EXHIBIT 10.16
PRODUCT DEVELOPMENT SERVICES AGREEMENT
THIS PRODUCT DEVELOPMENT SERVICES AGREEMENT (this "Agreement") is made and
entered into as of November 9, 2001, by and between BIOMED RESEARCH, INC., a
Florida corporation ("BIOMED"), and Med Enclosure, L.L.C., a Nevada limited
liability company ("Sponsor").
WITNESSETH:
WHEREAS, BIOMED is engaged in the business of designing medical devices,
managing the pre-clinical and clinical testing of medical devices, and
completing the necessary applications in the process of obtaining U.S. Food and
Drug Administration ("FDA") approval to market medical devices;
WHEREAS, Sponsor has need for such product development services in order to
obtain FDA approval and to market its Product;
WHEREAS, Sponsor desires to engage BIOMED to perform certain product development
services with respect to the Product and BIOMED desires to perform such product
development services for Sponsor, all upon the terms and conditions hereinafter
set forth; and
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Sponsor and BIOMED hereby agree as follows:
AGREEMENT
1. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
1.1 PRODUCT. Product shall mean Sponsor's MEDCLOSE arteriotomy closure
device as described in the Development Plan.
1.2 DEVELOPMENT PLAN. Development Plan shall mean an outline of the product
development services to be performed by BIOMED hereunder set forth on
Exhibit A.
2. SCOPE AND CONDUCT OF SERVICES
2.1 SCOPE OF SERVICES. BIOMED shall provide the product development
services in support of Products as described in the Development Plan
set forth at Exhibit A. In addition, BIOMED will use commercially
reasonable efforts to perform such other services related to the
Development Plan, but not specifically included in the Development
Plan, which may be reasonably requested by Sponsor; provided that
Sponsor shall bear all reasonable costs associated with such other
services.
2.2 CONDUCT OF SERVICES. BIOMED shall use its best efforts to perform the
Development Plan in accordance with the timetable time estimates set
out in Exhibit A. All work shall be performed by BIOMED in a
workmanlike and professional manner, in conformance with best industry
practices, and strictly in accordance with the Development Plan, and
any applicable federal, state and local laws and regulations and
guidelines, including, but not limited to, Title 21 of the Code of
Federal Regulations, International Congress of Harmonization Good
Clinical Practice Guidelines as reported in the Federal Register on May
9, 1997, Good Laboratory Practices, and Design Controls in the Quality
System Regulation if, and as applicable. BIOMED shall cooperate with
any reasonable reviews or audits of BIOMED's activities under this
Agreement by Sponsor or Sponsor's appointee and make available to them
for examination during normal business hours all documentation, data
and information relating to Services. BIOMED shall provide Sponsor with
monthly written status reports during the term of this Agreement.
Sponsor shall have the right to review and approve all draft protocols
for pre-clinical and clinical studies relating to Product prior to
implementation by BIOMED; provided that such review and approval
process with respect to any such study shall not exceed 48 hours.
Sponsor shall have the right to review and approve all draft
submissions to the FDA and any other regulatory entities relating to
Product prior to submission by BIOMED.
2.3 OBLIGATIONS OF BIOMED AND SUB-CONTRACTORS. BIOMED may, subject to
Sponsor's prior written consent, sub-contract part of its obligations
hereunder with a third party. BIOMED shall ensure by written agreement
with each sub-contractor for the benefit of Sponsor, that such
sub-contractor assumes obligations equivalent to those assumed by
BIOMED under this Agreement in particular as regards Sections 2.2
(Conduct of Services), 5 (Record Storage), 6 (Publications), 8
(Confidentiality) and 9 (Work Product and Discoveries). Such agreements
with each sub-contractor will be subject to Sponsor's prior written
approval, which shall not be reasonably withheld or delayed; provided,
however, that BIOMED may redact the commercial terms (e.g., pricing) of
such agreements prior to delivering the agreement to Sponsor for review
and approval.. BIOMED acknowledges and confirms that by sub-contracting
its rights and obligation hereunder it shall not be released from any
of its contractual obligations under this Agreement and that it shall
remain fully responsible for the complete performance of such
obligations under this Agreement. BIOMED shall be solely responsible
for all payments to sub-contractors, and does not have the ability to
bind Sponsor in connection with any agreement or arrangement.
