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Exhibit 10.18
MANUFACTURE AND SUPPLY AGREEMENT
THIS MANUFACTURE AND SUPPLY AGREEMENT is made as of August 4, 2000 (the
"Effective Date,"), by and between Opticon Medical Inc. ("Company"), a Delaware
corporation having its principal place of business at 7001 Post Road, Suite 100,
Dublin, OH 43016, and Medical Elastomer Development, Inc. ("Supplier"), an Ohio
corporation having its principal place of business at 1700 Highland Road, P.O.
Box 1030, Twinsburg, Ohio 44087-9030.
RECITALS
A. The Company has developed and continues to develop certain
proprietary urological and urinary incontinence devices more particularly
described herein. Such devices are the subject of issued and pending U.S. and
foreign patents owned by the Company.
B. Supplier has certain proprietary processes and expertise relating to
the manufacture of medical component parts.
C. Supplier is willing to manufacture and supply to Company, and
Company is willing to purchase from Supplier, component parts of such urological
and urinary incontinence devices, all on the terms and conditions set forth
herein.
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties hereto have agreed as follows:
ARTICLE I
DEFINITIONS
As used herein, the following terms shall have the meanings set forth
below:
1.1 "Affiliate" shall mean any entity controlling, controlled by or
under common control with a party hereto. For purposes hereof, "control" shall
mean ownership, directly or indirectly, of more than fifty percent (50%) of the
securities having the right to vote for election of directors, in the case of a
corporation, and more than fifty percent (50%) of the beneficial interest in the
capital, in the case of a business entity other than a corporation.
1.2 "Agreement" shall mean this Manufacture and Supply Agreement, as
amended from time to time.
1.3 "Confidential Information" shall mean all proprietary information
of a party, regardless of whether disclosed prior or subsequent to the Effective
Date, including without limitation any know-how, specifications, diagrams,
information, data, materials, prototypes or models relating to any of the
markets, customers, suppliers, inventions, products, procedures, designs,
research and development, business plans, financial projections, organizations,
employees or consultants or any other similar aspects of the present or future
business of either party, the secrecy of which confers a competitive advantage
upon that party. The Confidential
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Information of Company shall include, without limitation, the Specifications.
The Confidential Information of Supplier shall include, without limitation, the
Manufacturing Processes (hereinafter defined) used in the manufacture of the
Products.
1.4 "FDA" shall mean the United States Food and Drug Administration.
1.5 "Force Majeure" shall mean an event or condition as described in
this Section 1.5, 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 or which renders the performance of such
obligations so difficult or costly as to make such performance commercially
unreasonable. Force Majeure events or conditions include, without limitation:
governmental action, riots, disturbance, war, strikes, lockouts, slowdowns,
prolonged shortage of energy supplies, shortages of materials not reasonably
within Supplier's control, epidemics, and natural or physical disasters such as
fire, flood, hurricane, typhoon, earthquake, lightning and explosion.
1.6 "Good Manufacturing Practices" ("GMP") shall mean those practices
in the manufacture of medical devices which are recognized as good manufacturing
practices within the United States pursuant to FDA guidelines and international
standards pursuant to ISO 9000 guidelines and other administrative
interpretations and rulings in connection therewith.
1.7 "Manufacturing Processes" shall mean the processes used in the
manufacture of the medical component parts including, without limitation,
molding processes, injection size, shot size, temperature, injection pressure,
injection speed, cure time, molding time, demolding process, closure rate,
vacuum pressure, clamping pressure, injection delays, equipment make and size.
1.8 "Products" shall mean the medical device component parts listed on
Exhibit A and any modifications thereof The parties may amend Exhibit A to
include additional kinds or types of medical device component parts upon mutual
agreement as to specifications, prices and other terms of manufacture and
supply.
1.9 "Specifications" shall mean those dimensional and material
specifications for the Products as are provided by Company to Supplier from time
to time.
