SCIVANTA MEDICAL CORPORATION PRODUCT DEVELOPMENT AGREEMENT
EXHIBIT
10.17
SCIVANTA
MEDICAL CORPORATION
This
Product Development Agreement (this “Agreement”) is made by and between Ethox
International, Inc. (“Ethox”), a New York corporation with a principal place of
business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and Scivanta Medical
Corporation (“Scivanta”) a Nevada corporation with a principal place of business
at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, as follows:
| 1. |
Objective
|
Scivanta
is hiring Ethox for the purpose of the engineering and development of the ▇▇▇▇▇▇
Catheter Monitoring System (“HCMS” or the “Product”) as a commercial medical
device using the licensed intellectual property assigned and/or granted to
Scivanta. It is the intent of the parties that Ethox shall be responsible for
engineering of commercial units of the HCMS based upon specifications jointly
determined by Scivanta and Ethox, creation and maintenance of all documentation,
files and paperwork necessary for obtaining United States Food and Drug
Administration (“FDA”) approval, European Medicines Agency (“EMEA”) approval,
and all other governmental and regulatory agency approvals required for
Scivanta’s exploitation of the HCMS.
| 2. |
Scope
and Term
|
Scivanta
hereby appoints Ethox solely and exclusively to perform the work set forth
below
(collectively, the “Proposal”).
| 2.1 |
Management
of project costs and schedule (as set forth on Schedule 2.1 attached
hereto);
|
| 2.2 |
Development
of system functional specifications (“Level I requirements”) based on
marketing inputs (as set forth on Schedule 2.2 attached hereto);
|
| 2.3 |
Development
of disposable catheter specifications (“Level II requirements”) to achieve
functional requirements (as set forth on Schedule 2.3 attached hereto);
|
| 2.4 |
Manufacture
of disposable catheters in accordance with Level I and Level II
requirements for clinical trials, system integration testing and market
launch pursuant to a supply agreement in the form set forth on Exhibit
2.4
attached hereto;
|
| 2.5 |
Provide
regulatory resources for management of clinical submission of marketing
approval from FDA and the EMEA;
|
All
such
work shall be performed in accordance with this Agreement. Any changes in scope
will require a written assessment of impact on cost and schedule and written
approval by both parties in advance of work commencing on such revisions. This
Agreement shall begin upon the execution date set forth below (the “Effective
Date”) and unless sooner terminated by the parties as set forth in Section 25
below, shall remain in effect for two (2) years from Effective Date, unless
otherwise extended by parties; provided, however, that if the application for
approval to market the HCMS (i.e., a 510(k) application) is pending at FDA
at
the time this Agreement would normally expire, then the expiration date shall
be
tolled for that period of time the FDA has such application under review, but
not for longer than six (6) additional months.
| 3. |
Device
/ Design Classification
|
The
device is not yet classified. It is anticipated the device will be classified
as
FDA Class II, pre-market approval 510(k) required.
| 4. |
Design
Control
|
| 4.1 |
Design
control will be in accordance with Ethox standard operating procedure
151.
Product and process requirements will be developed in accordance with
Ethox design control procedures. Ethox represents and warrants that
Ethox’s standard operating procedures (“SOP’s”), design control
procedures, and validation procedures for the term of this Agreement
are
currently, and shall remain, in compliance with all applicable laws,
government regulations, government manufacturing standards including
but
not limited to FDA requirements, International Organization for
Standardization (“ISO”) requirements and other applicable certification
standards. Upon Scivanta’s request, Scivanta or Scivanta’s designee shall
have the right to audit the SOP’s and related procedures to ensure Ethox’s
compliance. In the event that Scivanta’s audit reveals a variation that
renders Ethox’s SOP or other procedures non-compliant, Ethox shall remedy
the variance within a reasonable time period at Ethox’s
cost.
|
| 4.2 |
A
design history file (“DHF”) will be compiled to document the design and
development activities of the Product. Such DHF shall have all of the
detail necessary for each required FDA filing and all other regulatory
filings relating to the Product. All such records shall be retained
and
maintained by Ethox for a minimum of ten (10) years from the execution
date of this Agreement. The DHF will include at a minimum a: a) approved
design and development plan; b) design inputs; c) design outputs; d)
design verification and validation; e) design transfer; f) design control
minutes; g) design change control; and h) pertinent
correspondence.
