants that it has taken no action contrary to the
Buyer's formal written direction which of itself
would result
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in adulteration or misbranding of the product within
the meaning of the Federal Food, Drug and Cosmetic
Act."
H. "Buyer's Equipment" shall be defined as capital equipment such
as production molds, fixtures or testing equipment purchased
for and charged to the Buyer specifically to manufacture or
test the Product.
I. "Product Complaint" shall be defined as any written,
electronic, or oral communication that alleges deficiencies
related to the identity, quality, durability, reliability,
safety, effectiveness, or performance of a device.
J. "Pre-production Product" shall be defined as the fabrication
of Products in the manufacturing area under full cGMP control
using pre-production released documentation.
K. "Class III" shall mean the FDA's definition and category for
Class III medical devices.
L. "Non-recurring Engineering" ("NRE") shall be defined as any
engineering work that is requested by the Buyer to perform
specific Buyer specified tasks. A form of agreement for the
costs of such work is annexed hereto as Attachment A-4.
M. Document changes relating to the Product will be made in
accordance with Attachment A-5 (Document Control Agreement).
II. GENERAL TERMS AND CONDITIONS
A. This Agreement is a supply agreement whereby the Buyer agrees
to purchase at least 50% of its worldwide requirements of all
units of the Product, excluding Products manufactured by Asian
headquartered firms and sold to end-users in Asia for the
Purchase Term; it does not obligate Buyer to purchase any
specific quantity but only established the terms and
conditions for such purchases if they occur. All such
quantities will be specified on Buyer's Purchase Orders issued
under the provision of this Agreement and incorporated herein
by reference.
B. If any term of this Agreement conflicts with any term of an
issued Purchase Order, this Agreement shall take precedence.
Any terms or conditions not covered under this Agreement must
be specified on the front of Purchase Orders and must be
mutually agreed to by both the Buyer and Contractor.
C. Buyer may add products to the list of "Products"available for
purchase hereunder by adding such products to a Purchase Order
this is accepted by Contractor. Such added products shall be
deemed "Products" as defined herein as though listed in
Attachment A, at the time of executing this Agreement. The
price for which such added products shall be available for
purchase under this Agreement shall be as stated on such
accepted Purchase Orders(s), subject to the provisions of this
Agreement. The buyer and Contractor shall amend Attachments
to reflect the added Products and relevant pricing.
D. Buyer and Contractor may utilize resources from a third party
engineering services firm when manpower constraints exist or
technical issues require expertise outside the scope of either
party's project team. Contractor will not be required to work
with any third party engineering, manufacturing or consulting
services firm that would be considered to be a direct
competitor in the development or manufacturing of the Product
for buyer. Contractor however agrees to transfer information
which is the property of the Buyer if Buyer so requests it.
E. Payment - Payment for any shipment of Product, if accepted by
Buyer, is due thirty (30) calendar days subsequent to the date
of invoice for such shipment. Unless otherwise specified or
required by law, all prices will be quoted and billed
exclusive of federal, state, or local excise, sales, or other
similar taxes. Such taxes, where applicable, will appear as
additional terms on invoices.
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CONFIDENTIAL TREATMENT REQUESTED
F. Buyer shall supply Contractor with a copy of the sections of the final
PMA submission which directly relate to the manufacturing and labeling
of the Product.
III. PURCHASE ORDERS
A. The term "Purchase Order" shall mean Buyer's written Purchase
Order form and any documents incorporated therein by
reference.
B. Acceptance by Contractor is limited to the provisions of this
Agreement and any Purchase Order. No additional or different
provisions proposed by Buyer shall apply and are hereby
rejected. In addition, the parties agree that this Agreement
and issued Purchase Orders constitute a Contract for the Sale
of Goods and satisfy all statutory and legal formalities of a
contract.
IV. PURCHASE TERM
A. The term during which Buyer may issue Purchase Orders for
Products under this Agreement ("Purchase Term") shall commence
on May 15, 1996 and end on May 15, 2001. During the Purchase
Term, contractor shall have worldwide manufacturing rights,
excluding products manufactured by Asian headquartered firms
and sold to end users in Asia, to manufacture a minimum of 50%
of all units of the Product produced for Buyer during the
Purchase Term, said time period to survive notwithstanding the
sale or licensing of Biofield's technology to a third party.
This Agreement governs Purchase Orders issued by Buyer during
the Purchase Term and any mutually agreed upon extension.
V. MANUFACTURE
A. Contractor shall manufacture and supply to buyer the number of
units of Products ordered pursuant to the Purchase Order in
accordance with Buyer's functional and engineering
specifications as validated by the mutually accepted
qualification test, cGMPs and ISO. Contractor shall provide
to Buyer labels, cartons, and package inserts for each
Product, which items shall comply in all material respects
with all governmental regulations. Contractor shall include a
Certificate of Compliance with each shipment or other delivery
of units of Products.
B. Contractor will not design, develop, manufacture or test
products utilizing either Buyer's patented or proprietary
technology or any closely allied or related technology for the
measurement of voltaic or other electropotentials
differentials or electromagnetic fields in vivo as applied to
cancer diagnosis and screening or the in vivo measurement of
cellular proliferation during the Purchase Term (as defined
above) or for a period of five years after the termination of
the Agreement.