3. FEES AND PAYMENT
Sponsor's sole payment obligations with respect to the services performed under
this Agreement, inclusive of any fees, expenses and other costs are set forth on
Exhibit A under the columns headed "Cost," "Early Bonus" and "On-Time Bonus"
Payments set forth under the heading "Cost" on Exhibit A shall be due and
payable in full only upon the successful completion of prior sequential phase of
the Development Plan, except with respect to the payment corresponding to Phase
I which shall be payable in full within three (3) business days of the execution
of this Agreement by both parties, and the payment corresponding to Phase V,
which shall be payable in three installments due every 90 days commencing upon
completion of Phase N. Amounts set forth under the columns headed "Early Bonus"
and "On-Time Bonus" will accrue only if the corresponding phase of the
Development Plan is completed by the dates set forth under such headings.
Either, but not both, an "Early Bonus" or an "On-Time Bonus" amount may accrue
with respect to each phase of the Development Plan. Accrued amounts set forth
under the columns headed "Early Bonus" and "On-time Bonus" will only become due
and payable upon receipt by the Sponsor of a letter from FDA approving the
marketing of the Product. BIOMED shall be responsible for all costs in
connection with performance of the Development Plan, including travel expenses,
overhead, and other expenses.
4. TERM AND TERMINATION
4.1 TERM. The term of this Agreement shall commence on the date set forth
on the first page hereof and shall continue through the completion of
the Development Plan (the "Termination Date"), unless terminated
earlier by either party in accordance with the terms of this Agreement.
4.2 TERMINATION. If either party breaches any material representation,
warranty or obligation provided hereunder and the breaching party fails
to cure such breach within thirty (30) days of receipt of written
notice of such breach from the non-breaching party, the non-breaching
party shall be entitled to terminate this Agreement immediately upon
expiration of such thirty (30) day period. If this Agreement is
terminated by Sponsor during any phase of the development plan, BIOMED
shall refund to Sponsor within thirty (30) days of the effective date
of such termination, a pro-rata portion of the payment with respect to
such phase based on the number days remaining in such phase (determined
with reference to the total number of days accorded to such phase on
Exhibit A).
5. RECORD STORAGE
Unless otherwise directed by Sponsor, BIOMED shall retain in its archive all
original data and other materials arising out of BIOMED's performance of its
obligations under this Agreement for a period of two (2) years after the date of
marketing approval by the FDA for the Product. At the end of the two (2) year
period referred to above, BIOMED shall return all such data and other materials
to Sponsor unless otherwise directed by Sponsor.
6. PUBLICATIONS
BIOMED and its employees, contractors, consultants and all other contracted
persons and entities shall not make any publication related to the Product or
its product development services hereunder without the express written
permission of Sponsor, but in no event prior to the publication of any patent
for the Product. In the event Sponsor consents to publication by clinical
investigators contracted by BIOMED, BIOMED's agreements with all such clinical
investigators shall be constructed so as to require an opportunity for review
and comment by Sponsor prior to any such publication. All data of a confidential
or trade secret nature will be specifically excluded from such right to publish,
unless otherwise approved by Sponsor in writing.
7. DISCLAIMER OF BENEFITS - INDEPENDENT CONTRACTOR
It is expressly agreed that all services provided by BIOMED and its employees,
agents, or representatives pursuant to this Agreement are performed in BIOMED's
capacity as an independent contractor and its employees, agents, or
representatives are not employees of Sponsor. BIOMED retains the sole right to
hire, discipline, evaluate, and terminate its own employees and to set their
hours, wages, and terms and conditions of employment in accordance with the law
and its obligations hereunder. Consequently, BIOMED's employees, agents, or
representatives are not entitled to and will not receive from Sponsor in
connection with the services hereunder any insurance coverage, pension,
profit-sharing, paid vacation, disability or similar benefits normally provided
by Sponsor to its employees. BIOMED is solely responsible for with respect to
the withholding and payment of taxes for itself its employees, agents, or
representatives, and Sponsor shall have no liability therefore.