|
| 4.3 |
The
DHF shall also include laboratory notebooks, engineering study reports,
interim schedules, or other documents related to the design and
development plan.
|
| 5. |
Project
Management
|
Communications
are the key element to coordination of project schedules. This will be a joint
effort with Scivanta and Ethox. The initial project timelines (“Design and
Development Plan”) will be a collaborative effort within the defined scope of
the project. Progress update meetings, held at least weekly, are required to
update the project schedules. These may be held at Ethox in person or via
telephone conference. Ethox's project engineer or project manager will document
all meetings.
Ethox
will, at the discretion of Scivanta, act as the project management agent of
Scivanta for the hardware and software projects associated with this program.
Ethox will coordinate and direct the activities of the subcontractors as
required, including participation in meetings, telephone calls, presentations,
emails, faxes, or other communications to insure timely completion of project
and program tasks.
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| 6. |
Project
Budget/Payment Terms
|
| 6.1 |
Scivanta
shall provide a total of One Hundred Eighty Seven Thousand Five Hundred
Dollars ($187,500) in cash to Ethox as a “Company Partner” cash
contribution defined by and in accordance with the Research Agreement
between the Research Foundation of State University of New York and
Ethox
effective as of June 29, 2007 (the “Foundation Agreement”). This cash
contribution shall be paid by Ethox to the University of Buffalo as
Company Partner cash pursuant to Section 5 of the Foundation Agreement.
Ethox will provide services related to the development of the catheter
component of the HCMS as in-kind company contributions and will pay
expenses in direct support of the project in accordance with the
Foundation Agreement. Ethox will direct the reimbursement of project
costs
expenditures to Foundation according to the budget developed and submitted
for the New York State Office of Science and Technology and Academic
Research Technology Transfer Incentive Program Work Plan. Except as
otherwise provided for in this Agreement, Scivanta shall have no
obligation or liability for reimbursement of Ethox’s expenses related to
this project. Further, unless otherwise agreed, Ethox shall provide
Scivanta with notice of receipt of payments or funds transfers from
Scivanta designated for payment to third parties and shall be responsible
for making Scivanta’s payments to third parties as directed by Scivanta.
Ethox agrees that it shall wire money intended for third parties within
twenty-four (24) hours of the availability of funds from Scivanta.
Further, Ethox shall not have any right to off-set or otherwise reduce
payments made or funds delivered by Scivanta to Ethox that are intended
for third parties.
|
| 6.2 |
To
the extent that other payments are due and owing between the parties,
the
parties agree that payment shall be made to the other party within
thirty
(30) days of receipt of an invoice detailing the amounts due.
|
| 7. |
Design
Validation
|
Scivanta
is responsible for determining the product functions required for clinical
efficacy. Ethox will assist Scivanta to translate and document these product
requirements into system and device specifications for Ethox’s prototyping and
manufacturing. Ethox is responsible for engineering, testing and manufacturing
of prototypes and products to assure functional specifications are met. Ethox
is
further responsible for the completion of all tasks necessary to obtain FDA and
EMEA approval, as well as any other regulatory approval needed for the HCMS.
Scivanta is responsible for clinical testing of prototypes and products to
assure market requirements are met.
| 8. |
Process
Validation
|
All
validation activities (installation qualification, operational qualifications
& process qualifications), as reasonably deemed necessary by Ethox, will be
performed in accordance with Ethox's existing procedures and work instructions
and shall be sufficient for FDA and EMEA qualifications. Scivanta shall have
the
right to overrule Ethox’s determination that a given validation activity is
necessary for the project. Scivanta's written approval, where deemed necessary,
will be required within five (5) business days from Scivanta’s receipt of the
request for such approval. Any delay will result in possible adjustments to
current project/purchase order due dates. Scivanta shall be solely responsible
for any product, equipment, or regulatory non-conformances linked to Scivanta
specified validations. Ethox’s and Scivanta's written approval will be required
for all Scivanta specified validations.
