Exhibit 10.3
CERTAIN INFORMATION HAS BEEN DELETED FROM THIS EXHIBIT AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT UNDER RULE 24B-2.
SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (the "Agreement") is made and entered into
effective as of October 11, 2002 (the "Effective Date"), between MEDAMICUS,
INC., a Minnesota corporation, with a place of business at 00000 Xxxxxxx 00
Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000 ("MedAmicus"), and MEDTRONIC, INC., THROUGH
ITS CARDIAC RHYTHM MANAGEMENT DIVISION, a Minnesota corporation, with a place of
business at 000 Xxxxxxxxx Xxxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000 ("Medtronic").
RECITALS:
1. Medtronic is a manufacturer of medical devices.
2. MedAmicus is a manufacturer of percutaneous lead introducer kits and
other products for use with medical devices.
3. MedAmicus desires to sell percutaneous lead introducers and other
products to Medtronic and Medtronic wishes to purchase these products from
MedAmicus all on terms set forth below.
AGREEMENTS:
NOW THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained herein and for other good and valuable mutual
consideration, the receipt and adequacy of which is hereby acknowledged, the
parties mutually agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Specific Definitions. As used in this Agreement, the following
terms shall have the meanings set forth or as referenced below:
"Affiliate" of a specified person means a person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the person specified. "Control" shall mean the
ownership of more than 50% of the shares of stock entitled to vote for the
election of directors in the case of a corporation, and more than 50% of the
voting power in the case of a business entity other than a corporation.
"Failure of Supply" means (i) MedAmicus' failure, for any reason other
than Force Majeure, to provide Product under the terms of this Agreement
(failure to provide product, for purposes of this paragraph, means that
MedAmicus fails to provide full quantity of product scheduled on a Medtronic
purchase order within ten (10) days of the scheduled delivery date three (3) or
more times within any 6-month period), (ii) MedAmicus' failure due to Force
Majeure to deliver any Product ordered in accordance with the provisions of this
Agreement by the date scheduled for delivery thereof, including but not limited
to a failure to deliver Product which conforms to the Specifications therefor,
which failure is not cured within three (3) months after MedAmicus is notified
of such failure, (iii) MedAmicus is prevented from delivering Product as a
result of bankruptcy, business failure, or similar event, or (iv) if MedAmicus
materially breaches this Agreement and does not cure such breach within thirty
(30) days after notice by Medtronic.
"Field of Use" means [ * * * ].
"Force Majeure" means any event or condition, not existing as of the
date of this Agreement, not reasonably foreseeable as of such date and not
reasonably within the control of either party, which prevents in whole or in
material part the performance by one of the parties of its obligations
hereunder, such as an act of government, war or related actions, civil
insurrection, riot, sabotage, strike, epidemic, fire, flood, windstorm, and
similar event.
"Intellectual Property" means U.S. and foreign patents and patent
applications, know-how, manufacturing processes, trade secrets, inventions,
discoveries and technical information including but not limited to information
embodied in drawings, designs, copyrights, copyright applications, trademarks
and trademark applications, material specifications, processing instructions,
formulas, equipment specifications, product specifications, confidential data,
computer software, electronic files, research notebooks, invention disclosures,
research and development reports and the like related thereto and all
amendments, modifications, and improvements to any of the foregoing.
"Introducer(s)" means introducer sheaths designed to gain venous access
for passing diagnostic and therapeutic devices in the body, not to exceed 9-1/2
inches in length.
"Introducer Kit(s)" means the Medtronic SoloTrak Introducer Kit and the
Medtronic PLI Introducer Kit.
"Licensed Intellectual Property" means, with respect to a Failure of
Supply of Product, all Intellectual Property owned or otherwise licensable by
MedAmicus to enable Medtronic to make, have made, and use and sell Product.
"MedAmicus" means MedAmicus, Inc. and its Affiliates.
"MedAmicus Slitter(s)" means any slitter sold to Medtronic under this
Agreement, whether as a component in a Product, or as a separate Product, as set
forth on Exhibit A, and as may be set forth in a written amendment signed by
both parties.
"MedAmicus VIP+" means the MedAmicus VIP+ Introducer as set forth on
Exhibit A, and as may be set forth in a written amendment signed by both
parties.
"Medtronic" means Medtronic, Inc. and its Affiliates.
"Medtronic Model 6216" means the therapy delivery system in the current
configuration as manufactured by MedAmicus for Medtronic, and as set forth on
Exhibit A, and as may be set forth in a written amendment signed by both
parties.
"Medtronic Model 6218" means the therapy delivery system in the current
configuration as manufactured by MedAmicus for Medtronic, and as set forth on
Exhibit A, and as may be set forth in a written amendment signed by both
parties.
"Medtronic Model 10600" means the therapy delivery system in the
current configuration as manufactured by MedAmicus for Medtronic, and as set
forth on Exhibit A, and as may be set forth in a written amendment signed by
both parties.
"Medtronic PLI Introducer Kit(s)" means that peelable, non-slittable
introducer kit manufactured by MedAmicus for Medtronic, with or without a Safety
Needle, as set forth on Exhibit A, and as may be set forth in a written
amendment signed by both parties.
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"Medtronic SoloTrak Introducer Kit(s)" means that slittable introducer
kit manufactured by MedAmicus for Medtronic, with or without a Safety Needle, as
set forth on Exhibit A and as may be set forth in a written amendment signed by
both parties.
"[ * * * ]Technology" means [ * * * ] Patent No. [ * * * ].
"Product(s)" means the Therapy Delivery Systems, the Introducer Kits,
the Safety Needles, the MedAmicus Slitters and the MedAmicus VIP+ sold by
MedAmicus to Medtronic under this Agreement.
"Safety Needles" means the MedAmicus Axia RSN(TM) Safety Needles set
forth on Exhibit A.
"[ * * * ] Technology" means all Intellectual Property heretofore and
hereafter owned by MedAmicus or acquired by or licensed to MedAmicus relating to
the design, manufacture, use or sale of the [ * * * ], including without
limitation, U.S. Patent Numbers [ * * * ] and subsequently filed patent
applications relating to the [ * * * ].
"Specifications" means Medtronic's specifications for manufacturing,
packaging and quality assurance for the Products as set forth on Exhibit A, with
such changes thereto as the parties may mutually agree through a written
amendment signed by both parties.
"Therapy Delivery Systems" means the Medtronic Model 6216, Medtronic
Model 6218 and Medtronic Model 10600 Therapy Delivery Systems as set forth on
Exhibit A, and as may be set forth in a written amendment signed by both
parties.