8. CONFIDENTIALITY
8.1 CONFIDENTIAL INFORMATION. BIOMED hereby agrees to treat as confidential
any confidential or proprietary information obtained from Sponsor or
generated or created by BIOMED as a result of performing the services
under this Agreement, including but not limited to, data, materials,
equipment, experience (whether of a scientific, technical, engineering,
operational or commercial nature), designs, specifications, know-how
with respect to the Product, product uses, processes, formulae, costs,
financial data, marketing plans and direct selling systems, customer
lists and technical and commercial information relating to customers or
business projections used by Sponsor in its business, whether or not
the subject of any patent or patent application (referred to
hereinafter collectively as "Confidential Information"). BIOMED
recognizes that Confidential Information is the exclusive property of
Sponsor. Consequently, during the term of this Agreement and for 10
years after termination of this Agreement, BIOMED shall not disclose to
any unauthorized person or use in any unauthorized manner the
Confidential Information. Notwithstanding the foregoing, BIOMED may
disclose Confidential Information to its directors, officials,
employees and sub-contractors to the extent necessary for the
performance of the services under this Agreement, provided, however,
BIOMED shall impose upon them the same confidentiality obligation
BIOMED has under this Agreement. In the event of a breach or a
threatened breach by BIOMED of the provisions of this Section 8,
Sponsor shall be entitled to seek an injunction restraining BIOMED from
disclosing, in whole or in part, said Confidential Information and
BIOMED agrees it will not oppose the grant of such injunction on the
grounds that monetary damages are an adequate remedy. Nothing herein
shall be construed as prohibiting Sponsor from pursuing any other
remedies available to Sponsor at law or equity for any such breach or
threatened breach.
8.2 EXCEPTIONS TO CONFIDENTIAL INFORMATION. This obligation of
confidentiality shall not apply to information which:
8.2.1 at the time of disclosure is in the public domain;
8.2.2 after disclosure becomes part of the public domain by
publication or otherwise, other than by an unauthorized act or omission
by BIOMED, its agents, employees, affiliates or subcontractors;
8.2.3 was in the possession of BIOMED at the time of
disclosure and BIOMED promptly notifies Sponsor in writing of such
possession and the circumstances relating to the possession, and was
not acquired directly or indirectly from Sponsor;
8.2.4 becomes known to BIOMED from a third party having (i)
lawful access to such information and (ii) the right disclose the
information without any obligation to Sponsor or Sponsor's affiliates;
or
8.2.5 with Sponsors written permission, may be required for
obtaining essential or desirable authorizations or rights relating to
the Product and the Development Plan from governmental authorities.
8.3 THIS AGREEMENT IS CONFIDENTIAL. BIOMED agrees to keep confidential and
not to disclose to any other person, firm or entity the existence or
contents of this Agreement and discussions hereunder unless Sponsor
gives its prior written consent to such disclosure.
9. Work Product and Discoveries
9.1 WORK PRODUCT. BIOMED hereby grants to Sponsor and Sponsor hereby
accepts, the entire right title and interest of BIOMED now existing, or
which may hereafter arise in and to the Work Product and in and to all
data, information, inventions, discoveries, improvements, designs,
ideas, reports, materials, applications, machines, devices, and the
like developed by BIOMED under this Agreement (hereinafter, the "Work
Product") and all copyrights, trade secrets and other proprietary
rights in or based on the Work Product. BIOMED and Sponsor agree that
if the Work Product or any portion thereof is copyrightable, it shall
be deemed to be a "work made for hire," as such term is defined in the
Copyright Laws of the United States. BIOMED agrees not to disclose the
Work Products to a third party or to use the Work Products for its own
benefit without the prior express written consent of Sponsor. BIOMED
warrants and represents that: (a) all Work Product prepared by BIOMED
and its sub-contractors pursuant to this Agreement will be original
work developed pursuant to this Agreement; (b) any Work Product
prepared by BIOMED pursuant to this Agreement will created solely by
BIOMED and its sub-contractors; (c) any Work Product prepared by BIOMED
and its sub-contractors pursuant to this Agreement, in whole or in
part, or any activity by BIOMED and its sub-contractors under this
Agreement, will not and does not infringe any patents, copyrights,
trade secrets or other proprietary rights of third parties and BIOMED
has received no claims or charges of such infringement by the Work
Product or any portion thereof, and BIOMED has no reason to believe
that the Work Product, in whole or in part, may infringe the patents,
copyrights, trade secrets or other proprietary rights of third parties;
(d) BIOMED has the authority to enter into this Agreement and to
perform all obligations hereunder, including, but not limited to, the
grant of rights and licenses to the Work Product and all data,
documentation, and information, in whatever form, not first produced or
created by or for BIOMED as a result of or related to the performance
of work or the rendition of services under this Agreement, but included
in or necessary for use in or with the Work Product or any portion
thereof, and all proprietary rights therein or based thereon, and that
BIOMED is free to enter this Agreement, and execution of this Agreement
does not violate any ethical or contractual duty to a third party; and
(e) BIOMED has not granted any rights or licenses to third parties
under Work Product or any portion thereof.