3
| 9. |
Materials
|
Material
selection and specifications are the responsibility of Scivanta. Ethox will
assist in this process as required within the scope of this Agreement. Scivanta
is responsible for all raw material costs. Scivanta approval is required for
any
large minimum buy quantities for raw materials. In case of design change or
project termination, Scivanta is responsible for residual material
costs.
| 10. |
Tooling
|
Any
such
tooling and fixtures under this Agreement that are paid for by Scivanta will
be
the property of Scivanta. Any tooling and fixtures under this Agreement paid
for
by Ethox will remain the property of Ethox. Scivanta shall have the right,
at
any time during the term or after expiration or termination of this Agreement,
to purchase any tooling owned by Ethox and used exclusively to provide the
services hereunder at a price equal to the greater of fair market value (as
determined by a third party selected by Scivanta and acceptable to Ethox at
Ethox’s expense) or book value as recorded by Ethox in its corporate books and
records, in accordance with accounting principles generally accepted in the
United States of America. Upon Scivanta’s request, and at Scivanta’s cost and
expense, Ethox shall pack and ship the purchased tooling and equipment to
Scivanta. All tooling will be assigned a tool number for control within Ethox's
tooling control systems. Periodic calibrations, if required, will be the
responsibility of the owner of the tooling and fixtures. Ethox can provide
calibration services on an "as quoted" basis. Routine maintenance for all
tooling and fixtures at Ethox will be the responsibility of Ethox. Repairs,
refurbishment, or replacement costs due to normal wear and tear will be the
responsibility of the owner. Such repairs, refurbishment, or replacement that
is
due to negligence on the part of Ethox or its employees will be the
responsibility of Ethox. Storage of tooling is the responsibility of Ethox.
If
tooling becomes inactive for a period of twelve (12) months or more, Ethox
reserves the right to charge for such storage or to ship them to the storage
location designated by the owner.
| 11. |
Equipment
|
Ethox
owns and maintains a variety of manufacturing equipment. Ethox personnel will
determine the suitability for use on the project. Any Ethox-owned equipment
used
on the project will remain the property of and responsibility of Ethox
regardless of termination. If additions or modifications are required to
Ethox-owned equipment, the cost for such will be the responsibility of Ethox
and
Ethox will own such additional parts. Ethox agrees that any equipment
modification or addition, or process modification made for the project and
that
is useful or necessary for manufacturing the Product shall be licensed to
Scivanta at Scivanta’s request. Such license from Ethox to Scivanta shall be a
royalty-free, non-exclusive perpetual, worldwide license. Periodic calibrations,
if required, will be the responsibility of the owner of the equipment. Ethox
can
provide calibration services on an "as quoted" basis. Routine maintenance for
all equipment at Ethox will be the responsibility of Ethox. Repairs,
refurbishment, or replacement costs due to normal wear and tear will be the
responsibility of the owner. Such repairs, refurbishment, or replacement that
is
due to negligence on the part of Ethox or its employees will be the
responsibility of Ethox. Storage of equipment is the responsibility of Ethox.
If
Scivanta-owned equipment becomes inactive for a period of twelve (12) months
or
more, Ethox reserves the right to charge for such storage or to ship them to
the
storage location designated by the owner.
4
| 12. |
Facilities
|
Ethox
is
responsible to maintain its facilities in compliance with applicable quality,
statutory and regulatory standards. Costs for facilities maintenance and
repairs, refurbishment, or replacement of equipment necessary to maintain such
compliance are the responsibility of Ethox. In the event that the project
requires additional controls, or supplemental equipment to achieve such
standards, the associated costs will be the responsibility of Scivanta; provided
however, that no additional controls or supplemental equipment will be
implemented without the prior written consent of Scivanta.