ARTICLE 2
DEVELOPMENT, MANUFACTURE AND SUPPLY OF PRODUCTS
2.1 MANUFACTURE AND SUPPLY OF PRODUCTS. Subject to the terms and
conditions set forth in this Agreement, Supplier shall manufacture and sell to
the Company Products ordered by the Company according to the Specifications. The
Products manufactured by Supplier are component parts of medical devices. The
assembly of the Products into medical devices will not be performed by Supplier
and Supplier has no responsibility or liability for such assembly. All
manufacturing of Products. shall be made at facilities owned or operated by
Supplier, and Supplier shall not subcontract any part thereof to any third
party. All Products manufactured hereunder shall meet the Specifications and
shall be manufactured in accordance with Good
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Manufacturing Practices. All Products shall be labeled and packaged in
accordance with Company's reasonable written instructions therefor. During the
term of this Agreement, the Company agrees to (**REDACTED**) purchase of
Products under this Agreement (**REDACTED**) for sale to end users and/or others
(except for design testing), either directly or indirectly through wholesalers,
distributors, or health care providers, worldwide.
2.2 MATERIALS AND PROCESS CHANGES. All materials and processes used by
Supplier shall be approved by Company. The Company shall base its approval or
disapproval of any manufacturing process proposed by Supplier upon the Company's
examination of samples of Products resulting from such manufacturing process.
The Company acknowledges and agrees that the Manufacturing Processes for the
Products are the intellectual property of Supplier exclusively, and that the
Company and/or its Affiliates have no rights in the Manufacturing Processes and
are granted no rights in the Manufacturing Processes by this Agreement or
otherwise. Notwithstanding any other provision of this Agreement, Supplier shall
under no circumstances be required to disclose, transfer or assign the
Manufacturing Processes for the Products to the Company or to any other person
or entity, except that Supplier shall make such disclosures to governmental
authorities as required by such governmental authorities in the course of any
FDA or other governmental regulatory inspections, and Supplier shall be required
to disclose the Manufacturing Processes in regard to the Products to a third
party manufacturer in the event that Supplier is unable to manufacture Products
because of a force majeure event. In the case of such a force majeure event, the
disclosure by Supplier of the Manufacturing Processes to the third party
manufacturer shall be contingent upon such third party manufacturer having first
entered into an agreement, upon terms deemed acceptable by Supplier, which terms
shall include, without limitation, such third party manufacturer's agreement not
to disclose the Manufacturing Processes to any other person or entity,
including, without limitation, the Company, except for disclosures to
governmental authorities required by such governmental authorities in the course
of an FDA inspection. After approval, any changes in materials or Manufacturing
Processes for a Product, and any engineering or other charges or price
increases, shall be subject to the prior written approval of the Company, except
as otherwise provided in this Agreement. Any agreed engineering and other
charges for changes in Manufacturing Processes shall be separately negotiated
and invoiced to the Company. Any changes to the Manufacturing Processes shall
(**REDACTED**) comply with the FDA's Quality System Regulation design review
requirements.
2.3 PURCHASE OF PRODUCTS. Subject to the terms and conditions set forth
in this Agreement, the Company shall, from time to time during the term of this
Agreement, purchase from Supplier (**REDACTED**) Products as provided in this
Agreement.
2.4 FORECASTS. The Company shall provide Supplier with a twelve (12)
month forecast indicating the Company's anticipated purchases of Products during
each month of such period. The first twelve month forecast shall be delivered
within sixty (60) days following execution of this Agreement. During the term of
this Agreement, such forecasts shall be updated by the Company on a quarterly
basis, which updated forecasts must be sent by the Company no later than thirty
(30) days prior to the first day of each succeeding quarter. Such forecasts
shall be on-binding and shall not be deemed to be orders for Products or to
create any minimum purchase
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obligation on the part of Company. Supplier and the Company shall meet annually
to review the annual forecast and forecast process hereunder.
2.5 PURCHASE ORDERS. The Company shall, from time to time, submit
written purchase orders for the purchase of its requirements for the Products,
which shall set forth the quantities ordered, the requested delivery dates,
shipping instructions and shipping addresses. The Company shall be entitled to
use its standard form of purchase order; provided, however that such purchase
orders shall not impose any terms not contained in this Agreement or alter any
of the terms contained in this Agreement. In the event of any conflict between
the terms of any purchase order delivered by Company hereunder and the terms of
this Agreement, the terms of this Agreement shall control.
2.6 ACCEPTANCE OR REJECTION OF PURCHASE ORDERS. Supplier shall
acknowledge the Company's purchase orders in writing and shall be entitled to
reject any purchase orders for quantities greater than 120% of the forecasted
purchase. Any purchase order for quantities equal to or less than 120% of the
most recently updated forecasted purchase shall be accepted by Supplier,
provided that the foregoing shall not limit any right of Supplier to reject a
purchase order under other provisions of this Agreement.