VI. PRODUCT PRICING
A. PREPRODUCTION PRICING will be on a fixed price basis of XXXXX
per Pre-production Product, (excluding the patient cable) with
any savings from economies of scale or cost reductions to
benefit the Contractor. Maximum number of Pre-production
Product at this price will be thirteen (13). If additional
Pre-production Product are ordered pricing will be negotiated.
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CONFIDENTIAL TREATMENT REQUESTED
B. PRODUCTION PRICING
(i) Initial production pricing will be fixed at XXXXX per
unit of Product (excluding patient cable) turnkey,
including all labeling, packaging and manuals, and is
based on a minimum order quantity of fifty (50) units
of Product per Purchase Order. Pricing is based upon
unit of Product configurations A1433 & A1434 as
defined in Buyer's statement of work dated 4/18/96
and including any reasonable changes required due to
qualification testing results or FDA requirements.
This price will be fixed for units of Product ordered
and scheduled for delivery by December 31, 1996. A
sample pricing model to serve as basis for
negotiation is annexed as Attachment 6. After
January 1, 1997 pricing will be reviewed and
negotiated on an annual basis. Reductions in cost
achieved between pricing dates are to be to the
Contractor's benefit. The Buyer is not responsible
for NRE charges unless previously approved by the
Buyer. Sustaining engineering efforts during
production are covered through normal overhead and
burden rates.
(ii) Prices include all charges such as packaging,
packing, and all taxes except sales, use, and other
such taxes imposed upon the sale or transfer of
Product. Buyer shall have no liability for such
taxes if it has complied with statutory resale tax
certificate requirements. If Buyer is liable to pay
these taxes, they shall be specifically listed in
Contractor's invoice.
VII. DELIVERY, LEAD-TIME AND FLEXIBILITY
A. Buyer's Purchase Orders shall state contractor's committed
delivery date for Product. TIME AND RATE OF DELIVERY ARE OF
THE ESSENCE OF ALL PURCHASES MADE UNDER THIS AGREEMENT> The
maximum agreed period between Buyer's issuance of a Purchase
Order and the scheduled delivery date ("Lead-time") shall be
XXXXX, which may be adjusted based upon written notification
of current manufacturing lead times.
B. All shipments shall be F.O.B. Origin, with title passing to
buyer at time of invoicing. Buyer shall select the carrier
and shall pay transportation charges. Invoicing will not
occur until units have passed final acceptance testing, final
quality inspection, and units are packaged and ready for
shipment.
C. Buyer may require that shipments of Product under this
Agreement be shipped by contractor to various destinations.
The Purchase Order issued by the Buyer will clearly specify
the "SHIP TO" location for each Product.
D. Buyer may, increase or decrease the quantity of units of
Product covered by a Purchase Order ("PO") by mutual
agreement, within the following parameters:
0 to 2 Months Firm POs, Schedule unchangeable
3 to 4 Months Firm POs. May move up to 25% of scheduled deliveries on POs
out 30 days without penalty, or in 30 days depending on
material availability and current capacity.
5 to 6 Months Firm POs. May move up to 40% of scheduled deliveries on POs
out 60 days without penalty, or in 45 days depending on
material availability and current capacity.
7 to 12 Months May move up to 50% of scheduled deliveries on POs out 60 days
without penalty, or in 60 days depending on material
availability and current capacity.
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E. Delivery slides initiated by Buyer greater than 60 days will
require an inventory deposit for one hundred percent (100%) of
materials purchased, received and paid for by contractor.
Upon buyer's request, Contractor is to provide a listing of
inventory paid for by contractor. Payment for actual material
purchases paid for by Buyer will be discounted from cost of
units of Product at time of invoicing.
F. EXCESS AND OBSOLETE MATERIALS
(i) Contractor and Buyer will work together to minimize
the impact of excess material of obsolete materials
related to the manufacture of Product. Changes to
the design of the Product by the Buyer may create
obsolete or excess inventory. Prior to implementing
Buyer directed changes, Contractor will identify the
potential impact to production and inventory, and
will communicate the potential cost to the Buyer.
Contractor will advise buyer of the best method to
return materials on order or how to best implement
changes based on dates which such changes become
effective to reduce the impact on Buyer's cost.
Buyer will be responsible for the cost of inventory
that becomes excess or obsolete due to Buyer
initiated changes. Any excess or obsolete
inventories will be charged to the Buyer at
Contractor's cost, but without profit. Disposition
of excess or obsolete materials will be coordinated
with the Buyer to minimize the impact of cost to the
Buyer where possible.
(ii) Any excess or obsolete inventory generated by
Contractor initiated changes will be the sole
responsibility of the Contractor.
G. Upon request from Buyer, Contractor will provide a quarterly
listing by serial number of finished goods inventory on hand
which has been invoiced to the Buyer.
VIII. ACCEPTANCE
A. Acceptance by Buyer of units of Product manufactured and
supplied by Contractor shall be subject to inspection and test
by Buyer. Buyer shall have the right to reject any units of
product within 30 days after delivery upon written notice to
Contractor stating in details the reasons for rejection if the
units of Product fail to conform to the Certificate of
Compliance accompanying the shipment. Upon receipt of the
rejected unit by the Contractor and the previous stated
notice, Contractor shall use its best efforts to replace all
rejected units of Product and to redeliver such units within
30 days. Of the rejected units of product described above,
all shipping costs regarding the replacement of defective
units of Product and their redelivery shall be borne by
Contractor.