| 13. |
Packaging
/ Labeling
|
Scivanta
shall be responsible for the packaging design and integrity of all Scivanta
specified packaging. Scivanta shall be responsible for all labeling content,
adequacy, accuracy, design, integrity, legibility, location/placement, and
claims made in all labeling. Ethox shall provide guidance and assistance to
Scivanta regarding the FDA packaging and labeling requirements and work with
Scivanta to comply with same. Scivanta shall provide written approval for all
artwork masters used to inspect and accept labeling at Ethox. All labeling
will
be inspected and accepted based upon Scivanta approved artwork master. Shipment
of "non-sterile” Product labeled as "sterile" will be in accordance with a
separate non-sterile shipping agreement. Separate non-sterile shipping
agreements will be executed between Ethox and a sterilizer, and sterilizer
and
Scivanta. Ethox to be responsible for storage and inspection of raw materials,
packaging and labeling, unless otherwise specified. Any labeling and/or
packaging deviations, such as over-labeling, shall require Scivanta's written
approval.
| 14. |
Testing
|
“Testing”
means any inspection or laboratory service required for the approval, acceptance
and release of raw materials or finished goods, up to and including testing
relating to design validation, incoming inspections, quality assurance, quality
control and sterility / packaging assurance.
Ethox
provides a range of testing services for the purpose of incoming acceptance,
shelf-life expiration dating, sterility assurance and biocompatibility of
medical devices. So long as such testing services are available through the
Ethox Laboratory Services Department or Quality Control Department, Ethox will
provide such services to the Scivanta in accordance with the terms and
conditions of this Agreement. It shall be the responsibility of the Ethox to
organize and execute all requested testing service(s) that are offered to
Scivanta. If a laboratory test is unavailable through Ethox Laboratory Services
Department or Quality Control Department, Scivanta may direct Ethox to utilize
an outside vendor. However, it is the sole responsibility of Scivanta to
identify the vendor for such services and to accept all related charges
associated with testing. Scivanta may also choose an Ethox pre-approved vendor
for such services. Scivanta will be responsible for the reimbursement of all
costs to Ethox for the coordination and execution of such testing services.
Ethox, if contracted to do so, will execute the applicable requested testing
services at the assigned price to Scivanta and to the applicable industry
guidelines, standards, requirements and regulations. Scivanta agrees to make
available the required material and/or finished goods to complete the requested
testing and all cost shall be the responsibility of Scivanta, unless otherwise
agreed to.
5
Testing
requiring the preparation of a study protocol and final report will require
written approval by Scivanta, confirming review, understanding and acceptance
of
the conditions provided. Ethox will not execute any studies without Scivanta's
approval. Samples submitted for testing purposes will be destroyed by Ethox
at
the conclusion of the test, unless Scivanta provides Ethox with written
instructions for special disposal. Costs of disposal beyond general landfill
will also be the responsibility of Scivanta in addition to all associated costs.
Samples requiring the return to Scivanta following the completion of all testing
must be done so by written request. Scivanta shall incur all costs associated
with sample return including but not limited to disinfecting, sterilization,
packaging and shipping.
| 15. |
Sterilization
|
“Sterilization”
means the process by which all viable forms of microorganisms are destroyed.
Processes include ethylene oxide (“EO”, “ETO”), gamma, electron beam (“E-beam”),
steam, dry heat, and chemical sterilization.
Ethox
provides EO sterilization services for the purpose of applying a sterility
assurance level as required for the release and sale of medical devices. Ethox
will provide such services at the request of Scivanta. It shall be the
responsibility of Ethox to organize and execute all requested sterilization
service(s) that are offered to Scivanta. If the method of process is unavailable
through Ethox, Scivanta may direct Ethox to utilize an outside vendor. However,
it is the sole responsibility of Scivanta to identify the vendor for such
services and to accept all related charges associated with sterilization
processing. Scivanta will be responsible for the reimbursement of all costs
to
Ethox for the coordination and execution of such services. Where undertaken
by
Ethox, Ethox will execute the applicable requested sterilization services at
the
assigned price to Scivanta and to the applicable industry guidelines, standards,
requirements and regulations (See Equipment for ownership and responsibilities).
Scivanta agrees to make available the required material and/or finished goods
to
complete required validation and routine sterilization, and all cost shall
be
the responsibility of Scivanta.