2.7 RIGHT TO TRANSFER MANUFACTURING. Upon termination of this Agreement
or the expiration of its term, the Company shall have the right to transfer the
manufacturing to a facility designated by Company and, subject to the
limitations of Section 2.2, Supplier shall thereupon provide to Company or such
designee all documentation, designs, models, custom tooling and molds, and other
materials relating to the Products that were specifically designed or created
either (a) by the Company, or (b) for the Company by Supplier or third-party
contractors. Supplier agrees to assign and does hereby assign to the Company all
of its right, title and interest in and to such documentation, designs, models,
custom tooling, molds and materials, including all intellectual property rights
therein.
2.8 RIGHTS IN TECHNOLOGY.
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(a) Nothing herein shall be construed to give Supplier any rights
in any patent, copyright, trademark, service mark, trade name, trade secret,
know-how or other intellectual property of the Company in and to the
Specifications, the Products, any modifications or enhancements thereto, or any
work product created under this Agreement or prior agreements (collectively, the
"Company Technology") as such rights exist on the date hereof or as may be
developed or acquired hereafter. The Company acknowledges and agrees that the
Manufacturing Processes for the Products are not Company Technology. Supplier
disclaims any rights in the Company Technology and hereby agrees that except for
the Supplier Technology (as such term is defined below and which definition
includes, without limitation, the Manufacturing Processes for the Products) all
work product, designs, specifications, improvements, inventions and
documentation relating to the Company Technology created by Supplier in its
performance of this Agreement, including any works that may be jointly created
by the Company and Supplier, shall be Company Technology and will be the sole
and exclusive property of the Company. Upon expiration or termination of this
Agreement, Supplier shall cease and desist from use of the Company Technology
for any purpose and in any manner.
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(b) Supplier agrees to assign and does hereby assign the worldwide
right, title and interest in and to all intellectual property rights in Company
Technology developed pursuant to this Agreement including any and all
copyrights, patent rights, trade secret rights and other proprietary rights
therein.
(c) Except as provided in Section 2.7, nothing herein shall be
construed to give Company any rights in any patent, copyright, trademark,
service mark, trade name, trade secret, know-how or other intellectual property
of Supplier (collectively, the "Supplier Technology") as such rights exist on
the date hereof or may be developed or acquired by the Supplier hereafter. The
Company disclaims any rights in the Supplier Technology as it exists on the date
hereof and hereby agrees that the Supplier Technology developed in the course of
Supplier's performance hereunder shall be the sole and exclusive property of
Supplier.
2.9 NOTICE REQUIREMENTS. Supplier shall notify the Company within five
(5) days of Supplier's knowledge of, or receipt of notice regarding, (a) any
defect in or problem with the raw materials used to manufacture the Products,
(b) any failure of Supplier to comply with validated manufacturing practices or
processes, or (c) any failure of Supplier to manufacture Products in conformance
with the Specifications. If a recall of a Product is mandated because of a
failure of Supplier to comply with validated manufacturing practices or
processes, or because of a failure of Supplier to manufacture the Product in
conformance with the Specifications, Supplier shall supply reasonable assistance
to the Company in the Company's recall efforts.
2.10 PAYMENT FOR TOOL AND DESIGN COSTS. The Company shall pay Supplier
for Supplier's tool and design costs as set forth in Exhibit B. During the time
period within 120 days of the Effective Date of this Agreement, the parties may
amend Exhibit B by mutual written agreement. The Company shall provide a fifty
percent down payment to Supplier on the tool and design costs upon the Company's
placement of an order for tooling and shall pay the remaining fifty percent as
set forth in Section 4.2 hereof. If the Company does not order tooling by
November 1, 2000, then, upon such subsequent ordering of tooling by the Company,
Supplier shall provide evidence to the Company of any increase in Supplier's
tool and design costs and the Company shall pay to Supplier an amount for the
tooling and design which is equal to the amount set forth on Exhibit B, plus the
increase in costs.
ARTICLE 3
DELIVERY AND ACCEPTANCE OF PRODUCTS
3.1 DELIVERY. Supplier shall cause all orders of Products to be
delivered F.O.B. Supplier's factory on or before the delivery date set forth in
the applicable purchase order. Title and risk of loss of Products shall pass to
the Company at the time the Products are delivered by Supplier to the carrier
for shipment.