B. Buyer shall have the authority to perform reasonable random
quality assurance, fixed assets and cGMP inspections of the
relevant portions of SeaMED'S facility for manufacturing
Products upon twenty-four (24) hours notice. SeaMED shall
fully cooperate with Buyer's inspections. Buyer recognizes
that, due to the nature of SeaMED's business, certain areas of
SeaMED's premises may not be available to Buyer personnel.
These certain areas will not include those important to the
manufacture of the Products for Buyer.
Contractor agrees to advise Buyer promptly of any inspection
specific to Buyer's product received from the FDA or other
regulatory authority. Contractor will permit Buyer's
representatives to attend such inspection if Buyer so
requests, and to provide to buyer, as confidential
information, a copy of any notice of observation that is
provided to Contractor by the investing authority. The
Buyer's access during the inspection as well as information
provided in the notice of observation will be limited to those
areas specific to Buyer's product.
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CONFIDENTIAL TREATMENT REQUESTED
IX. WARRANTY
A. LIMITED WARRANTY
(i) Contractor is a Washington corporation duly
organized, validly existing and in good standing; it
has full power, right and authority to enter into and
perform its obligations under the Agreement,
including the right to manufacture and sell Products
to Buyer; this Agreement has been duly authorized by
all necessary corporate actions and when duly
executed by the appropriate corporate officers of
Contractor will be a valid and binding agreement of
Contractor enforceable in accordance with its terms
except to the extent that such enforceability may be
limited by applicable bankruptcy, insolvency and
other similar laws affecting creditor's right
generally. Products which are rejected for reasons
which are directly related to design performed by a
party other than the Contractor will be the
responsibility of the Buyer. Should there be a
dispute as to design responsibility, a mutually
agreed third party will be used to arbitrate the
dispute on this issue alone.
(ii) Contractor expressly represents and warrants for a
period of XXXXX from the time of invoice or XXXXX
from the time of delivery to the Buyer's customer,
whichever comes first, that all Products upon
delivery to Buyer are in good working order, are free
from defects in materials and workmanship, and
conform to the Buyer's functional and engineering
specifications as validated by the qualification plan
as jointly agreed to by Buyer and Contractor. The
Products are sold and delivered free from any claim,
security interest or other lien or encumbrance. All
warranties contained in this Order shall survive
inspection test, acceptance and payment and will
inure to the benefit of Buyer's customers.
(iii) Contractor warrants it has the right to convey the
Products and that the Products are free of all liens
and encumbrances. These warranties shall survive any
inspection, delivery, payment, and termination of
this Agreement, and shall run to Buyer, its
customers, successors, and assigns.
(iv) Contractors warrants that all Products shall be
produced according to Buyer's functional and
engineering specifications as validated by the
qualification plan jointly agreed to by Buyer and
Contractor, manufactured and assembled in compliance
with all applicable federal and state laws and rules
and regulations, which are material to maintain the
Contractor's ability to deliver product in a cGMP and
ISO environment.
(v) If any units of Product sold and delivered to Buyer
breaches any of the foregoing warranties, Contractor
shall either repair or replace or provide to Buyer
full credit for the purchase price of any unit of
Product which is defective. Contractor shall correct
defects in Product at its facility. At Buyer's
option, Contractor shall complete an assessment of
the returned product, (typically within three (3)
days of receipt), and repair or replace all defective
Product, (typically within fourteen (14) days of
receipt) unless otherwise specified. Turn around
times will vary depending on the complexity of the
defect. Inbound freight will be the responsibility
of Buyer, except as noted in section 8 (A).
Contractor agrees to pay return freight to the
customer and method of shipment will be consistent
with the method of inbound freight to the Contractor
for units covered under warranty.
(vi) The aforementioned warranties do not extend to the
system algorithm, the system patient cable, or the
sensors. The design and responsibility for these
three items rest solely with the Buyer.
B. NON-WARRANTY
Repair services outside the scope of the warranties described
in this Section IX shall be provided by the
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CONFIDENTIAL TREATMENT REQUESTED
Contractor and/or the Buyer pursuant to a Repair and Service
Agreement to be negotiated in good faith by the parties and
signed within a reasonable time following execution of this
Agreement.
C. SUPPLY OF REPLACEMENT PARTS
(i) Contractor agrees to provide Buyer, upon request,
buyer's requirements of replacement parts,
schematics, plans and sources of supply or a designee
of the buyer to: (a) provide non-warranty repair
services to buyer's customers, should Contractor not
provide such repairs, and (b) provide warranty repair
services at authorized third party service centers
world-wide selected by the Buyer with Contractor's
consent, which shall not be unreasonably withheld.
Buyer shall pay for such replacement parts consistent
with Contractor's current spares pricing methodology,
plus freight and shipping charges actually incurred
by the Contractor. The cost of replacement parts
required pursuant to (A) above, including freight and
shipping charges, shall be at the Contractor's
expense as part of it's warranty services. No third
party repairs will occur without mutual consent of
Contractor and Buyer.
