EXHIBIT 10.37
TERMINATION AND RELEASE AGREEMENT
This Agreement, effective the 5th day of March, 2001 (the "Effective Date"), by
and between
HemaSure Inc. ("HemaSure"), a Delaware corporation having a principal place of
business at 000 Xxxxx Xxxxx, Xxxxxxxxxxx, XX 00000 and
Gambro, Inc. (formerly known as COBE Laboratories, Inc.), a Colorado
corporation, and its wholly owned subsidiary, Gambro BCT, Inc. (formerly known
as COBE BCT, Inc.), a Colorado corporation having a principal place of business
at 00000 X. Xxxxxxx Xxxxxx, Xxxxxxxx, XX 00000 (together referred to herein as
"Gambro"),
which entities are herein referred to as the "Party(ies)" (in singular or plural
as the context requires), is as follows:
I. Recitals
1.1 HemaSure and Gambro, Inc. entered into an Amended and Restated Exclusive
Distribution Agreement (the "Distribution Agreement") dated as of May 3,
1999; and HemaSure and Gambro BCT, Inc. are parties to agreements dated
November 12, 1997, and December 24, 1997 (together, the "Confidentiality
Agreements").
1.2 The Parties wish to terminate the Distribution Agreement and their
respective obligations thereunder except as set forth herein, but wish to
reaffirm their obligations under the Confidentiality Agreements.
1.3 The Parties are willing to grant to each other certain releases without
admitting or asserting any fault with respect to the Distribution
Agreement and its termination.
NOW, THEREFORE, in consideration of the mutual covenants and commitments set out
herein, each of the Parties agrees to be legally bound as follows:
II. Termination of Distribution Agreement
2.1 Gambro and HemaSure agree that the Distribution Agreement shall be
deemed to have been terminated effective November 21, 2000, and that neither
HemaSure nor Gambro has any further duties thereunder except those warranty and
indemnification obligations as described in Sections 2.8, 2.9, 3.10 (other than
with respect to any loss or claim arising out of the Pall Litigation), 3.11 (but
only with respect to any Products (as defined in the Distribution Agreement)
sold by Gambro on or prior to September 30, 2001) and 3.12 of the Distribution
Agreement, each of which shall survive termination of the Distribution
Agreement.
2.2 In light of the mutual termination of the Distribution Agreement,
HemaSure specifically withdraws its demand for mediation or arbitration of any
issues relating to the Distribution Agreement.
2.3 Each of the Parties (i) reaffirms its obligations to maintain the
confidentiality of the other Party's confidential information and agrees
to continue to be bound by the terms of the Confidentiality Agreements,
(ii) agrees to indemnify the other Party against any damages, prejudice or
adverse effect arising in or resulting from any breach of the
Confidentiality Agreements, whether occurring prior to, on, or subsequent
to the Effective Date, and (iii) agrees to maintain and keep confidential
the existence and terms of this Agreement and all information furnished to
either Party by the other Party in connection with the negotiation of this
Agreement unless and until the other Party consents to the content and
method of such disclosure, which such consent shall not be unreasonably
withheld. The Parties' confidentiality obligations shall not apply to any
disclosure required by law or governmental regulation, by discovery
requests in litigation subject to appropriate protective orders, or by
order of a court having adequate jurisdiction over the Parties.
III. Release and Indemnification
3.1 Each of the Parties, for itself and its Affiliates, their respective
officers, directors, and employees as well as their agents and contractors
(in the aggregate, "Releasors"), does hereby release and forever waive and
discharge, all and any manner of actions, causes of action, suits, debts,
claims or demands of whatever nature, including actions at law or equity
or criminal actions, which Releasors now have or ever may have against the
other Party, its Affiliates, their respective officers, directors, and
employees as well as their agents and contractors (in the aggregate,
"Releasees") arising from or relating to the Distribution Agreement, the
Parties' obligations under the Distribution Agreement or the termination
of the Distribution Agreement except as identified in sections 2.1 and 2.3
above and section 3.2 below; and the Releasors agree to hold the Releasees
harmless against any such claims. "Affiliate" is intended to include any
entity which a Party owns or controls, which owns or controls a Party, or
which is under common ownership or control with a Party.
3.2 Gambro will indemnify HemaSure against any damages (excluding those costs
for which HemaSure is responsible pursuant to section 4.2 below),
prejudice or adverse effect arising in or resulting from the patent
infringement litigation with Pall Corporation (Civil Action No. 99-M-675
(consolidated for all purposes with 00-M-1412) in the United States
District Court for the District of Colorado; and Civil Action No.
CV-99-2350 in the United States District Court for the Eastern District of
New York (together, the "Pall Litigation")) to the extent such damages,
prejudice or adverse effect were caused by Gambro's settlement of claims
by and against Gambro in such litigation without HemaSure's consent. Upon
the execution of an agreement by any entity that acquires HemaSure or
substantially all of its securities or assets, whereby such entity agrees
to be bound by the terms of this Agreement, including the releases and
indemnifications granted by HemaSure herein, Gambro will extend to such
entity the indemnifications it has granted herein to HemaSure.
3.3 HemaSure hereby releases Gambro from any liability arising out of
Gambro's contractual agreements with Pall Corporation except as
specifically identified in section 3.2 above.