3.2 SHIPPING. The Products shall be shipped to the destination set
forth on the applicable purchase order according to a shipping method specified
by the Company, or if none is so specified, according to Supplier's standard
shipping practices.
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3.3 CERTIFICATION, INSPECTION, ACCEPTANCE AND REMEDIES. Supplier shall
provide such quality and product inspection reports and certification assuring
compliance to the warranties of this Agreement as shall be reasonably requested
by the Company, which shall be in a form acceptable for FDA or other
governmental regulatory submissions. Supplier and the Company shall mutually
establish QA/QC procedures for the Products. The Company shall have the right to
inspect and test the Products at any stage of production at Supplier's
manufacturing facilities at any time upon five (5) days' notice and Supplier
shall provide all reasonable facilities and assistance required for such
inspection and testing of the Products by the Company. Such inspection and
testing shall not unreasonably interfere with Supplier's operations. The
foregoing inspection rights shall not relieve Supplier of its obligations
hereunder to provide inspection reports and certification regarding warranty
compliance. Any product inspection by the Company prior to delivery of the
Products shall not waive the Company's obligation and duty to inspect and accept
or reject the Products upon delivery. The Company shall have the obligation and
duty to inspect each delivery of Products, within 30 days of receipt thereof to
determine whether the Products meet the Specifications and have been
manufactured in accordance with Good Manufacturing Practices. If the Company
determines that any of the Products does not meet such Specifications, was not
manufactured in accordance with GMP, or is adulterated or misbranded within the
meaning of the United States Food, Drug and Cosmetic Act, as amended (the
"Act"), it shall, within such 30 day period, so notify Supplier in writing,
stating the specific failure to comply with the Specifications, GNT or the Act,
shall provide evidence of the failure or defect to Supplier, and shall return
the defective Products (and the remaining lot or delivery) to Supplier, at
Supplier's expense. Supplier agrees to replace, at no cost to the Company, any
Products supplied by Supplier hereunder for which there is evidence showing
nonconformity to the Specifications following inspection by the Company
hereunder, provided that such nonconformity is not due to any act or omission by
the Company, its agents or representatives, or any third party, including,
without limitation, the failure to use, handle, maintain, or store Products as
directed, as labeled or as required by the Specifications. Upon reasonable prior
notice, the Company has the right to audit Supplier to assure conformance to
Specifications and adequacy of GMPs related to the Products, provided such audit
does not unreasonably interfere with Supplier's operations.
ARTICLE 4
PRICE
4.1 PURCHASE PRICE OF PRODUCTS. The purchase price of the Products
shall be as set forth on Exhibit B attached hereto. Notwithstanding the
foregoing, the Company agrees that, following the initial anniversary date of
the Agreement, Supplier may thereafter annually increase the purchase price of
the Products to pass through the cost to it of any increase in the cost of raw
materials. Furthermore, if there is a modification of a Product, then Supplier
shall provide evidence to the Company of any increase in Supplier's costs, and
the Company shall pay to Supplier a price for the Product which is increased by
such costs. Such prices are exclusive of, and the Company shall bear, all taxes,
fees, duties or tariffs which may be levied upon Supplier by any government or
governmental agency by reason of the sale or transport of Products hereunder, or
measured by the value of the Products, other than taxes imposed on Supplier's
net income, taxes imposed by reason of any independent activity of Supplier, and
any penalties or fines imposed on Supplier for any reason.
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4.2 PAYMENT. The purchase price and other costs for Products supplied
hereunder shall be invoiced by Supplier upon shipment. Such invoices shall not
impose any terms not contained in this Agreement or alter any of the terms
contained in this Agreement. In the event of any conflict between the terms of
any invoice delivered by Supplier hereunder and the terms of this Agreement, the
terms of this Agreement shall control. All amounts shall be due and payable 30
days after receipt of invoice. The Company shall pay Supplier the remaining
fifty percent of the tool and design costs for the tooling for a Product no
later than thirty (10) days after the Company's approval of a first article
parts sample meeting Specifications of such Product, or within six months of
sample submission, said samples meeting Specifications to the Company, whichever
is earlier.
ARTICLE 5
WARRANTIES
5.1 COMPLIANCE WITH GOOD MANUFACTURING PRACTICES. Supplier warrants to
the Company that the manufacture of Products supplied hereunder shall be in
strict conformity with Good Manufacturing Practices, and in accordance with the
manufacturing information contained in any FDA or other governmental regulatory
application or approval for the Products.