(ii) Contractor warrants that for a period of time
beginning on the date of delivery to Buyer or the
Buyer's designee of any replacement parts provided
pursuant to this Section A, Limited Warranty, and
continuing thereafter for XXXXX following delivery of
such replacement parts to the buyer's customer (but
in no event to exceed XXXXX from the date of delivery
of such replacement parts to the Buyer), each such
part shall be in good working order, and conform to
all applicable component of product specifications,
and be delivered free from any claim, security
interest or other lien or encumbrance and all
applicable laws, ordinances, rules, regulations,
orders and standards have been complied with. In the
event any replacement part provided pursuant to this
Section does not conform with the above, the Buyer
or, at the Buyer's option, the Buyer's designee shall
return such replacement part to the Contractor. The
Contractor shall use its best effort to promptly
repair or replace such replacement parts.
Replacement parts verified as defective will be
repaired or replaced without charge. If such parts
are returned within thirty days from time of shipment
the freight cost of the original shipment will be
refunded.
(iii) Contractor shall, on a best efforts basis, attempt to
assure that any and all component materials and parts
for the Products obtained from subcontractors and/or
vendors shall be readily available and shall not
become obsolete and shall remain in production by the
vendor and/or subcontractor for a period of at least
three years from FDA pre-market approval of the
Product. Should Contractor become aware of any
potential obsolescence of a component material or
part which might impact Buyer's FDA pre-market or
market approval of the Product, Contractor will
immediately notify Buyer in writing of the situation
to enable buyer to determine a proper course of
action. Contractor shall monitor the production and
availability of major component materials and parts
of Products to assure that they continue in
production or can be purchased for a period of at
least three years following approval by the FDA for
marketing of commercial units.
X. CONFIDENTIAL INFORMATION
A. During the term of this Agreement and for a period of five
years thereafter, each party shall keep strictly confidential,
and shall not use for any purpose other than the matter
hereof, any and all information and materials received from
the other party which the disclosing party designates in
writing upon or within 30 days after disclosure as
confidential ("Confidential Information and Materials").
Confidential Information and Materials qualifying as trade
secrets and shall be maintained confidential for so long as
information of materials remain trade secrets. There shall
not be considered as Confidential Information and Materials
any information or materials which:
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(i) is or are already part of the public domain at the
time of disclosure under this Agreement or thereafter
becomes or become part of the public domain otherwise
than by breach of this confidential obligation;
(ii) the receiving party can show by competent proof had
already come into its possession without violation of
this Agreement at the time of disclosure under this
Agreement; or
(iii) is communicated by a third party which did not
receive the same directly or indirectly from either
party, or from any other party under a binder of
confidentiality.
B. Each party may disclose Confidential Information or Materials
with the prior written approval of the disclosing party, to
third parties having a valid need to know and who enter into
written confidentiality agreements with the disclosing party
containing restrictions on further disclosure and use no less
stringent that the provisions of this Article X, or as it
deems necessary, This restriction of information does not
apply to the normal disclosure of information that occurs:
(I) during a FDA or ISO inspection / audit;
(ii) in prosecuting or defending litigation;
(iii) as required for obtaining regulatory approvals for
manufacture or sale of Products; or
(iv) in complying with applicable laws or regulations or
fulfilling the disclosure requirements of any
securities regulatory agency or securities exchange
in the event of a securities offering by it; provided
that it gives the disclosing party prior notice of
such disclosure and takes reasonable actions to limit
the disclosure.
C. Upon expiration or termination of this Agreement, each party
shall promptly deliver to the other party all records in its
possession or control containing Confidential Information and
Materials furnished to it by, or belonging to, the other
party, other than an archival set which must be retained by
the Contractor for compliance purposes and which will be
maintained in accordance with the provisions of this Article.
XI. OWNERSHIP
A. Specifications - Contractor acknowledges that the
specifications and all related writings, drawings, artwork,
computer assisted designs, blueprints, manuals, notes,
notebooks, reports, memorandums and similar works and
materials are and shall be the exclusive property of Buyer,
and Buyer retains all right, title and interest, including
copyright, relating to such material. Contractor agrees to
maintain a full controlled set of Device Master Records for
any Products built for the Buyer. Upon termination of this
Agreement, Contractor agrees to return to Buyer all copies of
the specifications and related materials within twenty (20)
business days of such termination; this material shall be
complete in every respect, as to permit an experienced
manufacturer to manufacture, assemble, maintain and service
the Product described in this Agreement. If termination
occurs prior to building the Product, Contractor will provide
a data package containing all information updated as of the
date of termination. The material shall include a full
drawing package in reproducible form and any revisions or
updates, including but not limited to; electronic files,
AutoCAD files, fabrication drawings, approved supplier list,
test specifications, tooling specifications and drawings,
manufacturing assembly instructions, routings, quality
assurance protocols, test equipment, specs and drawings and
engineering change notice history, device master files, and
device history records. Transfer of information will be
Product specific not including Contractor's proprietary
policies and procedures.
B. Buyer's Equipment - Contractor shall install, maintain and
account for Buyer's Equipment at Contractor's facility or
Contractor's subcontractor's facility in accordance with cGMP.
Contractor hereby acknowledges that the Buyer's Equipment is
the sole and exclusive property of Buyer. Buyer shall provide
identification and
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ownership tags (also called asset tags) for the Buyer's
Equipment, and Contractor shall ensure that such tags are
properly placed and maintained on all Buyer's Equipment.