ARTICLE 2
SUPPLY OF PRODUCT
2.1 Therapy Delivery Systems.
(a) Medtronic Model 6216 and Medtronic Model 6218. Medtronic
will purchase exclusively from MedAmicus all of Medtronic's requirements for
Medtronic Model 6216 and Medtronic Model 6218 at the prices set forth on Exhibit
B. Notwithstanding the foregoing, Medtronic reserves the right, at any time
concurrent with purchasing the Medtronic Model 6216 and Medtronic Model 6218
from MedAmicus, to manufacture the Medtronic Model 6216 and Medtronic Model 6218
at its own facility should Medtronic determine, in its sole discretion, that
market demands necessitate additional manufacture of the Medtronic Model 6216
and Medtronic Model 6218 by Medtronic.
(b) Medtronic Model 10600. Medtronic will purchase exclusively
from MedAmicus all of Medtronic's requirements for Medtronic Model 10600 at the
prices set forth on Exhibit B, until January 1, 2003. Thereafter, Medtronic may,
at its sole option, continue for the time period it so determines, to purchase
its requirements of Medtronic Model 10600 exclusively from MedAmicus at the
prices set forth in Exhibit B; or purchase or obtain its requirements of
Medtronic Model 10600 from a party other than MedAmicus. Notwithstanding the
foregoing, Medtronic reserves the right, at any time concurrent with purchasing
the Medtronic Model 10600 from MedAmicus, to manufacture the Medtronic Model
10600 at its own facility should Medtronic determine, in its sole discretion,
that market demands necessitate additional manufacture of the Medtronic Model
10600 by Medtronic.
2.2 Introducer Kits and MedAmicus VIP+.
(a) PLI Introducer Kits, SoloTrak Introducer Kits and
MedAmicus VIP+. Medtronic agrees to purchase exclusively from MedAmicus all of
Medtronic's requirements for PLI Introducer Kits, SoloTrak Introducer Kits and
MedAmicus VIP+ at the prices set forth on Exhibit B.
(b) Safety Needle Conversion. Provided Medtronic is satisfied,
in its sole discretion, with the quality and level of customer and market
acceptance of the Safety Needles, Medtronic will begin purchasing all Medtronic
PLI Introducer Kits and Medtronic Solo-Trak Introducer Kits for all US
distribution (estimated to be 60 percent of current volume) with MedAmicus
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Safety Needles after December 1, 2002, and will market the Safety Needle as part
of the PLI Introducer Kits and Solo-Trak Introducer Kits. However, this
obligation shall exist only if Introducer Kits containing Safety Needles sell in
the market at levels equal to or greater than current sales of the Introducer
Kits without the Safety Needles. If Medtronic believes, at any time, that sales
are unacceptable, MedAmicus shall resume supply of Introducer Kits without the
Safety Needles. MedAmicus will sell the Safety Needles or Introducer Kits with
Safety Needles to Medtronic at the price set forth in Exhibit B. Medtronic
regulatory and marketing personnel will cooperate with MedAmicus to facilitate
this transition, and MedAmicus will supply marketing and regulatory material to
support the product launch. MedAmicus, at its own expense, will supply Medtronic
with sterile pouched non-engineered sharps protected needles for use by
salespeople, if necessary, in facilitating the transition. MedAmicus has assured
Medtronic that moving to Kits with safety needles will not result in an
obsolescence issue for Medtronic, and Medtronic has relied on that assurance in
agreeing to this position.
2.3 Additional Introducers and Alternative Technology. MedAmicus is
aware that Medtronic is interested in identifying new and different technology
to facilitate the implant process. Medtronic may identify new technology in
several categories: [ * * * ].
If Medtronic desires to pursue a [ * * * ], Medtronic shall not enter
into a supply agreement for the purchase of such [ * * * ] without first
notifying MedAmicus of such [ * * * ] and allowing MedAmicus six (6) months from
the date set forth in such notification to produce an identical product.
Medtronic may pursue [ * * * ] and [ * * * ] without restriction.
2.4 MedAmicus Slitters. In addition to providing Medtronic with
MedAmicus Slitters as components of the Medtronic Introducer Kits and Therapy
Delivery Systems, MedAmicus shall sell to Medtronic MedAmicus Slitters at the
price set forth on Exhibit B, at the quantities requested by Medtronic through a
purchase order. Nothing herein shall prohibit Medtronic from purchasing or
obtaining slitters from a party other than MedAmicus at any time. In the event
Medtronic intends to completely stop buying MedAmicus Slitters, it shall provide
MedAmicus with one hundred eighty (180) days written notice of such event. This
notice provision shall not impose obligations for forecasting or committing to
purchase orders other than those set forth in Article 3.
ARTICLE 3
GENERAL SUPPLY TERMS
3.1 No Minimum. There are no minimum purchase obligations of Medtronic
for any of the Products purchased hereunder.
3.2 Manufacture and Sale of Products. MedAmicus agrees to sell the
Products to Medtronic under the terms of this Agreement. MedAmicus will
manufacture the Products in accordance with the Specifications referenced on
Exhibit A, or as amended hereunder.
3.3 Change Notification. If MedAmicus finds it necessary or desirable
to make any changes to the process or materials used to produce the Products,
MedAmicus shall give Medtronic written notice and not implement any change to
primary tooling without Medtronic's consent, which shall not be unreasonably
withheld. Medtronic will respond to any Change Notification request within one
(1) business day; in the event that Medtronic's response includes a request for
more time to consider the change, MedAmicus shall not unreasonably withhold
consent to such a request. Examples of changes to be reported include but are
not limited to:
(a) New (different type) of raw material used in produce
the Product
(b) New process or new technology used to produce the
Products.
(c) New, repaired or modified primary tooling used to
produce the Product.
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(d) Any change deviating from the requirements listed on
the engineering specification or drawing.
(e) New sources for the materials and/or components used
to manufacture the Product.
(f) New or changed manufacturing facility.
(g) Changes to design documentation following initial
production release.
(h) Changes to inspection processes.
(i) Changes that modify process flow/sequence of events.
Similarly, if Medtronic finds it necessary or desirable to change any
such Specifications, it will so notify MedAmicus. MedAmicus will use its best
efforts to make any such changes relating to a regulatory or safety issue, and
will use all reasonable efforts to effect any other requested changes, in either
case at such an adjusted purchase price as Medtronic and MedAmicus may agree to
in writing pursuant to good faith negotiations. If such change would materially
affect the price or delivery date, the parties shall mutually agree on equitable
adjustments thereto.
3.4 Packaging and Labeling. All Products will be packaged and labeled
in accordance with any applicable Specifications.
3.5 Raw Materials. Unless otherwise specified by Medtronic upon request
for price quote for any Product to be fabricated and/or assembled pursuant to
the terms of this Agreement, all raw material to be used in the fabrication
and/or assembly by MedAmicus of any Product for Medtronic shall be purchased by
MedAmicus. MedAmicus shall purchase sufficient quantities if available such that
MedAmicus shall at all time have adequate raw material on hand to comply with
Medtronic's forty-five (45) day requirements.