5.2 REGULATORY REQUIREMENTS. Supplier warrants to the Company that no
Product manufactured by Supplier under this Agreement will be adulterated or
misbranded by Supplier within the meaning of the Act, or comparable governmental
regulatory provisions, or within the meaning of any other applicable law in
which the definition of adulteration or misbranding are substantially the same
as those contained in such Acts as such laws are constituted and effective at
the time of such shipment or delivery.
5.3 PRODUCT SPECIFICATIONS. Supplier warrants to the Company that all
Products manufactured by Supplier shall be in strict compliance with the
Specifications; that is, manufactured to print tolerance, dimensional and
material specifications. Supplier's warranty is to the Company only and shall
extend for a period of twelve (12) months after the Products are shipped from
Supplier's facility.
5.4 DISCLAIMER. THE WARRANTIES SET FORTH IN THIS ARTICLE 5 ARE IN LIEU
OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WHICH ARE HEREBY DISCLAIMED AND
EXCLUDED BY SUPPLIER, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. SUPPLIER'S SOLE
LIABILITY FOR A BREACH OF THE WARRANTIES SET FORTH IN ARTICLE 5 SHALL BE LIMITED
TO THE REPLACEMENT OF ANY DEFECTIVE PRODUCTS OR THE RETURN OF THE PURCHASE PRICE
THEREFOR.
ARTICLE 6
LIMITATIONS ON LIABILITY
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6.1 LIMITATION OF LIABILITY. EXCEPT AS PROVIDED IN ARTICLE 5, SUPPLIER
SHALL NOT BE LIABLE TO THE COMPANY FOR ANY LOSS, EXPENSE OR DAMAGE ARISING OUT
OF OR RESULTING FROM A BREACH OF WARRANTY. IN ANY EVENT SUPPLIER SHALL NOT BE
LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL, OR PUNITIVE LOSS
OR DAMAGES.
ARTICLE 7
INDEMNIFICATION
7.1 INDEMNIFICATION BY SUPPLIER. Supplier hereby agrees to indemnify
and hold harmless the Company, its Affiliates and their respective officers,
directors, employees and agents from and against all liabilities, damages,
losses, costs and expenses (including reasonable attorneys' fees) arising out of
or relating to claims, suits or proceedings brought by a third party alleging
that personal injury or death has resulted solely from the manufacture by
Supplier of Products not in conformance with the Specifications, including,
without limitation, any liabilities caused by negligence, gross negligence or
willful misconduct of or attributable to Supplier in its failure to manufacture
Products in conformance with the Specifications.
7.2 INDEMNIFICATION BY THE COMPANY. The Company hereby agrees to
indemnify and hold harmless Supplier, its Affiliates and their respective
officers, directors, employees and agents from and against all liabilities,
damages, losses, costs and expenses (including reasonable attorneys' fees)
arising out of claims, suits or proceedings brought by a third party alleging
that personal injury or death has resulted from any cause other than the
manufacture by Supplier of Products not in conformance with the Specifications,
including, without limitation, claims, suits or proceedings based upon
negligence, gross negligence or willful misconduct of or attributable to the
Company or any of its Affiliates.
7.3 INTELLECTUAL PROPERTY INDEMNIFICATION.
(a) The Company agrees to defend, hold harmless and indemnify
Supplier against all claims, demands, losses, suits, damages, liability and
expenses (including reasonable attorneys' fees) arising out of any suit, claim
or action for actual or alleged direct or contributory infringement of, or
inducement to infringe, any United States or foreign patent, trademark,
copyright, or industrial design right by reason of the manufacture, use or sale
of any of the Products, including, without limitation, infringement arising out
of compliance with the Specifications.
(b) Supplier agrees to defend, hold harmless and indemnify the
Company against all claims, demands, losses, suits, damages, liability and
expenses (including reasonable attorneys' fees) arising out of any suit, claim
or action for actual or alleged direct or contributory infringement of, or
inducement to infringe, any United States or foreign patent, trademark,
copyright or industrial design right by reason of Supplier's use of the
Manufacturing Processes in regard to the Products.