Contractor here by covenants that, during the term of this
Agreement.
(i) Contractor and any subcontractor of Contractor using
Buyer's Equipment shall utilize Buyer's Equipment solely for
manufacturing Buyer's requirements of the Product as provided
hereunder,
(ii) Contractor shall not encumber any of the Buyer's
Equipment, nor shall Contractor permit the Buyer's Equipment
to become encumbered as a result of any act or omission of
Contractor or a subcontractor of Contractor.
C. Within Twenty (20) business days following termination or
expiration of this Agreement, Contractor agrees to properly
pack and return to Buyer, or cause to be properly packed and
returned to buyer, F.O.B. point of shipment, all Buyer's
Equipment, the same to be shipped to such facility as Buyer
directs at Buyer's expense.
D. Improvements - Contractor hereby acknowledges that all
improvements shall be the sole property of Buyer, and
Contractor shall provide Buyer, at Buyer's request and at a
reasonable charge, reasonable assistance in securing patents
for such improvements. Contractor agrees to promptly disclose
all improvements to Buyer and to execute, or have its
employee's, agents, subcontractors or representatives execute
documents reasonable requested by Buyer to evidence Buyer's
ownership of such improvements and any intellectual property
rights related thereto or to perfect Buyer's ownership rights
of same.
XII. INDEMNITY
A. Buyer agrees to indemnify against and hold harmless
Contractor, its affiliated entities, and their respective
officers, directors, shareholders, employees and agents and
their respective successors and assigns from and against any
and all claims, losses, damages, liability, costs and expenses
of any nature whatsoever, whether accrued, absolute,
contingent or otherwise (including, without limitation,
reasonable attorney's fees and legal costs and disbursements
whether or not suit is brought) arising out of Buyer's
negligence, reckless conduct, or willful misconduct: provided,
that Buyer's liability hereunder shall be reduced
proportionately by the percentage of fault, if any that may
ultimately be assigned or imposed on Contractor by a court or
arbitrator as a result of the Contractor's own negligence,
reckless conduct or willful misconduct including but not
limited to (i) any failure of a manufactured instrument to
conform to Design Specifications or (ii) any failure of a
manufactured instrument to conform to cGMP regulations. In
the event any claim is asserted or any suit is filed against
Contractor for which Buyer is or may be required to indemnify
Contractor under this provision, Contractor shall give Buyer
prompt written notice of same. Any failure to so notify the
Buyer shall not relieve Buyer from any liability that it may
have to Contractor except to the extent that such failure to
notify shall be prejudicial to a proper defense against the
claim or action or other satisfactory resolution. In the
event of any such claim or suit against the Contractor,
Contractor may at its option tender defense of the claim or
suit to Buyer, in which case the Contractor shall cooperate
with Buyer, at Buyer's request and expense, in the defense of
such claim or suit and Buyer shall have the sole right to
defend and/or settle such a claim or suit, including selecting
counsel of its choice. Regardless of whether or not
Contractor tenders defense of the claims or requirement of
this paragraph that Buyer fully indemnify Contractor remains
in full force and effect. To the extent that the settlement
of a claim, the defense of which has been assumed by the
Buyer, involves the payment of money only, the buyer shall
have the right, in consultation with the Contractor, to settle
those aspects dealing only with the payment of money, provided
that the Buyer pays such money and such settlement includes a
general release from the other parties to such proceeding in
favor of the Contractor. Notwithstanding the foregoing, in
connection with any such defense or settlement, the Buyer
shall not enter into a consent decree involving injunctive or
other nonmonetary relief without the Contractor's prior
written consent, which consent shall not be unreasonably
withheld. In the event the Contractor desires to settle any
third party claim, the Contractor shall advise the Buyer in
writing of the amount it proposes to pay in settlement
thereof. If such proposed settlement is unsatisfactory to the
Buyer, it shall have the right to continue to defend
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the claim or to assume control of the defense of such claim
from the Contractor.
