THIS AGREEMENT CONTAINS CONFIDENTIAL TERMS WHICH HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
MANUFACTURING AGREEMENT
Annual Renewal
The following constitutes the first annual renewal agreement between IOMED
Clinical Systems, the purchaser, and KWM Electronics Corporation (hereafter
called "KWM"), the supplier, for the ***. This renewal agreement is based upon
the initial manufacturing agreement in effect since November 1, 1995, for the
****.
This renewal agreement will be effective starting November 1, 1996, and shall
remain in force with annual renewals for succeeding years with the agreement of
both parties until canceled. Addendum's may be added for future ****
manufacturing with the agreement of both KWM and IOMED Clinical Systems. This
manufacturing agreement may be terminated by either party with a written notice
of six months.
I. Quantities and Delivery Schedule
1. IOMED Clinical Systems will review its demand at the beginning
of each month, starting November 1, 1996 and will provide to
KWM a six month rolling forecast with the first two months
being a frozen firm commitment and the last four months being
a best estimate forecast.
II. Equipment
1. All equipment provided by IOMED Clinical Systems will be
returned to IOMED Clinical Systems at the termination of this
agreement. Costs to dismantle, crate, and ship the equipment
to IOMED Clinical Systems will be the responsibility of IOMED
Clinical Systems.
2. Unless otherwise agreed to, any modification to IOMED Clinical
System's equipment being used by KWM to **** will be the
responsibility of KWM with notification to IOMED Clinical
Systems of such modifications.
III. Raw Materials
1. IOMED Clinical Systems will plan, purchase, receive, inspect,
pay for, and transfer to KWM the following items custom to the
Phoresor systems in accordance with the IOMED Clinical Systems
forecast:
****
2. The custom inventory, outlined in III. I above, will be
warehoused at KWM. KWM will provide IOMED Clinical Systems
with a monthly report at each month end by part number
outlining quantities on-hand and quantities scrapped.
3. All raw materials and purchasing beyond that outlined in 111.
I will be the responsibility of KWM.
IV. Pricing
1. **** pricing for the year starting November 1, 1996 will be
****.
2. **** pricing for subsequent years will be agreed to
separately, in one year periods, ****. All price increases
must be documented and agreed to by IOMED Clinical Systems as
reasonable and justified.
3. KWM will give IOMED Clinical Systems a minimum of 120 days
notice of any anticipated price increases associated with
manufacturing. Any significant increases in the cost of raw
materials will be brought to the attention of IOMED Clinical
Systems as soon as KWM is aware of the increase. KWM and IOMED
Clinical Systems will negotiate in good faith to determine if
a change to the **** price needs to be made based on changes
in raw materials.
V. Documentation, Specifications and Procedures
1. IOMED Clinical Systems will be responsible for maintaining all
original GMP controlled documentation except the **** for the
**** by KWM.
2. KWM will be responsible for insuring that all **** are ****
according to current applicable FDA GMP requirements using
KWM's workmanship standards and ECO controlled processes.
3. KWM will provide a certificate of compliance with each ****
shipment and test data certifying that the **** have been ****
per the current applicable procedures and that they have been
tested per the current applicable performance criteria. The
certificate will also state the **** meet all specifications
as outlined by IOMED Clinical Systems. All **** rework to
devices must be documented and made a part of the ****.
4. With reasonable advance notice, KWM shall at any time allow
IOMED Clinical Systems or their representative to audit KWM's
documents, records, and manufacturing to review all aspects
for FDA GMP compliance and/or ISO 9001 international
standards.
5. KWM acknowledges the **** is a **** and will maintain original
**** for a period of time equivalent to the design and
expected life of the ****.
6. A copy of all manufacturing procedures, component
specifications, and design changes will be available to IOMED
Clinical Systems for signature approval before release to
production at KWM.
7. IOMED Clinical Systems will specify individual **** parts for
lot tracking by KWM during ****. The designated **** lot
numbers will be tracked from receipt by KWM, through
manufacturing and test, and recorded **** prior to shipment to
IOMED Clinical Systems. Specifically, For the ****, the
following **** require lot tracking by KWM:
****
IOMED Clinical Systems reserves the right to add or delete
**** to those listed above.
8. No specification changes may be made without the prior written
consent of IOMED Clinical Systems. Manufacturing process
changes may be made under KWM's GMP controls, with IOMED
Clinical System's notification and acceptance prior to
implementation. Written notification of all changes will be
made at or prior to shipment of the lot of **** which has the
changes incorporated in it.
VI. Other Terms and Conditions
1. FOB is West Jordan, Utah, USA. ****.
2. All **** products must pass IOMED Clinical Systems QC/QA
inspection, in a timely manner, prior to acceptance and
payment. (See section 1, Payment... above.)
3. All information, documentation, tooling, drawings, schematics,
and assembly procedures that are disclosed to KWM by IOMED
Clinical Systems are to be considered proprietary and
confidential and must not be divulged to any third party
without the prior written consent of IOMED Clinical Systems.
In the event of termination of this agreement, all information
must be surrendered to IOMED Clinical Systems, upon request,
within 30 days. KWM may not use any of IOMED Clinical System's
products for display, advertising, or promotion without IOMED
Clinical Systems prior written consent.
4. KWM may not disclose this OEM arrangement without IOMED
Clinical Systems prior written consent.
5. Acceptance of all purchase orders from IOMED Clinical Systems
will be either written confirmation or acceptance of payment.
6. The cost of process changes, due to IOMED Clinical Systems
product changes, will be reimbursed to KWM at ****. All such
process changes must be approved by IOMED Clinical Systems in
writing and with a separate purchase order issued to confirm
approval and to enable payment.
7. IOMED Clinical Systems may request KWM to perform ****. IOMED
Clinical Systems will advise KWM of specific documentation
requirements for FDA GMP and ISO 9000 compliance. Any further
details and conditions regarding KWM's **** will be subject of
a separate agreement or purchase order.
8. With the exception of product failure caused by design or user
excessive abuse, KWM warrants the IOMED Clinical Systems ****
against defects in workmanship or materials supplied by KWM
for a period of ****.
9. IOMED Clinical Systems will indemnify KWM against any harm
resulting from the **** and IOMED Clinical Systems will supply
proof of liability insurance to this effect prior to any
pre-production or production shipments.
10. Any controversy or claim arising out of or relating to the
contract, or any breach thereof, shall be settled by
arbitration in Salt Lake City, Utah, in accordance with the
Commercial Association Rules of the American Arbitration
Association, and the judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction
thereof.
Approved by IOMED Clinical Systems Approved by KWM Electronics
/s/ X. Xxx Xxxxxx /s/ Xxxxx X. Xxxxx
Executive VP & General Manager Controller
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxx X. Xxxxx
Vice President and CFO President
/s/ Xxx X. Xxxxxxxxxxx, Ph.D.
President and CEO