7.4 PROCEDURE FOR INDEMNIFICATION. Whenever an indemnified party
becomes aware of a claim, suit or proceeding as to which it believes it is
entitled to indemnification under this
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Article 7, it shall give notice in writing to the indemnifying party, shall
permit indemnifying party to assume exclusive control of the defense or
settlement of the matter, and shall provide, at the expense of indemnifying
party, all authority, information and assistance which indemnifying party may
reasonably request for purposes of such defense. An indemnified party may engage
its own counsel, at its own expense, to monitor the defense of any such matter.
In no event shall the indemnified party be entitled to settle any claim as to
which indemnification is sought without the consent of the indemnifying party,
which consent shall not be unreasonably withheld.
7.5 SURVIVAL. The obligations of indemnification, cooperation and
subrogation under this Article 7 shall survive the termination of this Agreement
for any reason.
ARTICLE 8
CONFIDENTIALITY
8.1 NON-USE AND NON-DISCLOSURE. Each party acknowledges and agrees that
all the other party's Confidential Information is confidential and proprietary
to the disclosing party. Each party shall not use or disclose to any third party
the other party's Confidential Information without the other party's prior
written consent for any purpose other than as permitted or required hereunder.
Each party shall take the same reasonable measures necessary to prevent any
disclosure by its employees, agents, contractors, sublicensees, or consultants
of the other party's Confidential Information as it applies to the protection of
its own Confidential Information.
8.2 EXCLUSIONS. Information shall not be considered Confidential
Information hereunder if it:
(a) was already in the possession of the receiving party prior to
its initial receipt from the disclosing party, as shown by
the receiving party's books and records;
(b) is, or becomes, part of the public knowledge or literature
through no fault, act or omission of the receiving party,
provided, information relating to the Products shall not be
deemed to have entered the public domain by reason of having
been filed with any regulatory agency;
(c) is, or becomes, available to the receiving party from a
source other than the disclosing party, which source has
rightfully obtained the same information and has no
obligation of confidentiality to the disclosing party with
respect to it;
(d) is made available on an unrestricted basis by the disclosing
party to a third party unaffiliated with the disclosing
party; or
(e) is required to be revealed by the receiving party pursuant to
law, provided, however, that prior to any such disclosure,
the receiving party shall give reasonable notice to the
disclosing party of such legal requirement and shall
cooperate with the disclosing party in reasonable legal
efforts to seek
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a protective order or to otherwise limit or mitigate any such
revelation so as to preserve the proprietary nature of any
Confidential Information contained therein.
8.3 DURATION: SURVIVING OBLIGATION. Each party's obligations of non-use
and non-disclosure of the other party's Confidential Information shall apply
during the term of this Agreement and shall also survive for a period of five
(5) years after its termination for any reason.
8.4 Supplier acknowledges that it is aware that the U.S. securities
laws prohibit any person who has material nonpublic information about Opticon
from purchasing or selling securities of Opticon, or from communicating such
information to any person under circumstances in which it is reasonably
foreseeable that such person is likely to purchase or sell such securities.
ARTICLE 9
TERM AND TERMINATION
9.1 TERM OF AGREEMENT. Unless terminated as provided in Section 9.2
below, the term of this Agreement shall commence on the Effective Date and shall
continue until a date that is (**REDACTED**) after the first commercial sale of
Products by the Company following government regulatory clearance.
9.2 TERMINATION. This Agreement may be terminated prior to the
expiration of the term hereof as follows:
(a) Either party may terminate this Agreement at any time by
giving notice in writing to the other party if the other
party files a petition of any type as to its bankruptcy, is
declared bankrupt, becomes insolvent, makes an assignment for
the benefit of creditors, goes into liquidation or
receivership;
(b) Either party may terminate this Agreement at any time by
giving notice in writing to the other party if the other
party is in material breach of its obligations under this
Agreement and has failed to cure such breach within ninety
(90) days of the receipt of written notice from the
non-breaching party specifying such breach;
(c) If the Company shall receive a bona fide offer, from a third
party unaffiliated with the Company, to manufacture and
supply a Product to the Company, under the same terms and
conditions as are set forth in this Agreement, except at a
lower price per unit of Product than is then being charged to
the Company by Supplier, the Company shall provide Supplier
with written notice of such bona fide offer, Supplier shall
have ninety (90) days from its receipt of such written notice
in which to notify the Company that it shall manufacture and
supply the Product to the Company
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at such price as is set forth in such bona fide third-party
offer. If Supplier shall fail to so notify the Company, then
the Company may enter into an agreement with such
unaffiliated third party for the manufacture and supply to
the Company of the Product pursuant to the terms and
conditions of the bona fide offer.