3.6 Tooling. Currently, all tooling used to produce the Products, with
the exception of some of the tooling used to produce the Therapy Delivery
Systems, is owned by MedAmicus. If Medtronic supplies unique tooling in the
future, the following will apply: Any such tooling supplied or purchased by
Medtronic to or from MedAmicus shall be and remain the property of Medtronic.
MedAmicus shall store and maintain such tooling in good working condition, shall
insure it at full replacement value under an all-risk policy of property
insurance endorsed to name Medtronic as an additional insured with respect to
such tooling, and shall not relocate said tooling without the express written
permission of Medtronic. All direct charges for maintenance, repair or
replacement after expiration of useful life of any Medtronic tooling by
MedAmicus or any third party, other than that which may be caused by misuse of
any tooling by MedAmicus will be the sole financial responsibility of Medtronic.
MedAmicus shall use such tooling only in the manufacture of Medtronic Products
and shall return said tooling without cost other than freight and packaging
charges to Medtronic at any time upon the written request of Medtronic.
3.7 Price and Payment.
(a) Price. The parties agree that the selling price for the
Products set forth herein shall apply to all purchase orders issued by Medtronic
in accordance with this Agreement after the Effective Date and before the
expiration or termination of this Agreement, provided however that all such
guaranteed pricing shall be subject to annual review in December of each year
and possible changes or immediate charge per occurrence only for the following
additional direct costs incurred by MedAmicus:
(i) All costs quoted by MedAmicus to be incurred due
to the modification, revision, or redesign of any of the initial Product
Specifications provided by Medtronic.
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(ii) Any direct labor cost increase or decrease to
MedAmicus with respect to the fabrication and/or assembly of any Medtronic
Product only, which change shall be limited to one (1) consecutive twelve (12)
month period not to exceed the cost of living index increase in the U.S.
Consumer Price Index for all Urban Consumers for the relevant time.
(iii) If applicable, any increase or decrease in the
cost to MedAmicus of any material, goods, or services which Medtronic directs
MedAmicus to purchase from any independent third party vendor. Third party
supplier must provide adequate justification for price increases. If adequate
justification is not provided, Medtronic and MedAmicus agree to work jointly to
contain pricing with third party supplier. Medtronic will pay MedAmicus for each
shipment of Products within 30 days of MedAmicus' invoice.
(b) Most-Favored Pricing. If MedAmicus offers a product
comparable in quality and design to any Product covered by this Agreement to any
third party at pricing or terms more favorable (based on comparable quantities)
than this Agreement, MedAmicus will promptly notify Medtronic and extend the
more favorable pricing or terms to Medtronic.
(c) Price Reductions. On an ongoing basis, MedAmicus will use
reasonable commercial efforts to reduce the cost of Products and will in good
faith negotiate price reductions to equitably share the resulting cost savings
with Medtronic.
(d) Invoicing and Payment. Invoices for Product shall be
addressed to Medtronic's Accounts Payable Department. Such invoices shall bear
the purchase order number and details of the goods delivered. Any items such as
value added tax payable shall be separately itemized at the applicable rate.
3.8 Shipment. Unless otherwise agreed in writing by MedAmicus, the
Products will be shipped FOB MedAmicus' loading dock at Minneapolis, Minnesota,
or FOB the loading dock of the party providing final shrink wrapping of the
Products, if applicable.
3.9 Purchase Orders and Forecasts. Medtronic agrees to provide
MedAmicus a non-binding twelve (12) month rolling forecast, or Procurement
Requirement Plan, of Medtronic's reasonably expected monthly order volume for
each of the Products, with the exception of the MedAmicus VIP+, for the
forthcoming year. Medtronic agrees to update the forecast monthly. All purchases
of the Products will be initiated pursuant to Medtronic purchase orders, which
are subject to acceptance by MedAmicus. Products will be ordered via standard
Medtronic purchase orders, which may be submitted via mail, fax or, if mutually
agreed by the parties, electronic data interchange (EDI). MedAmicus will
promptly acknowledge receipt of orders. Orders will be deemed accepted upon
receipt, unless MedAmicus provides notice of rejection within five (5) business
days.
In order of priority, the terms of any order will be defined by the
terms of (a) this Agreement and (b) the typed portions of Medtronic's purchase
order, (c) the typed portions of MedAmicus' acceptance, (d) the printed terms of
Medtronic's order, and (e) the printed terms of MedAmicus' acknowledgement.
Medtronic will place orders at least forty-five (45) days prior to the
scheduled delivery date. Medtronic may reschedule delivery dates within a
purchase order if mutually agreed upon by MedAmicus. Medtronic shall have the
right upon reasonable notice to MedAmicus to increase by purchase order its
requirements for Product in whatever quantity is reasonably necessary to meet
both Medtronic's current and future requirements, provided however that any
increase or decrease in excess of fifty percent (50%) of any Product ordered by
Medtronic over that purchase in the preceding six months shall require a minimum
sixty (60) day notice.
3.10 Delivery. Delivery of Product shall be effected by MedAmicus
within agreed upon Product lead times. MedAmicus shall notify Medtronic of any
obstacles to meeting these lead times and any changes to lead times shall be
mutually agreed upon by both parties. The period specified above in this
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Article, and any other agreed delivery period, is a firm commitment by MedAmicus
and time of delivery shall be of the essence for all purchase orders placed
under this Agreement.
(a) Early Delivery. Medtronic shall not be obliged to accept
any deliveries tendered before the agreed date and may return the Product to
MedAmicus at MedAmicus' sole risk and expense if delivered more than five days
early. Alternatively Medtronic may elect to retain such Products and keep them
in trust for and at the risk of MedAmicus and pay the price thereof in
accordance with this Agreement upon receipt of any invoice effective at the
agreed date of delivery.
(b) Notice of Delay in Delivery. MedAmicus shall promptly
notify the appropriate Medtronic buyer, by fax, phone, or e-mail of any
prospective delay in delivery and MedAmicus shall obtain Medtronic's prior
approval before shipment. If the delivery of the Products is delayed through no
fault of Medtronic, Medtronic may, at its option, require MedAmicus to deliver
the Products by means of premium transport identified by Medtronic with shipping
costs to be borne by MedAmicus.
(c) Drop shipping. MedAmicus agrees to drop ship Products to
third party fabricators identified by Medtronic. MedAmicus will invoice the cost
of Products to such third party fabricators as are mutually agreed upon by
Medtronic and MedAmicus. In case of default in payment by such a third party
fabricator, Medtronic will be responsible for payment for Products unless loss
or damage of Products is a direct result of improper packaging by MedAmicus.