B. Contractor agrees to indemnify against and hold harmless
Buyer, its affiliated entities, and their respective officers,
directors, shareholders, employees and agents and their
respective successors and assigns from and against all claims,
losses, damages, liability, costs and expenses of any nature
whatsoever, whether accrued, absolute, contingent or otherwise
(including, without limitation, reasonable attorney's fees and
legal costs and disbursements whether or not suit is brought)
arising out of Contractors' manufacture of the instrument /
product, including but not limited to (i) any failure of the
Contractor to manufacture the instrument / product in
conformance with the Design Specifications, (ii) any failure
by the Contractor to comply with FDA cGMP regulations, (iii)
the negligent manufacture of the instrument / product by the
Contractor, or (iv) breach by Contractor of any of its
warranties or covenants contained in this Agreement, provided,
that Contractor's liability hereunder shall be reduced
proportionately by the percentage of fault, if any that may
ultimately be assigned or imposed on Buyer by a court of law
or arbitrator as a result of the Buyer's own negligence,
reckless conduct or willful misconduct. In the event any
claim is asserted or any suit is filed against Buyer for which
Contractor is or may be required to indemnify Buyer under this
provision, Buyer shall give Contractor prompt written notice
of same. Any failure to so notify the Contractor shall not
relieve Contractor from any liability that it may have to
buyer except to the extent that such failure to notify shall
be prejudicial to a proper defense against the claim or action
or other satisfactory resolution. In the event of any such
claim or suit against the Buyer, Buyer may at its option
tender defense of the claim or suit to Contractor, in which
case the Buyer shall cooperate with Contractor, at
Contractor's request and expense, in the defense of such claim
or suit and Contractor shall have the sole right to defend
and/or settle such a claim or suit, including selecting
counsel of its choice. Regardless of whether or not buyer
tenders defense of the claim or suit to Contractor, and
regardless of whether or not any such tender is accepted or
rejected by contractor, the requirement of this paragraph that
contractor fully indemnify Buyer remains in full force and
effect. To the extent that the settlement of a claim, the
defense of which has been assumed by the contractor, involves
the payment of money only, the Contractor shall have the
right, in consultation with the Buyer, to settle those aspects
dealing only with the payment of money, provided that the
Contractor pays such money and such settlement includes a
general release from the other parties to such proceeding in
favor of the Buyer. Notwithstanding the foregoing, in
connection with any such defense or settlement, the Contractor
shall not enter into a consent decree involving injunctive or
other nonmonetary relief without the Buyer's prior written
consent, which consent shall not be unreasonably withheld. In
the event the Buyer desires to settle any third party claim,
the Buyer shall advise the Contractor in writing of the amount
it proposes to pay in settlement thereof. If such proposed
settlement is unsatisfactory to the Contractor, it shall have
the right to continue to defend the claim or to assume control
of the defense of such claim from the Buyer.
XIII. FORCE MAJEURE
Neither party shall be considered to be in default in respect of any
obligation hereunder, if failure of performance shall be due to Force
Majeure. If either party is effected by a Force Majeure event, such
party shall, within ten (10) days of its occurrence, give notice to
the other party stating the nature of the event, its anticipated
duration and any action being taken to avoid or minimize its effect.
The suspension of performance shall be of no greater scope and no
longer duration than is required and the non-performing party shall
use reasonable efforts to remedy its inability to perform. Force
Majeure shall mean, without limitation, explosion, flood, fire, war
(whether declared or otherwise), accident, labor strike, or other
labor disturbance, sabotage, acts of God, or acts of regulatory
agencies, including withdrawal or suspension of licenses and consents,
which are beyond the control of a party.
XIV. REGULATORY MATTERS
A. Complaints - Buyer and Contractor agree to exchange within
five working days of receipt all written and oral complaints
as defined by cGMP in 21 CFR 820.198 related to Products, with
the exception that complaints related to death, injury or
imminent health hazard will be exchanged with two calendar
days of receipt. The Buyer is the listed manufacturer of the
Product and will be responsible for the following MDR
reporting
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requirements:
(i) Manufacturer will be required to submit MDR reports
to FDA (1) within 30 days of becoming aware of
information that reasonably suggests that a device
may have caused or contributed to a death or serious
injury; (2) within 30 days of becoming aware of
information that reasonably suggests a device has
malfunctioned and that that device or a similar
device marketed by the manufacturer would be likely
to cause a death or serious injury if the malfunction
were to recur; or (3) within 5 days of (a) becoming
aware that a reportable MDR event or events, from any
information, including any trend analysis,
necessitates remedial action to prevent an
unreasonable risk of substantial harm to the public
health, or (b) becoming aware of an MDR reportable
event for which FDA has made a written request for
the submission of a 5 day report.
(ii) Manufacturers also have responsibilities for
submitting baseline reports to FDA regarding
marketing information about devices that have been
the subject of MDR's) in accordance with section
803.55 of the regulations.
Contractor will use its best effort to close complaints in a
timely manner upon receipt and evaluation of the device at the
Contractor's facility, and any other information pertinent to
the investigation.
B. Registration - Contractor hereby represents to Buyer that it
is and will remain a FDA registered Manufacturer.
Additionally, the Contractor represents that it is and will
retain its ISO9001 certification and maintain a quality system
in compliance with EN46001 for the duration this Agreement.
C. Product Reports - Buyer shall provide Contractor with a copy
of all medical device reports ("MDR") and user reports
pertaining to the Product of which the Buyer is aware.
D. FDA Inspection Reports - Contractor shall, within five working
days of receipt, provide the Buyer with copies of any FDA Form
483 observations, follow-up warning letters or close-out
reports for those portions of FDA cGMP compliance inspection
reports relating specifically to the manufacture of the
Product(s) for any facility where the Product(s) is
manufactured.
E. Contacts - Each party shall designate an individual within
their organization to be the primary contact regarding
regulatory issues. Such individual can be changed by giving
written notice thereof to the other party.
F. Contractor agrees to provide Buyer upon demand access to all
of the following specific documentation and all copies thereof
required for pre-market approval or other required submittal
to the FDA or any other regulatory body: engineering drawings,
engineering specifications, work orders, change orders,
manufacturing procedures, inspection procedures, quality
assurance procedures, labeling procedures, maintenance log and
procedure for equipment used to manufacture Products,
inspection reports, calibration procedures and specifications,
Product release procedures, tooling drawings and
specification, product specifications, significant
documentation. The above documentation shall be prepared in a
manner which is acceptable to Buyer, and will be in accordance
with applicable FDA or other regulatory requirements of buyer
and shall be labeled as such. Contractor acknowledges its
understanding that these documents will be critical to Buyer's
pre-market approval submissions and continuing FDA or other
regulatory body requirements. Accordingly, Contractor agrees
that it shall perform all of its obligations hereunder in a
manner which shall in all cases meet all applicable FDA or
other regulatory body requirements to support Buyer's
pre-market approval process and continuing FDA or other
regulatory body compliance.