IV. Consideration
-------------
4.1 As additional consideration for the releases and indemnifications set
forth herein, for HemaSure's inventory of products bearing Gambro's
company name, and by way of complete resolution of all issues now
outstanding between Gambro and HemaSure, Gambro agrees to return to
HemaSure One Million Eleven Thousand Six Hundred Ninety Two (1,011,692)
shares of HemaSure common stock. Upon receipt of instructions from
HemaSure or its transfer agent, Gambro will deliver share certificates in
its possession evidencing at least the total number of shares to be
returned and HemaSure will cause a new share certificate to be issued
evidencing Gambro's remaining balance of HemaSure common stock.
4.2 HemaSure agrees to accept the shares specified in section 4.1 as full
consideration for the items enumerated in section 4.1 and to bear any
inventory scrap costs, sales and marketing costs, litigation costs (other
than such litigation costs as may constitute damages under sections 2.1
and 3.2 above; provided, however, that the parties hereby agree and
acknowledge that the mere fact that HemaSure may have to bear the
litigation costs associated with the Pall Litigation as a result of Gambro
having settled its dispute with Pall Corporation will not, without some
other wrongful action having been taken by Gambro, provide a basis for an
indemnification claim under section 2.1 or section 3.2 of this Agreement),
as well as any other actual costs which HemaSure may allege arise from the
termination of the Distribution Agreement.
4.3 Neither the payment nor the acceptance of the recited consideration
shall be construed as an admission or accusation of liability by any party, this
Agreement and the releases herein being entered into for the purpose of
obviating the need for costly and lengthy litigation or other dispute resolution
proceedings.
V. Future Relationships
--------------------
5.1 Hemasure represents that following the return of the shares identified
in section 4.1 above, so long as Gambro continues to beneficially own no
less than fifteen percent (15%) of the issued and outstanding shares of
HemaSure's equity securities, Gambro shall be entitled to proportionate
representation on HemaSure Board of Directors, provided, that such
proportionate representation shall in no event entitle Gambro to nominate
less than one director (assuming the 15% threshold is met) nor entitle
Gambro to nominate more than two directors. If at any time there is a
vacancy with respect to one or both of the directors nominated by Gambro,
Gambro shall, within five (5) business days of such vacancy, nominate or
appoint one or two directors, as the case may be, to fill such vacancy or
otherwise lose its rights set forth herein. Notwithstanding the foregoing,
Gambro hereby waives any and all rights to nominate or appoint directors,
including such rights granted to it under this Agreement or under the
Stockholders' Agreement, until the Sale (as defined in Section VI below)
has been consummated or until June 30, 2001, whichever is earlier.
5.2 HemaSure acknowledges that nothing in this Agreement will preclude
Gambro's purchasing at fair market value, or would require Gambro to purchase at
any price, any HemaSure products at any future time.
VII. General Provisions
------------------
6.1 The terms of this Agreement may not be amended except in writing duly
executed with at least the same formality and authorization as the instant
document.
6.2 This Agreement shall be governed by, and construed and enforced in
accordance with, and any arbitration hereunder shall apply, the laws of
the State of New York, without regard to its principles of conflict of
laws.
6.3 If any dispute, difference or question shall arise at any time after the
Effective Date between the Parties in respect of or in connection with
this Agreement, the Parties agree to make a good faith attempt to
negotiate an amicable resolution to any and all such disputes. If any
dispute is not resolved by the Parties within thirty (30) days after
delivery of written notice thereof from a Party to the other Parties
involved with such dispute, prior to commencing a cause of action in any
court of law, the Parties shall submit the dispute to non-binding
mediation in the county where the non-complaining Party has its principal
place of business. The Parties shall use their best efforts to schedule
mediation within thirty (30) days from the date on which the dispute is
submitted to mediation. If the parties in good faith do not settle the
dispute through mediation, any party may file an action in any court of
adequate jurisdiction. Each Party shall pay its own attorney fees and
expenses, except that the mediator's fees shall be split between the
Parties. If a prevailing Party in court is required to initiate
proceedings to enforce the award or confirm judgment, the prevailing Party
shall be entitled to recover its costs and attorney fees associated with
such enforcement action.
6.4 If any provision of this Agreement is held by any court or other authority
having jurisdiction to be invalid or unenforceable under the law
applicable thereto, the provision shall be deemed modified or deleted to
the extent necessary to result in compliance with such applicable legal
provision and this Agreement, as so modified or amended, shall continue in
full force and effect in all other respects.
6.5 Any waiver by either Party of a breach of any provision of this Agreement
or the Confidentiality Agreements shall not be considered as a waiver of
any subsequent breach of the same or any other provision.
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
signed by its duly authorized representatives on the dates indicated below, to
be effective as of the Effective Date irrespective of the dates of execution.
HEMASURE, INC. GAMBRO, INC.
By: /s/ Xxxx X. Xxxxxxx, III By: /s/ Xxxxx X. Xxxxx
------------------------------- ------------------------------
Name: Xxxx X. XxXxxxx, III Name: Xxxxx X. Xxxxx
Title: President and Chief Executive Title: President
Officer
Date: Date:
--------------------------- ------------------------------
Witness/Attest: Witness/Attest:
-------------------- --------------------
GAMBRO BCT, INC.
By: /s/ Xxxxx X. Xxxxx
--------------------------------
Name: Xxxxx X. Xxxxx
Title: President
Date:
------------------------
Witness/Attest:
--------------------