Sterilization
validations require the preparation of a study protocol and final report and
require written approval by Scivanta, confirming review, understanding and
acceptance of the conditions provided. Ethox will not execute any validation
studies without Scivanta's approval. It shall be the responsibility of Scivanta
to initiate and maintain all annual or quarterly (if applicable) required
validation activity.
| 16. |
Prototypes
|
A
prototype or sample will be labeled as "Non-Sterile Sample, Not for Human Use"
on the unit package. Clinical use prototypes will be manufactured and labeled
in
accordance with applicable regulations regarding the manufacture, use, and
traceability of such devices.
| 17. |
Quality
System And Regulatory Audits
|
Ethox
agrees to manufacture products in accordance with applicable laws and
regulations, including but not limited to FDA Quality System Requirements,
ISO
13485, and other applicable quality system requirements Ethox deems necessary
to
hold and/or certify.
6
Scivanta
has the right to conduct audits of Ethox’s related facilities and systems from
time to time to ensure compliance. Such audits must be scheduled with Ethox's
personnel with reasonable notice (twenty (20) days requested). An advance copy
of the audit checklist is also requested to facilitate a timely audit.
| 18. |
Regulatory
/ Marketing Compliance
|
The
parties agree and acknowledge that Scivanta is hiring Ethox for the purpose
of
engineering the Product to Scivanta’s specifications and assisting Scivanta in
obtaining FDA and EMEA approvals as well as any other necessary regulatory
approval for the Product. Scivanta is legally responsible for each and all
regulatory applications, filings, submittals, and documentation required to
legally market, advertise, or otherwise sell or distribute the Product. Ethox
shall be contractually responsible for the preparation and filing of all such
regulatory documentation on behalf of Scivanta in accordance with the terms
and
conditions of this Agreement.
Ethox
provides regulatory services for the purpose of applying for the release and
sale of medical devices. Ethox will provide such services in accordance with the
terms and conditions of this Agreement. It shall be the responsibility of Ethox
to organize and execute such service(s) that are offered to Scivanta as set
forth in this Agreement or otherwise offered to Scivanta by Ethox hereunder.
If
the method of process is unavailable through Ethox, Scivanta may direct Ethox
to
utilize an outside vendor. Scivanta may also choose an Ethox pre-approved vendor
for such services. However, it is the sole responsibility of Scivanta to
identify the vendor for such services and to accept all related charges
associated with the outside vendor. Scivanta will be responsible for the
reimbursement of all costs to Ethox for the coordination and execution of such
services. If undertaken by Ethox, Ethox will execute the applicable services
at
the assigned price to Scivanta pursuant to a quote or contract, and to the
applicable industry guidelines, standards, requirements and regulations.
Scivanta agrees to make available the required material and/or finished goods
to
complete required testing, and all cost shall be the responsibility of Scivanta,
unless otherwise agreed to.
| 19. |
Change
Control
|
“Change
Control” means procedures for identification, documentation, review, validation
and/or verification, and approval of changes to documents, processes, or designs
so as to establish and document the applicable development
activities.
| a. |
General.
All changes to product, processes, components, labeling & packaging,
equipment, and all associated documentation, such as specifications,
drawings, Device Master Records, artwork masters, shop travelers and
work
instructions, will be processed in accordance with Ethox's current
change
control procedures and work instructions.
|
Scivanta
is responsible for reviewing and evaluating impact of change(s) on the
following: regulatory submissions/pre-market notification (510K impact); sales
literature; Product in the field; safety & effectiveness; biocompatibility.
All drafts and proposals submitted to Scivanta pursuant to this Section 18
shall
be deemed “Information” subject to the limitations regarding disclosure and use
set forth in Section 26 hereof.
Ethox
is
responsible to review and evaluate each change's impact on validation or
re-validation. Refer to the Design Validation and Process Validation sections
of
this Agreement if a determination that validation or re-validation is required.
7
| b. |
Scivanta
Request for Change. Scivanta's change request shall be signed by an
officer of Scivanta and submitted to the Ethox Project Manager. Ethox's
Engineering Department will evaluate Scivanta's change requests and
determine Ethox Requirements and provide approval for each proposed
Scivanta change. Ethox will provide Scivanta with an implementation
schedule, plan, costs and any additional items required to implement
change. If requested by Scivanta, Ethox will provide a copy of the
approved change document after implementation at Ethox.
|
| c. |
Temporary
Changes. Temporary changes will be processed in accordance with Ethox’s
current non-conforming material/process procedures and work instructions.