G. If there is a FDA or regulatory agency action against the
Contractor that would preclude the Contractor from meeting its
obligations under this agreement, Buyer may, at its sole
discretion, require renegotiation of certain terms of this
Agreement based on the adverse effects of changed market
circumstances as a result of such
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FDA or other regulatory agency action or voluntary recall.
H. In the event that Contractor moves or changes the site for the
manufacturing of Product, any costs involved with a site
change shall be borne by the Contractor. Any costs associated
with PMA supplemental filings as the result of a site change
shall be borne by the Buyer.
XV. NOTICES
A. Any notice given under this Agreement shall be written.
Written notice shall be sent by registered mail or by
certified mail, postage prepaid, return receipt requested, by
facsimile or be personally served. Any facsimile notice must
be followed within three (3) days by actual written notice as
set forth above. Any notice personally served or marked as
set forth above shall be deemed to have been given on the date
of personal delivery or the date such notice was deposited in
the US Mail as set forth above. All notices shall be
addressed as followed:
If to Contractor: If to Buyer:
Manager, Customer Support & Contracts Vice President of Manufacturing
SeaMED Corporation Biofield Corp.
00000 XX 00xx Xxxxxx 0000 Xxxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000 Xxxxxxx, Xxxxxxx 00000
with copies to: with copies to: CEO
Vice President, Operations
Vice President, Regulatory Affairs and Executive Vice
President Quality Assurance Biofield Corp.
SeaMED Corporation 0000 Xxxxxxxxxxx Xxxxxxx, Xxxxx 000
14500 NE 87th Street Roswell, Georgia 30076
Xxxxxxx, XX 00000
Either party may change its address for the purpose of this
section by giving the other party notice thereof in accordance
with this section.
XVI. TERMINATION
A. Upon any material breach of the terms and provisions herein,
this Agreement may be terminated by either party hereto if
such breach is not corrected within sixty (60) calendar days
after written notice to the defaulting party calling for
remedy of such breach. If any provision of this Agreement
gives any party the right to terminate this agreement, upon
the occurrence or non-occurrence of certain stipulated events,
such termination shall be effective upon written notice to the
other party.
B. Either party may immediately terminate this Agreement, if the
other party shall have become insolvent or bankrupt, or any
case or proceeding shall have been commenced by or against the
other party in bankruptcy or seeking liquidation, dissolution
or winding-up, and any such event shall have continued for 30
days without being dismissed, bonded or discharged.
C. In the event that this agreement is terminated, the parties
agree as follows:
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(i) If Buyer or Contractor terminates this Agreement,
either by notice or as a result of breach by the
Buyer or Contractor, Buyer shall buy from Contractor,
at cost, any and all transferable parts which are in
inventory or are on order and non-cancelable by
Contractor. Buyer shall reimburse contractor for all
finished goods, work in process and raw materials
inventory either on hand or on order and
non-cancelable, purchased and/or manufactured as a
result of Buyer's purchase orders or approved
production forecasts. Contractor shall complete any
work in process if so requested by Buyer as if no
termination notice was given. If the materials are
not useable by the Buyer as a result of the Breach by
the Contractor, the Buyer is not obligated to
purchase the materials. In any event the Buyer will
not be obligated to purchase materials for which the
Buyer has not issued a firm Purchase Order.
(ii) If Buyer or Contractor terminates this agreement, and
if Buyer requests Contractor's assistance in
establishing an alternate source for the production
of the product, Contractor shall provide to Buyer any
design details, tooling and WIP relating to the
product. Buyer shall be responsible for all costs
associated with establishing an alternate source,
including but not limited to copying records and
transferring transferable parts to an alternate
source. Buyer shall also reimburse Contractor for
all outstanding costs incurred an all non-cancelable
committed costs associated with the Limited
Production Phase of this agreement. Contractor shall
provide a complete listing of parts including
traceability records.
XVII. SURVIVAL
The articles and provisions of this Agreement dealing with Delivery,
Payment, Warranty, Confidential Information, Ownership, Indemnity, US
Customs, Marking, Duty Drawback Requirements, and Compliance with
Laws, shall survive termination or expiration of this Agreement for a
period of 5 years.
XVIII. GENERAL
A. The terms of this Agreement may only be supplemented or
modified by written amendment executed by all parties hereto.
If either party fails to enforce any term of this Agreement,
failure to enforce on that occasion shall not prevent
enforcement on any other occasion.
B. As used in this Agreement, except where otherwise noted, the
term "days" shall mean business days.
C. The parties hereto (including their respective agents and
employees) are independent contractors and nothing contained
in this Agreement shall be deemed or construed to create the
relationship of partnership or joint venture or any
association or relationship between the parties other than
buyer and seller. Without limiting the generality of the
foregoing, Contractor is not authorized to represent or make
any commitments on behalf of Buyer, and Buyer expressly
disclaims any liability therefore.