(d) The Company may terminate this Agreement upon ninety (90)
days prior written notice to the Supplier if the Supplier
shall have consistently failed to have timely met the
delivery dates for the Products.
(e) The parties may agree in writing to terminate this Agreement
for their mutual convenience at any time and for any reason,
subject to such terms and conditions as they may adopt.
9.3 RIGHTS AND OBLIGATIONS ON TERMINATION. If this Agreement is
terminated for any reason, the parties shall have the following rights and
obligations:
(a) Termination of this Agreement shall not release either party
from the obligation to make payment of all amounts then or
thereafter due and payable; and
(b) The parties' respective rights and obligations under Sections
2.7 and 2.8, and under Articles 5 [Warranties], 6 [Limitation
on Liability], 7 [Indemnification], 8 [Confidentiality], 10
[Dispute Resolution], 11 [Force majeure] and 12
[Miscellaneous] shall survive such termination of this
Agreement.
ARTICLE 10
DISPUTE RESOLUTION
10.1 NEGOTIATION. The parties agree to consult and negotiate in good
faith to try to resolve any dispute, controversy or claim that arises out of or
relates to this Agreement. The parties agree that, except as provided in Section
10.2, neither party will initiate formal dispute resolution under this Agreement
unless and until such party has provided a written statement of the claim to the
other party, and any relevant supporting documentation, and the respective
Presidents or other designated executive officers of the parties shall have met
in person to attempt to achieve such an amicable resolution of such situation;
provided, however, that in no event shall a party be required to delay
initiation of formal dispute resolution hereunder for more than a period of 30
days following such notice.
10.2 RESERVATION FOR LITIGATION. Notwithstanding Sections 10.1 and
10.3, each party expressly reserves the right to seek judicial relief from a
court of competent jurisdiction if the other party is or appears to be in
violation of its obligations of non-use and non-disclosure under Article 8
above, including, without limitation, any injunction or other preliminary relief
Nothing in this Section 10.2 shall preclude a party from also seeking such
interim relief with respect to any disputes or claims arising under this
Agreement as may be available under the AAA rules as provided in Section 10.3.
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10.3 ARBITRATION. Subject to the reservation of the parties under
Section 10.2, all disputes, claims or controversies arising out of or in
connection with this Agreement shall be finally settled under then current
commercial arbitration rules of the American Arbitration Association ("AAA"), as
modified by Section 10.4 below. Judgment upon the award rendered by the
arbitrators may be entered in any court of competent jurisdiction. The place of
arbitration shall be Columbus, Ohio. The arbitration shall be conducted by three
neutral arbitrators selected by mutual agreement of the parties or, if that is
not possible within 30 days of the initial demand for such arbitration, by the
AAA. At least one arbitrator shall have knowledge of and experience in the
medical device industry.
10.4 SPECIAL RULES. Notwithstanding any provision to the contrary in
the AAA rules, the parties hereby stipulate that any arbitration hereunder shall
be subject to the following special rules:
(a) Each party shall have the right to request from the
arbitrators, and the arbitrators shall order upon good cause
shown, reasonable and limited pre-hearing discovery, including
(i) exchange of witness lists, (ii) depositions under oath of
named witnesses, (iii) written interrogatories, and
(iv) document requests;
(b) Upon conclusion of the pre-hearing discovery, the arbitrators
shall promptly hold a hearing upon the evidence to be
presented by the parties and shall promptly render an award
based upon this Agreement and the substantive law of the State
of Ohio applicable to contracts made and to be performed
therein and by the arbitration laws of the United States, and
shall accompany their award with a written explanation of the
reasons for their award;
(c) The arbitrators may not award or assess punitive damages
against either party; and
(d) Each party shall bear its own costs and expenses of the
arbitration and one-half (1/2) of the fees and costs of the
arbitrators, subject to the power of the arbitrators, in their
sole discretion, to award all such reasonable costs, expenses
and fees to the prevailing party.
10.5 SURVIVAL. The duty of the parties to arbitrate any dispute,
controversy or claim under this Article 10 shall survive the termination of this
Agreement for any reason.
ARTICLE 11
FORCE MAJEURE
11.1 NOTICE. Upon giving notice to the other party, the party whose
performance is 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
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amounts due and owing hereunder, but only to the extent and only for the period
that such performance is so affected by the event of Force Majeure. Such notice
shall include a description of the nature of the event of Force Majeure, and its
cause and possible consequences. The party claiming Force Majeure shall promptly
notify the other party of the termination of such event.