Scivanta’s written approval is required for all temporary changes prior to
implementation.
|
| d. |
Cost
Impact. Ethox will provide quotes to Scivanta for any changes impacting
unit price (change to process, material, sterilization, etc.), and/or
residual charges (obsolescence), and/or purchase order cancellations.
Scivanta will provide a revised/new purchase order within five (5)
business days from receipt of quote. Any delay will result in production
and/or project stoppage until receipt of the purchase order.
|
| e. |
Change
Approval. Changes initiated by Ethox affecting form, fit, or function,
require Scivanta's prior written approval. Scivanta will provide written
approval within five (5) business days from receipt. Any delay in
Scivanta’s approval may result in possible adjustments to project or
applicable purchase order completion dates.
|
| f. |
Schedule
Impact. Ethox will review each change's impact on current orders and
provide Scivanta with an effective date for the implementation of each
change. If Scivanta requires an immediate change, Ethox will evaluate
the
impact on project/manufacturing schedule and provide Scivanta with
revised
due dates accordingly.
|
| 20. |
Force
Majeure
|
No
liability shall result to either party from delay in performance or from
non-performance caused by circumstances beyond the control of the affected
party, including, but not limited to, acts of God, fire, flood, explosion,
war,
acts of terrorism, governmental action or inaction or request of governmental
authority, accident, strike, lockout; but each of the parties shall be diligent
in attempting to remove such cause or causes and shall promptly notify the
other
party of its intent and probable duration. If the non-performing party who
has
delayed performance or not performed because of circumstances beyond its control
is unable to remove the cause within thirty (30) days or if removal of the
cause
cannot reasonably be accomplished in thirty (30) days, has not commenced removal
and diligently thereafter pursued such removal, and such cause has not been
removed within ninety (90) days, the other party shall have the right to
terminate this Agreement or any portion of it without penalty, except for any
provisions which survive the termination of this Agreement pursuant to Section
29 hereof, but subject to both parties’ obligations as a Recipient set forth in
subsection 27.
8
| 21. |
Indemnification
|
| a. |
Ethox
shall indemnify, defend and hold harmless Scivanta and its affiliates
and
their officers, directors and employees from and against any and all
claims, losses, damages, judgments, costs, awards, settlements, expenses
(including reasonable attorneys’ fees) and liabilities of every kind
(collectively, "Losses") arising directly out of or resulting directly
from: (a) any breach by Ethox of any of its warranties, guarantees,
representations, obligations or covenants contained herein; (b) any
negligence or intentional acts or omissions by Ethox or its employees,
and/or agents; (c) any actual or alleged infringement by Ethox of any
patent, copyright, trade secret or other intellectual property right
or
other proprietary right of any third party in connection with the
provision of services to Scivanta under this Agreement; (d) any product
liability claim arising out of or relating to defects in Ethox’s or its
employees and/or agents, workmanship, engineering or DHF documentation
in
regard to the Products and (e) any claim arising out of or relating
to
federal, state and local taxes or contributions imposed or required
under
unemployment insurance, social security and income tax laws with respect
to the performance of services by Ethox under this Agreement. Scivanta
will give Ethox prompt notice of any such claim and will cooperate
with
Ethox, at Ethox’s expense, in the defense of the claim. While Ethox will
have sole control over the defense, Ethox may not settle the claim
in the
name of Scivanta without Scivanta’s prior written consent, which Scivanta
will not unreasonably withhold.
|
| b. |
Scivanta
shall indemnify and hold harmless Ethox and its Affiliate and their
officers, directors and employees from and against any and all Losses
arising directly out of or resulting directly from (a) any breach by
Scivanta of any of its obligations or covenants contained herein; (b)
any
negligence or intentional acts or omissions by Scivanta or its employees,
and/or agents; (c) any actual or alleged infringement by Scivanta of
any
patent, copyright, trade secret or other intellectual property right
or
other proprietary right of any third party in connection with the
Products; and (d) any product liability claim arising out of or relating
to defects in the design or function of the Products hereunder.