9.2 INFORMATION. BIOMED agrees to provide Sponsor with all information,
know-how and materials necessary for Sponsor to obtain and maintain
patents or other rights in the Work Products in ALL AND ALL countries
designated by Sponsor.
9.3 APPROVALS AND FILES. BIOMED agrees that Sponsor does and will own the
full right, title, and interest in and to any government approvals,
associated government files or licenses related to making, using and
selling the Products and Work Products to the full extent possible
under the law of each appropriate country.
10. GENERAL
10.1 NOTICE. Any notice, request, consent or communication under this
Agreement shall be effective only if it is in writing and personally
delivered, sent by certified mail return receipt requested, postage
prepaid, nationally recognized express delivery service with delivery
confirmed or via facsimile with receipt confirmed, addressed as
follows:
If to Sponsor:
MED ENCLOSURE, L.L.C.
0000 00xx Xxxxxx Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxx X. Xxxxxxx, Managing Member, President and CEO
Facsimile: (000) 000-0000
If to BIOMED:
BIOMED RESEARCH, INC.
0000 Xxx Xxxxxxxx
Xxxx, Xxxxxxx 00000 XXX
Attention: Xxxxxxx X. Xxxxxx, President
Facsimile: (000) 000-0000
or at such subsequent address as either party may designate to the other in
writing, and shall be deemed to have been given as of the date when properly set
in accordance with the terms hereof.
10.2 INDEMNIFICATION. Each party (in such case, the "Indemnifying Party")
hereby indemnifies and agrees to defend and hold harmless the other
party and its directors, officers, agents, representatives, employees,
members, successors and assigns (the "Indemnified Parties"), from and
against any and all losses, claims, damages, expenses or fees
(including attorney's fees) arising out of or in connection any actions
by any person, organization or governmental entity or agency as a
result of the performance, breach or nonperformance by the Indemnifying
Party, its agents, affiliates, employees, representatives or assigns of
its obligations or duties under this Agreement, including, but not
limited to such liability, loss or damage resulting from negligence,
willful malfeasance or failure by the Indemnifying Party to perform its
obligations hereunder in compliance with the FDA guidelines and
regulations.
10.3 INSURANCE. At all times during the term of this Agreement, BIOMED will
maintain an insurance policy or policies adequate in amount, as
reasonably determined by Sponsor, to insure BIOMED against liability
associated with its obligations hereunder. Sponsor shall be an
additional named insured on all such policies, shall be entitled upon
request to evidence of such coverage.
10.4 BINDING AGREEMENT. This Agreement shall inure to the benefit of and be
binding on Sponsor, its successors, transferees and assigns, and on
BIOMED, its successors, transferees and assigns.
10.5 WAIVER OF BREACH. The waiver by either party of a default or breach or
the failure by either party to claim a default or breach of any
provision of this Agreement by the other party shall not be or be held
to be a waiver of any subsequent default or breach of the same
provision or of any other provision of this Agreement.
10.6 AMENDMENT. This Agreement cannot be amended, changed, modified or
supplemented in any manner whatsoever, except by another agreement in
writing executed by the parties hereto.
10.7 ASSIGNMENT. Neither this Agreement, nor any of its rights, duties or
obligations under this Agreement may be assigned or otherwise
transferred or delegated by BIOMED without the prior written consent of
Sponsor.
10.8 HEADINGS. The headings of the various sections of this Agreement are
inserted merely for the purpose of convenience of the parties and do
not expressly or by implication limit, define or extend the specific
terms of the section so designated.
10.9 ENTIRE AGREEMENT. This Agreement cancels, merges and supersedes all
prior and contemporaneous understandings and agreements relating to the
subject matter of this Agreement, written or oral, between the parties
hereto and contains the entire agreement of the parties hereto.