D. All rights and remedies conferred by this Agreement, by any
other instrument, or by law are cumulative and may be
exercised singularly or concurrently. If any provision of
this Agreement is held invalid by any law or regulation of any
government or by any court, such invalidity shall not affect
the enforceability of any other provisions hereof. The Terms
and Conditions of this Agreement shall be governed by the laws
of the State of Georgia, including the Uniform Commercial Code
as in effect, in Georgia on the date of this Agreement (the
"Code"). Whenever a term defined by the Code is used in this
Agreement, the definition contained in the Code shall apply
here. Contractor agrees that any proceeding brought in
connection with this Agreement shall be brought in any court
of competent jurisdiction in Georgia.
E. Neither party shall assign this Agreement or any of their
respective duties and obligations hereunder without the prior
written consent of the other party; provided, however, that
this Agreement may be assigned by Buyer to any company that is
the successor to all or substantially all of the business and
property of Buyer.
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CONFIDENTIAL TREATMENT REQUESTED
F. Each party agrees to execute, acknowledge and deliver such
further instruments and to do all such other acts as may be
necessary or appropriate to carry out the purpose and intent
of this Agreement.
G. This Agreement together with the Attachments and any Purchase
Orders contains the entire agreement of the parties with
respect to its subject matter, and supersedes all prior
negotiations, correspondence, understandings and agreements
between the parties respecting the subject matter hereof.
XIX. BUSINESS REVIEWS
A. Buyer and Contractor shall, each at their own expense, meet
periodically to review performance and business transacted,
and to identify and resolve those issues which have arisen
since the last business review meeting. These reviews should
take place at least semi-annually.
B. Buyer and Contractor shall furnish agenda items not later than
one (1) week prior to scheduled business review meetings.
Minutes shall document action items, open items, and committed
dates which may be the result from such business review
meetings, and shall be sent by the drafting party to the other
party within ten (10) days after each meeting.
XX. INSURANCE
A. Contractor agrees to carry at all times, and with companies
acceptable to Buyer, insurance of the kinds and in the amounts
listed below and such insurance to cover Buyer as an
additional insured and such policies to provide for 30 days'
prior written notice to Buyer before any material change
therein or cancellation. Contractor further agrees to furnish
Buyer with a certificate of such insurance contemporaneously
with the signing of this Agreement.
(i) Worker's Compensation statutory limits in each state
in which Contractor is required to provide Worker's
Compensation coverage.
(ii) Employee's Liability not less than XXXXX per employee.
(iii) Comprehensive General Liability - including
Contractual Liability, Independent Contractor's
Liability, Products and/or Completed Operations
Liability, and Personal Injury / Property Damage
Coverage's in a combined single limit of not less
than XXXXX.
(iv) Automobile Liability for owned, non-owned and hired
vehicles in a combined single limit of not less than
XXXXX.
(v) Umbrella Liability a combined single limit of not
less than XXXXX.
B. Buyer agrees to carry at all times, and with companies
acceptable to contractor, insurance of the kinds and in the
amounts listed below and such insurance to cover Contractor as
an additional insured and such policies to provide for 30
days' prior written notice to Contractor before any material
change therein or cancellation.
(i) Comprehensive General Liability - including
Contractual Liability, Independent Contractor's
Liability, Products and/or Completed Operations
Liability, and Personal Injury / Property Damage
Coverage's in a combined single limit of not less
than XXXXX.
(ii) Umbrella Liability a combined single limit of not
less than XXXXX.
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XXI. LIMITATION OF LIABILITY
Except as otherwise provided in this Agreement, neither party shall be
liable for special, indirect, incidental, or consequential damages.
The foregoing limitation shall not limit Contractor's liability for
any costs, expenses, and damages arising out of or in connection with:
claims brought by third parties; Contractor's unauthorized disclosure
of Buyer's Confidential Information and Materials; or any
indemnification (including Section X, Intellectual Property Indemnity)
granted by Contractor in connection with this Agreement.
XXII. NO IMPLIED LICENSE
The parties understand that, except as may be otherwise expressly
stated herein, neither the Terms or Conditions of this Agreement, nor
the acts of either party arising out of this Agreement or related to
Buyer's purchase, use, sale, or other distribution of Product may be
considered in any way as a grant of any license whatsoever under any
of Buyer's present or future patents, copyrights, trademarks, trade
secrets, or other proprietary rights. Nor is any such license granted
by implication, estoppel, or otherwise.
XXI. APPROVALS
IN WITNESS WHEREOF, the authorized representatives of the parties have
executed this Agreement under seal as of the date(s) set forth below.
SEAMED CORPORATION BIOFIELD CORP.
CONTRACTOR BUYER
By: By:
/s/ Xxx Xxxx /s/ Xxxxx X. Xxxxxxxx
------------------------------------- ---------------------------------------
(Signature) (Signature)
Xxx Xxxx Xxxxx X. Xxxxxxxx
------------------------------------- ---------------------------------------
(Printed) (Printed)
Vice President of Operations Vice President Manufacturing
------------------------------------- ---------------------------------------
(Title) (Title)
November 4, 1996 October 30, 1996
------------------------------------- ---------------------------------------
(Date) (Date)
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