(d) Allocation. Upon receipt of a purchase order from
Medtronic, MedAmicus' obligation shall be to exercise its best efforts to comply
with all requested receipt dates. Should MedAmicus be unable to meet its
delivery obligation for Products, such as amounts or delivery date, in addition
to any other rights hereunder, Medtronic shall be a preferred customer for
delivery of what Product is available and in no case shall receive less than a
pro rata share based on volume purchased over the preceding calendar year. If
MedAmicus cannot supply the full amount of the order within the time requested,
Medtronic may cancel any or all of such order. If MedAmicus delivers Products
more than three (3) days late to requested date, MedAmicus' delivery rating will
be negatively affected.
3.11 Compliance with Laws and Regulations.
(a) MedAmicus represents and warrants to Medtronic that all
Product will comply with present and future applicable statutes, laws,
ordinances and regulations of national, federal, state and local governments now
or hereafter in effect materially relating to its manufacture of the Products.
Without limitation, MedAmicus represents and warrants to Medtronic that the
Products delivered to Medtronic under this Agreement will have been manufactured
in accordance with U.S. Food and Drug Administration ("FDA") Good Manufacturing
Practices and MedAmicus' ISO-9001 certifications, and all applicable ISO
standards and certified processes, and that no Products delivered by MedAmicus
to Medtronic will be adulterated or misbranded at the time of delivery within
the meaning of the U.S. Food, Drug and Cosmetic Act and regulations thereunder.
Additionally, MedAmicus represents and warrants that Products delivered to
Medtronic hereunder will be manufactured in accordance with all other quality
standards and assurance plans referenced in the Specifications. Subject to the
non-disclosure requirements of Section 12.1, MedAmicus will provide reasonable
access for Medtronic's regulatory personnel from time to time to the facilities
and records of MedAmicus for the purpose of confirming MedAmicus' compliance
with any applicable FDA Good Manufacturing Practices and all other applicable
requirements noted in this section.
(b) Medtronic is responsible for compliance with present and
future applicable statutes, laws, ordinances and regulations of national,
federal, state and local governments now or hereafter in effect, including
without limitation, applicable import and export laws, materially relating to
its purchase, distribution or commercial sale of the Products. MedAmicus will
provide to Medtronic the right to reference appropriate sections of MedAmicus'
FDA submissions for the Slitter Technology, or other MedAmicus Technology, as
are relevant to Medtronic's regulatory approval efforts for the Product
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3.12 Non-Conforming Product.
(a) Medtronic will have the right to reject any Product which
does not meet the applicable Specifications, until the later of twelve (12)
months from shipment or the "use before" date marked on the packaging.
(b) In the event that any Product does not meet applicable
Specifications and Medtronic has notified MedAmicus, MedAmicus will replace such
Product free of charge and MedAmicus shall cover expenses (including freight and
customs clearance, if any) incurred by Medtronic in connection with (1) shipment
of replacement Product to the same location and (2) shipment of the
non-conforming Product back to MedAmicus (if so requested by MedAmicus). In the
event of a rejection of defective Product, MedAmicus will ship replacement
Product within thirty (30) days of its receipt of a proper rejection notice from
Medtronic.
3.13 Approvals.
(a) For all Medtronic labeled Product hereunder, Medtronic
will be responsible for obtaining any regulatory and agency approvals. MedAmicus
will provide reasonably necessary assistance to Medtronic in obtaining those
approvals.
(b) For all MedAmicus labeled Product hereunder, MedAmicus
will be responsible for obtaining any regulatory and agency approvals. Medtronic
will provide reasonably necessary assistance to MedAmicus in obtaining those
approvals.
In addition, regarding MedAmicus labeled Product:
(i) MedAmicus warrants that Product has been cleared
by the U.S. Food and Drug Administration for commercial sale in the United
States and that the Product has received the requisite CE xxxx for sales outside
the United States. FDA approval and the CE xxxx are material terms of this
Agreement. MedAmicus shall notify Medtronic immediately of any recall of the
Product or if the approved status of the Product is called into question for any
reason.
(ii) MedAmicus shall retain responsibility for
complaint handling, and agrees to maintain complaint records consistent with the
MDR requirements established by the FDA. Medtronic agrees to forward any
complaints it receives regarding the Product from any Medtronic customer to
MedAmicus promptly. MedAmicus shall notify Medtronic of any complaints it
receives regarding the Product from any of its customers within one (1) working
day.
(iii) In the event of a product problem, MedAmicus
agrees to manage the response process and to work in good faith with Medtronic's
regulatory organization to determine FDA strategy. MedAmicus recognizes the
importance to Medtronic of its strong relationship with customers, and MedAmicus
therefore agrees to allow Medtronic to participate in notifying Medtronic
customers of a Product problem, if Medtronic wishes.
(iv) If MedAmicus makes any change in regulatory
status in any country in which Product is sold, MedAmicus will notify Medtronic.
(v) All relevant quality related documents shall be
kept on file by MedAmicus for a minimum of five (5) years, and shall be
presented to Medtronic on request. Records shall be stored in a manner designed
to protect against loss, damage, deterioration and misuse.
(c) For all Product sold to Medtronic hereunder, in the event
of an FDA audit, or an audit by any other relevant regulatory body, MedAmicus
shall notify Medtronic immediately of any written findings from the FDA or any
other notified body.
3.14 Subcontracting. MedAmicus may not subcontract any of its
obligations under this Agreement without the prior consent of Medtronic, which
will not be unreasonably withheld.
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3.15 Warranty. MedAmicus warrants that the Products sold under this
Agreement will conform with the Specifications and will be free from defects in
material and workmanship at the time of shipment. MedAmicus will repair or
replace non-conforming goods, or refund the purchase price, if the Product is
returned to MedAmicus prior to the "use before" date stamped on the Product if
the product is found by MedAmicus to not conform with the specifications. THIS
WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, STATUTORY OR
OTHERWISE, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR PARTICULAR USE.
3.16 Limitations. Under no circumstances will either party be liable
for any indirect, consequential, collateral, special or incidental damages
(including, without limitation, loss of profits), with respect to any product or
service provided hereunder, whether such claim is based on contract, negligence,
strict tort, warranty or any other basis.
3.17 Last Time Buy. If MedAmicus elects to exit the business of making
any Product, MedAmicus shall give Medtronic notice two (2) years before such
exit and give Medtronic the opportunity for a last time buy.
ARTICLE 4
FAILURE OF SUPPLY AND FORCE MAJEURE
4.1 Notice of Force Majeure. Subject to Section 4.3 below, upon giving
notice to the other party, a party affected by an event of Force Majeure shall
be released without any liability on its part from the performance of its
obligations under this Agreement, except for the obligation to pay any amounts
due and owing hereunder, but only to the extent and only for the period that its
performance of such obligations is prevented by the event of Force Majeure.
4.2 Suspension of Performance. Subject to Section 4.3 below, during the
period that the performance by one of the parties of its obligations under this
Agreement has been suspended by reason of an event of Force Majeure, the other
party may likewise suspend the performance of all or a part of its obligations
hereunder (except for the obligation to pay any amounts due and owing hereunder)
to the extent that such suspension is commercially reasonable.