10.10 SEVERABILITY. Except as otherwise expressly provided herein, if any
provisions of this Agreement shall be adjudicated to be invalid or
unenforceable in any action or proceeding, whether in its entirety or
in any portion, then such part shall be deemed amended, if possible, or
deleted, as the case may be, from the Agreement in order to render the
remainder of the Agreement and any provision thereof both valid and
enforceable.
10.11 SURVIVAL. The obligations, rights and duties of the parties under
Sections 5, 6, 8, and 9 hereof shall survive the termination of this
Agreement.
10.12 GOVERNING LAW. This Agreement and the rights and obligations of the
parties hereunder shall be subject to, governed by and construed and
interpreted in accordance with, the laws of the State of Florida
without regard to the conflicts of laws principles of such State. Each
party agrees to submit to the jurisdiction of the United States
District Court situated in the State of Florida with respect to any
non-arbitration dispute (as defined below) and with respect to any
action to enforce an arbitration order rendered pursuant to Section
10.13 below.
10.13 ARBITRATION. In the event of any dispute, the senior management of
Sponsor and BIOMED will attempt in good faith to negotiate a mutually
acceptable resolution. Any dispute arising out of or in connection with
this Agreement, other than a dispute concerning Section 6, 8 or 9, with
respect to which a party is seeking specific performance, an
injunction, or other equitable relief (a "non-arbitration dispute"), if
not settled amicably between the parties hereto, shall be finally
settled in accordance with the Commercial Arbitration Rules of the
American Arbitration Association by one (1) arbitrator selected
mutually by the parties. If the parties are unable to agree on an
arbitrator, then each party will select one (1) arbitrator and
arbitrators will then select one (1) arbitrator to hear the dispute.
The arbitrator shall have the power to rule on his own competence and
to give an award having force of law for the parties. The award shall
be madt m writing and shall be final and binding on the parties. The
parties shall undertake to carry out the award without delay. The award
may be made public only with the consent of both parties. The
applicable law shall be the law of the United States and the State
Florida and the place of arbitration shall be, unless otherwise agreed
between the parties, Sarasota, Florida.
10.14 IRREPARABLE HARM. BIOMED agrees that, for any breach of BIOMED's duties
under Paragraphs 6, 8 or 9 of this Agreement, shall result in
irreparable harm to Sponsor, that BIOMED will not interpose lack of
irreparable harm as a defense to any action brought by BIOMED, its
successors or assigns, under this Agreement and that Sponsor, its
successors and assigns, will have the right to obtain injunctive relief
with respect any such breach.
10.15 COMPLIANCE WITH LAWS. Sponsor and BIOMED agree that in the performance
of their duties under this Agreement they will not, directly or
indirectly, violate or assist or cooperate with any other party in
violating any of the provisions of any applicable health, safety,
environmental, export, import, tax, antiboycott, corrupt practices or
other laws of the United States, any state of subdivision thereof.
10.16 FORCE MAJEURE. Neither party shall be in default hereunder by reason of
its delay in the performance of or failure to perform any of its
obligations hereunder if such delay or failure is caused by strikes,
acts of God or the public enemy, riots, incendiaries, interference by
civil or military authorities, compliance with applicable laws, rules
or regulations, inability to secure necessary governmental priorities
for materials, or for any circumstances beyond each respective party's
reasonable control and without its fault or negligence.
10.17 CONFLICTS WITH OTHER LAWS. If any of the terms or provisions of this
Agreement are in conflict with any applicable statue or rule of law
then such terms or provisions shall be deemed inoperative to the extent
that they may conflict therewith and shall be modified to conform with
such statute or rule of law in such forms which most closely reflect
the commercial and mutual intent of the parties under this Agreement.
REMAINDER OF PAGE INTENTIONALLY BLANK
SIGNATURES APPEAR ON THE NEXT PAGE
IN WITNESS WHEREOF, the parties have cause this Agreement to be duly
executed as of the day and year first above written.
THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION, WHICH MAY BE ENFORCED BY
THE PARTIES.
SPONSOR
Med Enclosure, L.L.C.
By: /S/ XXX X. XXXXXXX
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Xxx X. Xxxxxxx
Managing Member, President and Chief Executive Officer
BIOMED
BIOMED RESEARCH, INC.
By: /S/ XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx, President