11.2 CONFIRMATION. The party invoking Force Majeure shall provide to
the other party confirmation of the existence of the circumstances constituting
Force Majeure. Such evidence may consist of a statement or certificate of an
appropriate governmental department or agency where available, or a statement
describing in detail the facts claimed to constitute Force Majeure.
11.3 SUSPENSION OF PERFORMANCE. 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 part of its obligations hereunder to the extent that such
suspension is commercially reasonable. If the Force Majeure event causes a
suspension of Supplier's performance of its obligations under this Agreement to
(i) manufacture the Products in conformity with the Specifications, or (ii)
fully or timely deliver Products ordered by the Company, then the Company may
make alternative arrangements for the manufacture and supply of the Products for
such period of time that Supplier's performance is suspended. In such event,
subject to the limitations of Section 2.2, Supplier will permit the Company to
temporarily take possession of molds, tooling, drawings and other materials or
documentation necessary to transfer of production of Products to another
manufacturer during such period.
11.4 TERMINATION. Notwithstanding any provision of this Agreement to
the contrary, should the period of Force Majeure continue for more than 120
consecutive days, either party may immediately terminate this Agreement without
liability to the other party, except for payments due to such date, upon giving
written notice to the other party.
ARTICLE 12
GENERAL PROVISIONS
12.1 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties with respect to the subject matter hereof and thereof and
supersedes all the parties' previous correspondence, term sheets,
understandings, agreements and representations, oral or written, between the
parties.
12.2 RELATIONSHIP. The parties are independent contractors and shall
not be deemed to have formed any partnership, joint venture or other
relationship. Neither party shall make, or represent to any other person that it
has the power or authority to make, any financial or other commitment on behalf
of the other party.
12.3 ASSIGNMENT. Neither party shall assign or otherwise transfer its
rights or obligations under this Agreement except with the prior written consent
of the other party; provided that no such consent for a transfer to an entity
shall be required and all rights and obligations arising hereunder shall inure
to the benefit of that entity if it (a) is an Affiliate of
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either party, (b) is the successor in interest of one party by reason of sale,
merger or operation of-law, or (c) has acquired all or substantially all of the
assets and business of a party and has assumed such party's obligations under
this Agreement. Each party shall provide written notice of any such transfer to
such an entity.
12.4 AMENDMENT. This Agreement may not be modified or amended, in whole
or in part, except by a written agreement signed by both parties.
12.5 SEVERABILITY. If one or more of the provisions of this Agreement
is subsequently declared invalid or unenforceable, this Agreement shall be
treated as though that provision were not in this Agreement, and this shall not
affect the validity or enforceability of the remaining provisions of this
Agreement (unless those provisions that are invalidated or unenforceable are
clearly material and inseparable from the other provisions). The Agreement as
modified shall be applied and construed to reflect substantially the good faith
intent of the parties and to achieve the economic effects originally intended by
the terms hereof.
12.6 NOTICES, LANGUAGE. Except as may be otherwise provided in this
Agreement, any notice, demand or request given, made or required to be made
shall be in writing and shall be effective, unless otherwise provided herein,
when received after delivery by (a) certified mail, postage prepaid; (b)
facsimile with electronic confirmation of receipt; or (c) by express mail or a
reputable courier at the addresses set forth on the first page of this Agreement
or to any other address that a party specifies in writing.
12.7 WAIVER. Either party's failure or delay in exercising any remedy
for default shall not be deemed a waiver of that or any subsequent default of
that provision or of any other provision hereof
12.8 COUNTERPARTS. This Agreement shall be executed in two (2) or more
counterparts, each of which shall be deemed an original.
12.9 GOVERNING LAW. This Agreement shall be governed by, and
interpreted and construed in accordance with, the laws of the State of Ohio,
excluding its choice of law rules.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
OPTICON MEDICAL, INC. MEDICAL ELASTOMER DEVELOPMENT, INC.
By By
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Title Title
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EXHIBIT A
PRODUCT LIST
Supplier shall manufacture the following kinds or types of medical device
component parts:
(**REDACTED**)
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EXHIBIT B
PRODUCT PRICES AND TOOL & DESIGN COSTS
(**REDACTED**)
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