4.3 Exercise of License Upon Failure of Supply. Upon a Failure of
Supply, Medtronic shall have the right to exercise its license rights granted
pursuant to Section 4.4 below to manufacture and sell such Product (but not any
other Product) itself or have such Product manufactured by others. Such right
will terminate at such time as MedAmicus demonstrates an ability to commence
manufacturing and shipping on a timely basis.
4.4 License Grant. MedAmicus hereby grants Medtronic a non-exclusive,
perpetual, worldwide, paid-up license to the Licensed Intellectual Property,
including, but not limited to, the [ * * * ] to make, have made, use,
distribute, sell, offer for sale, have sold, import and otherwise commercialize
and exploit the Product; provided that Medtronic may not exercise such license
unless and until the occurrence of a Failure of Supply and only for the duration
of the Failure to Supply. Medtronic may not sublicense the rights granted in
this paragraph, except to the extent required for Medtronic to have the Product
manufactured for sale by Medtronic or its affiliates and only for the duration
of the Failure to Supply.
4.5 Technology Support. In support of the license granted pursuant to
Section 4.4 above, MedAmicus shall provide technical support and training and
otherwise assist Medtronic in establishing its own manufacturing operations for
the production of each Product. MedAmicus will also provide Medtronic with a
full and enabling technology transfer (including any tooling, mask works,
foundry access, or other critical items necessary for production) relative to
Product. Technology Support provided by MedAmicus during the period of Failure
to Supply will be promptly returned to MedAmicus at such time as MedAmicus
demonstrates an ability to commence manufacturing and shipping on a timely
basis.
9
4.6 Maintain Licenses in Force. MedAmicus shall comply with all of the
provisions of, and shall maintain in full force and effect, all license
agreements with third parties pursuant to which MedAmicus is licensee of
Intellectual Property included in the Licensed Intellectual Property. MedAmicus
shall promptly notify Medtronic if any such third party licensor alleges any
breach by MedAmicus of any such license agreement. Medtronic shall be entitled,
but not obligated, to cure any alleged breach by MedAmicus of such license
agreement and set-off the cost of such cure against amounts otherwise owed to
MedAmicus hereunder.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1 Representations of MedAmicus. MedAmicus represents, warrants and
covenants to Medtronic that:
(a) MedAmicus is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Minnesota and has
full corporate power to conduct the operations in which it is presently engaged
and to enter into and perform its obligations under this Agreement.
(b) MedAmicus has taken all necessary corporate action under
the laws of the State of Minnesota and its charter, bylaws or other governing
instruments to authorize the execution and consummation of this Agreement. This
Agreement constitutes the valid and legally binding agreement of MedAmicus,
enforceable against MedAmicus in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(c) Neither the execution and delivery of this Agreement, nor
the consummation of the transactions contemplated herein, will violate any
provision of the charter, bylaws or other governing instruments of MedAmicus or
any law, rule, regulation, writ, judgment, injunction, decree, determination,
award or other order of any court or governmental agency or instrumentality,
domestic or foreign, or conflict with or result in any breach of any of the
terms of or constitute a default under or result in termination of or the
creation or imposition of any mortgage, deed of trust, pledge, lien, security
interest or other charge or encumbrance of any nature pursuant to the terms of
any contract or agreement to which MedAmicus is a party or by which MedAmicus or
any of its assets is bound.
(d) All Intellectual Property used by MedAmicus in, or
licensed to Medtronic pursuant to Section 4.4 for, the manufacture of Product
under this Agreement, other than Intellectual Property provided to MedAmicus by
Medtronic expressly for use in the manufacture of Product, will not and does not
infringe any Intellectual Property rights of any third party.
(e) There are no actions, suits, claims, disputes or
proceedings or governmental investigations pending or threatened against
MedAmicus or any of its Affiliates with respect to the Intellectual Property
used by MedAmicus in, or licensed to Medtronic pursuant to Section 4.4 for, the
manufacture of Product under this Agreement, or any Licensed Intellectual
Property or the use thereof by MedAmicus, either at law or in equity, before any
court or administrative agency or before any governmental department,
commission, board, bureau, agency or instrumentality, or before any arbitration
board or panel. Neither MedAmicus nor any of its officers, directors, employees
or consultants has failed to comply with any law, rule, regulation, writ,
judgment, injunction, decree, determination, award or other order of any court
or other-governmental agency or instrumentality, domestic or foreign, which
failure in any case would in any material respect impair any rights of Medtronic
under this Agreement.
5.2 Representations of Medtronic. Medtronic represents, warrants and
covenants to MedAmicus that:
(a) Medtronic, Inc. is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Minnesota and has
full corporate power to conduct the business in which it is presently engaged
and to enter into and perform its obligations under this Agreement.
10
(b) Medtronic has taken all necessary corporate action under
the laws of the state of its incorporation and its articles of incorporation and
bylaws to authorize the execution and consummation of this Agreement. This
Agreement constitutes the valid and legally binding agreement of Medtronic,
enforceable against Medtronic in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(c) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated herein will violate any
provision of the articles and bylaws of Medtronic or any law, rule, regulation,
writ, judgment, injunction, decree, determination, award or other order of any
court or governmental agency or instrumentality, domestic or foreign, or
conflict with or result in any breach of any of the terms of or constitute a
default under or result in termination of or the creation or imposition of any
mortgage, deed of trust, pledge, lien, security interest or other charge or
encumbrance of any nature pursuant to the terms of any contract or agreement to
which Medtronic is a party or by which Medtronic or any of its assets is bound.
ARTICLE 6
EXPECTATIONS AND QUARTERLY REVIEW
6.1 Reviews. Medtronic may provide regular performance feedback to
MedAmicus and conduct a quarterly review of this Agreement. Upon such review
Medtronic and MedAmicus shall review quality, delivery, lead time, incremental
sales opportunities, an action plan for customer diversification, cost
improvements, the performance of both parties to the conditions of the
Agreement, and the future business direction of the parties. The parties
anticipate the review will be used jointly to address any problems, to initiate
corrective actions plans (where necessary), and to agree upon any necessary
adjustments for the following quarter. Failure to hold a Quarterly review will
not relieve MedAmicus from its obligations under this Agreement.
6.2 Continuous Improvement. Medtronic and MedAmicus may meet at the
beginning of each year to develop a Continuous Improvement plan for the year.
Medtronic and MedAmicus may meet quarterly to review performance to the plan in
the following areas:
(a) Quality. Medtronic and MedAmicus shall work together to
achieve 100% quality performance on all Products. MedAmicus shall maintain an
average lot acceptance rate of no lower than 97% on any Product. If MedAmicus'
lot acceptance rating falls below 97% and is not corrected within 90 days,
Medtronic may terminate this Agreement, in whole or in part. MedAmicus shall
have a closed-loop corrective action system in place.
(b) Total Cost. MedAmicus shall continually work together with
Medtronic to identify and eliminate costs in the fabrication, assembly or
packaging of any currently manufactured Product or subsequently quoted product.
MedAmicus shall furnish Medtronic with an analysis of potential cost savings on
an annual basis beginning one year from the date of this agreements execution.
Potential cost savings which could reasonably be anticipated by process changes
in the following areas:
1) Tooling
2) Raw Materials
3) Method of Production
4) Testing and Inspection
5) Packaging and special handling
6) Assembly and shipping
7) Third Party suppliers
8) Product design and specifications
9) Quantity of components/Products.
11
6.3 Responsiveness. MedAmicus shall provide an initial response to any
Medtronic request related to the appropriate Medtronic employee within one
working day. MedAmicus shall respond to Medtronic Requests for Quote within one
week.
ARTICLE 7
INTELLECTUAL PROPERTY
7.1 Medtronic Intellectual Property.
(a) Medtronic Property. Except as contemplated by Section
7.1(b) below, all tooling, patterns, dies, gauges, jobs, fixtures, and all
specifications, drawings, samples, designs, software, firmware, programs,
formulae, and other items, information and Intellectual Property, including,
without limitation, improvements to any Product furnished by Medtronic to
MedAmicus in connection with this Agreement shall only be used in the
performance of work for Medtronic; and shall remain the property of Medtronic;
and together with all copies thereof shall be disposed of or returned in good
repair, normal wear and tear excepted, by MedAmicus to Medtronic at Medtronic's
direction and expense upon Medtronic's request. MedAmicus assumes risk of loss
and damage to said items while in its possession or under its control. MedAmicus
shall notify Medtronic promptly whenever any items of Medtronic's tangible
property are in need of repair or replacement. Medtronic's property shall be
marked or otherwise adequately identified by MedAmicus as property of Medtronic
for use only under this Agreement and shall be safely stored. MedAmicus waives
any right it may have in law or equity to withhold Medtronic's property.
(b) License Grant. Medtronic hereby grants MedAmicus a
nonexclusive, worldwide fully paid license of the [ * * * ] Technology to use,
manufacture or sell [ * * * ] outside the Field of Use for the term of this
Agreement and any extensions of this Agreement pursuant to Section 9.1 below
(the "[ * * * ] License"). MedAmicus may not sublicense MedAmicus' rights under
the [ * * * ] License.
In consideration for the [ * * * ] License, MedAmicus agrees
to [ * * * ] the [ * * * ] price from [ * * * ] to [ * * * ] per [ * * * ] as
set forth on Exhibit B. In the event that this Agreement terminates, the Parties
agree to use the process set forth in Exhibit C to determine MedAmicus rights
and obligations going forward.
(c) No Other License. Other than as expressly set forth in
this Article 8.1(b), no license to any Medtronic Intellectual Property is
granted herein, and any other Medtronic Intellectual Property disclosed by
Medtronic to MedAmicus hereunder shall be used solely for the purpose of
producing Product for Medtronic hereunder.
7.2 MedAmicus Intellectual Property. No license to any MedAmicus
Intellectual Property is granted herein, except as set forth in Article 4, or
elsewhere in this Agreement.
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification by MedAmicus. MedAmicus shall indemnify, defend and
hold harmless Medtronic and each of its subsidiaries, officers, directors,
shareholders, employees, agents and affiliates (collectively, all such
indemnified persons are referred to in this Section as "Medtronic") against and
in respect of any and all claims, demands, losses, obligations, liabilities,
damages, deficiencies, actions, settlements, judgments, costs and expenses which
Medtronic may incur as a result of any injury, death, property damage, or other
loss or damage (including reasonable costs and legal fees incident thereto)
(collectively "Medtronic Damage"), but only to the proportional extent the
Medtronic Damage arises out of (i) the breach by MedAmicus of any if its
representations, warranties, covenants or agreements contained in this
Agreement, or (ii) any act or omission of MedAmicus, or its agents or employees
resulting in personal injury, except to the extent of injury or damage due to
Medtronic's negligence or fault.
12
8.2 Indemnification by Medtronic. Medtronic shall indemnify, defend and
hold harmless MedAmicus and each of its subsidiaries, officers, directors,
shareholders, employees, agents and affiliates (collectively, all such
indemnified persons are referred to in this Section as "MedAmicus") against and
in respect of any and all claims, demands, losses, obligations, liabilities,
damages, deficiencies, actions, settlements, judgments, costs and expenses which
MedAmicus may incur as a result of any injury, death, property damage, or other
loss or damage (including reasonable costs and legal fees incident thereto)
(collectively "MedAmicus Damage") but only to the proportional extent the
MedAmicus Damage arises out of (i) the breach by Medtronic of any of its
representations, warranties, covenants or agreements contained in this
Agreement, or (ii) any act or omission of Medtronic, or its agents or employees
resulting in personal injury, except to the extent of injury or damage due to
MedAmicus' negligence or fault.
8.3 Third Party Claims. If a claim by a third party is made against any
indemnified party, and if the indemnified party intends to seek indemnity with
respect thereto under this Article 8, such indemnified party shall promptly
notify the indemnifying party of such claim; provided, however, that failure to
give timely notice shall not affect the rights of the indemnified party so long
as the failure to give timely notice does not materially adversely affect the
indemnifying party's ability to defend such claim against a third party. The
indemnifying party shall be entitled to settle or assume the defense of such
claim in accordance with this Article 8, including the employment of counsel
reasonably satisfactory to the indemnified party. Regardless of which party is
controlling the settlement or defense of any claim, (a) both the indemnified
party and indemnifying party shall act in good faith, (b) the indemnifying party
shall not thereby permit to exist any lien, encumbrance or other adverse charge
upon any asset of any indemnified party or of its subsidiaries, (c) the
indemnifying party shall permit the indemnified party to participate in such
settlement or defense through counsel chosen by the indemnified party with all
fees, costs and expenses of such counsel borne by the indemnifying party, (d) no
entry of judgment or settlement of a claim may be agreed to without the written
consent of the indemnified party, and (e) the indemnifying party shall promptly
reimburse the indemnified party for the full amount of such claim and the
related expenses as incurred by the indemnified party pursuant to Article 8.
ARTICLE 9
TERM AND TERMINATION
9.1 Term. The term of this Agreement shall commence on the Effective
Date and, unless terminated earlier in accordance with this Agreement, shall
continue in full force and effect until October 11, 2007. The Agreement may be
extended upon the mutual written agreement of the parties.
9.2 Termination. Notwithstanding the provisions of Section 9.1 above,
this Agreement may be terminated in accordance with the following provisions:
(a) By written notice from MedAmicus to Medtronic in the event
of (i) a breach of any material term of this Agreement by Medtronic that is not
cured within sixty (60) calendar days after receipt by Medtronic of written
notice from MedAmicus specifying the nature of and basis for the asserted
breach; provided, that if such breach cannot reasonably be cured within sixty
(60) days, such breach shall be deemed cured if Medtronic commences to cure such
breach within such 60-day period and diligently thereafter prosecutes such cure,
or (ii) the commencement by or against Medtronic of any bankruptcy, insolvency
or reorganization proceeding which has not been dismissed within sixty (60) days
after commencement; or
(b) By written notice from Medtronic to MedAmicus in the event
of (i) a breach of any material term of this Agreement by MedAmicus that is not
cured within sixty (60) calendar days after receipt by MedAmicus of written
notice from Medtronic specifying the nature of and basis for the asserted
breach; provided, that if such breach cannot reasonably be cured within sixty
(60) days, such breach shall be deemed cured if MedAmicus commences to cure such
breach within such 60-day period and diligently thereafter prosecutes such cure,
or (ii) the commencement by or against MedAmicus of any bankruptcy, insolvency
or reorganization proceeding which has not been dismissed within sixty (60) days
after commencement.
13
9.3 Rights and Obligations on Termination. In the event of termination
of this Agreement for any reason, the parties shall have the following rights
and obligations (in addition to such rights, obligations and remedies they may
have at law and in equity with respect to any breach of this Agreement):
(a) Termination shall not release either party from the
obligation to make payment of all amounts due and payable prior to such
termination.
(b) Upon termination of this Agreement, each party will within
thirty (30) days return to the other all tangible Confidential Information (as
defined in Section 10.1) of the other party (except one copy which may be
retained by legal counsel solely for evidentiary purposes in the event of a
dispute).
ARTICLE 10
MISCELLANEOUS
10.1 Non-Disclosure. Each party agrees not to disclose or use (except
as permitted or required for performance by the party receiving such
Confidential Information of its rights or duties hereunder) any Confidential
Information of the other party obtained during the term of this Agreement until
the expiration of five (5) years after the termination or expiration of this
Agreement. Each party further agrees to take appropriate measures to prevent any
such prohibited disclosure by its present and future Affiliates, employees,
officers, agents, or consultants during the term of this Agreement and for a
period of five (5) years thereafter.
For purposes of this Agreement, "Confidential Information" means
information not generally known or recognized as standard practice, and
proprietary to one of the parties and includes, without limitation, trade
secrets and inventions, information pertaining to research, development, testing
studies, test procedures and results, techniques, designs, dimensions,
configurations, tolerances, specifications, material chemistry and compounding,
information relating to engineering, manufacturing, manufacturing methods,
processes, descriptions of raw materials, acquisitions of supplies, purchasing,
marketing, selling, servicing, customer lists, business methods and strategies,
accounting and licensing, non-public financial information, and other know-how,
trade secrets, and unpublished information disclosed (whether before or during
the term of this Agreement) by one of the parties (the "disclosing party") to
the other party (the "receiving party") or generated under this Agreement,
excluding information which:
(a) was already in the possession of receiving party prior to
its receipt from the disclosing party (provided that the receiving party is able
to provide the disclosing party with reasonable documentary proof thereof);
(b) is or becomes part of the public domain by reason of acts
not attributable to the receiving party:
(c) is or becomes available to receiving party from a source
other than the disclosing party which source, to the best of receiving party's
knowledge, has rightfully obtained such information and has no obligation of
non-disclosure or confidentiality to the disclosure party with respect thereto;
(d) is made available by the disclosing party to a third party
unaffiliated with the disclosing party on an unrestricted basis;
(e) has been independently developed by the receiving party
without breach of this Agreement or use of any Confidential Information of the
other party; or
(f) has been or must be publicly disclosed by reason of legal,
accounting or regulatory requirements beyond the reasonable control, and despite
the reasonable efforts, of the receiving party.
14
All Confidential Information disclosed by one party to the other under
this Agreement shall be in writing and bear a legend "Proprietary,"
"Confidential" or words of similar import or, if disclosed in any manner other
than writing, shall be preceded by an oral statement indicating that the
information is proprietary or confidential, and shall be followed by transmittal
of a reasonably detailed written summary of the information provided to the
receiving party with identification as Confidential Information designated as
above within thirty (30) days.
10.2 Public Announcements. MedAmicus is a public reporting company
under the Securities Exchange Act of 1934. MedAmicus agrees that, at least 48
hours prior to the issuance of a press release or public announcement relating
to this Agreement, MedAmicus will provide Medtronic a draft of the announcement
and the opportunity to comment prior to its scheduled release. Medtronic
acknowledges that MedAmicus may be required to file this Agreement with the SEC
and consents to such filing, so long as MedAmicus uses reasonable efforts to
obtain confidential treatment of appropriate provisions.
10.3 Relationship. The relationship of Medtronic and MedAmicus pursuant
to this Agreement will be that of independent contractors. Neither party has,
and will not, represent that it has any power, right or authority to bind or to
incur any charges or expenses on behalf of the other party or in the other
party's name without the written consent of the other party.
10.4 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and the successors or assigns of the parties
hereto; provided, that (i) the rights and obligations of MedAmicus herein may
not be assigned except to any person who succeeds to substantially all of
MedAmicus' business, and (ii) the rights and obligations of Medtronic herein may
not be assigned except to any person who succeeds to all or a substantial
portion of Medtronic's business to which this Agreement relates. Any attempted
assignment of this Agreement in violation of this Section 10.4 shall be null and
void.
10.5 Entire Agreement. This Agreement and the agreements contemplated
herein constitutes the entire agreement of the parties with respect to the
subject matter of such agreement and supersedes all previous proposals or
agreements, oral or written, including without limitation, the SoloTrak Supply
Agreement dated May 3, 1991 between Medtronic and MedAmicus, including the
addendums dated November 18, 1992, April 9, 1993, August 1, 1995 and September
11, 1996, and all negotiations, conversations or discussions heretofore had
between the parties related to the subject matter of this agreement.
10.6 Governing Law. This Agreement shall be governed by, and
interpreted and construed in accordance with, the laws of the State of
Minnesota, without giving effect to principles of conflicts of laws.
10.7 Survival. All of the representations, warranties, and
indemnifications made in this Agreement, and all terms and provisions hereof
intended to be observed and performed by the parties after the termination
hereof (to the extent specified herein), shall survive such termination and
continue thereafter in full force and effect, subject to applicable statutes of
limitations.
10.8 Amendment, Waiver, Discharge, etc. This Agreement may not be
amended, released, discharged, abandoned, changed or modified in any manner,
except by an instrument in writing signed on behalf of each of the parties to
this Agreement by their duly authorized representatives. The failure of either
party to enforce at any time any of the provisions of this Agreement shall in no
way be construed to be a waiver of any such provision, nor in any way to affect
the validity of this Agreement or any part of it or the right of either party
after any such failure to enforce each and every such provision. No waiver of
any breach of this Agreement shall be held to be a waiver of any other or
subsequent breach.
10.9 Execution in Counterparts. This Agreement may be executed in one
or more counterparts, all of which shall be considered one and the same
agreement, and shall become a binding agreement when one or more counterparts
have been signed by each party and delivered to the other party.
15
10.10 Titles and Headings; Construction. The titles and headings to
Sections herein are inserted for the convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement. This Agreement shall be construed without regard to any presumption
or other rule requiring construction hereof against the party causing this
Agreement to be drafted.
10.11 Benefit. Nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties to this Agreement or
their respective successors or permitted assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
10.12 Notices. All notices or other communications to a party required
or permitted hereunder shall be in writing and shall be delivered personally or
by telecopy (receipt confirmed) to such party (or, in the case of an entity, to
an executive officer of such party) or shall be given by certified mail, postage
prepaid with return receipt requested, addressed as follows:
if to Medtronic to:
Medtronic, Inc.
Cardiac Rhythm Management Central
0000 Xxxxxxx Xxxxxx X.X.
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxx
FAX: 000-000-0000
and to:
Medtronic, Inc.
CRM Legal Dept.
0000 Xxxxxxx Xxxxxx X.X.
Xxxxxxxxxxx, Xxxxxxxxx 00000
if to MedAmicus to:
MedAmicus Incorporated
00000 Xxxxxxx 00 Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxx
FAX: 000-000-0000
with a copy to:
Xxxxxxxxx & Xxxxxx P.L.L.P.
4200 IDS Center
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx Xxxx Xxxxxx
MedAmicus or Medtronic may change their respective above-specified recipient
and/or mailing address by notice to the other party given in the manner herein
prescribed. All notices shall be deemed given on the day when actually delivered
as provided above (if delivered personally or by telecopy) or on the day shown
on the return receipt (if delivered by mail).
10.13 Severability. If any provision of this Agreement is held invalid
by a court of competent jurisdiction, such provision shall be enforced to the
maximum extent permissible and the remaining provisions shall nonetheless be
enforceable according to their terms.
16
10.14 Execution of Further Documents. Each party agrees to execute and
deliver without further consideration any further applications, licenses,
assignments or other documents, and to perform such other lawful acts as the
other party may reasonably request to fully secure and/or evidence the rights or
interests herein.
10.15 Dispute Resolution. The Parties agree that any and all disputes,
claims or controversies arising out of or relating to this agreement shall be
submitted to final and binding arbitration before the Center for Public
Resources. The parties covenant that they shall participate in the arbitration
in good faith, and that they shall share equally in its costs. The provisions of
this Paragraph may be enforced by any Court of competent jurisdiction, and the
party seeking enforcement shall be entitled to an award of all costs, fees and
expenses, including attorneys fees, to be paid by the party against whom
enforcement is ordered. The venue of arbitration shall be in Minneapolis,
Minnesota. The arbitrator shall apply the substantive law of Minnesota law,
other than its arbitration law. The arbitrator will apply federal arbitration
law.
IN WITNESS WHEREOF, each of the parties has caused this Supply
Agreement to be executed in the manner appropriate to each.
MEDAMICUS INCORPORATED MEDTRONIC, INC.
By: /s/ Xxxxx X. Xxxxxxx By /s/ Xxxx X. Xxxxxxxxx
---------------------------------- -------------------------------------
Print Name Xxxxx X. Xxxxxxx Print Name Xxxx X. Xxxxxxxxx
--------------------------- -----------------------------
Title President and Chief Executive Title Vice President/ General Manager
-------------------------------- ----------------------------------
Officer Cardiac Rhythm Management Division
------------------------------------- ---------------------------------------
Date October 11, 2002 Date October 11, 2002
--------------------------------- ----------------------------------
Exhibits:
A Specifications
B Prices
C Process for Determining Royalty Payments Upon Termination of
Agreement
17
EXHIBIT A
SPECIFICATIONS
Lead Delivery Systems:
Medtronic Model 6216
Medtronic Model 6218
Medtronic Model 10600
Introducer Kits:
Medtronic Solo Track Kit
Medtronic Solo Track Kit with Safety Needle
Medtronic PLI Kit
Medtronic PLI Kit with Safety Needle
MedAmicus Premium Kit
Safety Needle:
MedAmicus Safety Needle
MedAmicus Slitter:
MedAmicus Slitter
MedAmicus VIP+
18
EXHIBIT B
PRICES
Slitter [ * * * ]
5-pack Introducer [ * * * ] by [ * * * ] May 2002
Single Introducer Kit [ * * * ] by [ * * * ] May 2002
Premium Kit [ * * * ]
Medtronic Model 6216 production [ * * * ]
Medtronic Model 6218 production [ * * * ]
Medtronic Model 6216 Kit [ * * * ]
Medtronic Model 6218 Kit [ * * * ]
Medtronic Model 10600 [ * * * ]
Safety Needles
Introducer single [ * * * ]
Introducer 5-pack [ * * * ]
MedAmicus VIP+ [ * * * ]
19
EXHIBIT C
PROCESS FOR DETERMINING ROYALTY PAYMENTS UPON TERMINATION OF AGREEMENT
Medtronic recognizes MedAmicus' need to ensure that the license remains
in place even in the event that this Agreement expires or is terminated.
MedAmicus recognizes Medtronic's need for a royalty payment if the Parties are
no longer in a Supplier/Purchaser relationship. Therefore, the Parties agree to
the following process to be used in the event that this Agreement expires or is
terminated:
(1) Representatives of the parties will exchange royalty proposals within 30
days of this Agreement's termination or expiration.
(2) Within 30 days following the expiration of that 30-day period,
representatives of Medtronic and MedAmicus will meet to discuss such royalty
proposals.
(3) If those representatives cannot agree upon royalty during their initial
meeting, the general manager of Medtronic's CRM Therapy Delivery Business or an
equivalent Medtronic executive and a representative of Medtronic's Corporate
Development Group shall meet with the CEO of MedAmicus and another MedAmicus
representative of the CEO's choice to negotiate a royalty.
(4) If these senior management representatives cannot reach an agreement,
Medtronic will have the option to submit the matter to binding arbitration. In
the event that the matter goes to arbitration, Medtronic's Vice President of
Legal-CRM will work with MedAmicus' counsel to agree on an arbitrator; if they
cannot agree, they will each pick an arbitrator, who will work together to pick
a third arbitrator who will handle the negotiation.
(5) Throughout the above process, the parties will use their best efforts to
reach terms.
(6) MedAmicus' license will continue during the negotiation process set forth
above, but royalty payments at whatever rate is determined by negotiation or
arbitration shall be due on sales during the negotiation period.
20