|
| c. |
At
Scivanta’s expense, Scivanta will defend, indemnify and hold harmless
Ethox and its Affiliates and their officers, directors and employees
from
any Losses arising directly out of or resulting directly from any claim
that (a) the design or manufacture of any of the Products using the
intellectual property assigned and/or granted to Scivanta, other than
the
use of any intellectual property provided to Scivanta by Ethox (b)
any
engineering or manufacturing processes Scivanta directs Ethox to use,
or
(c) any materials or components required by Scivanta to be used in
or with
the Products, infringes any third party’s patent, copyright, trade secret
or any other intellectual property right. Ethox will give Scivanta
prompt
notice of any such claim after Ethox learns of it and will cooperate
with
Scivanta, at Scivanta’s expense, in the defense of the claim. While
Scivanta will have sole control over the defense, Scivanta may not
settle
the claim in the name of Ethox without Ethox’s prior written consent,
which Ethox will not unreasonably withhold.
|
| d. |
In
the event of an infringement claim described above, Ethox may stop
production of the applicable Products immediately pending adequate
assurances from Scivanta of Scivanta’s ability to meet the on-going
indemnity outlined above.
|
| e. |
Scivanta
shall also indemnify and hold harmless Ethox and its Affiliates and
their
officers, directors and employees from and against any and all Losses
arising directly out of or resulting directly from any claim regarding
the
claims and clinical efficacy of the device in any of its instructions
or
literature, and any injury or claim as a result of the realization
of
product design for the purposes of clinical use, except to the extent
that
such product design was based on intellectual property provided to
Scivanta by Ethox.
|
9
| f. |
Each
indemnified party agrees to give the indemnifying party prompt written
notice of any matter upon which such indemnified party intends to base
a
claim for indemnification (an "Indemnity Claim"). The indemnifying
party
shall have the right to participate jointly with the indemnified party's
defense, settlement or other disposition of any Indemnity Claim. With
respect to any Indemnity Claim relating solely to the payment of money
damages and which could not result in the indemnified party's becoming
subject to injunctive or other equitable relief or otherwise adversely
affect the business of the indemnified party in any manner, and as
to
which the indemnifying party shall have acknowledged in writing the
obligation to indemnify the indemnified party hereunder, the indemnifying
party shall have the sole right to defend, settle or otherwise dispose
of
such Indemnity Claim, on such terms as the indemnifying party, in its
sole
discretion, shall deem appropriate, provided that the indemnifying
party
shall provide reasonable evidence of its ability to pay any damages
claimed and with respect to any such settlement shall have obtained
the
written release of the indemnified party from the Indemnity Claim.
The
indemnifying party shall obtain the written consent of the indemnified
party, which shall not be unreasonably withheld, prior to ceasing to
defend, settling or otherwise disposing of any Indemnity Claim if as
a
result thereof the indemnified party would become subject to injunctive
or
other equitable relief or the business of the indemnified party would
be
adversely affected in any manner.
|
| 22. |
Representations
And Warranties
|
| a. |
Ethox
warrants that the Products engineered, manufactured and/or assembled
for
Scivanta under this Agreement will be, at the time of delivery to
Scivanta, free from any liens or other defects in title, will conform
to
Scivanta’s specifications, and will be free from material defects in
workmanship (and materials, if Ethox is responsible for procuring
materials from its own sources) under normal use and service. Ethox
warrants that the work shall be in accordance with Scivanta specifications
and work instructions. Ethox represents and warrants that it is duly
organized, validly existing and in good standing under the laws of
the
State of incorporation and that this Agreement has been duly authorized,
executed and delivered by Ethox. Ethox represents and warrants that
the
terms of this Agreement and its performance of the services hereunder
will
not breach or conflict with any agreement or other obligation by which
Ethox is bound. Ethox will not, however, be responsible for, and this
warranty will not apply to, any defects in the Products arising out
of
design or specification or the use of materials or components that
Scivanta furnished to Ethox or directed Ethox to use. A claim under
this
warranty must be made by Scivanta in writing within twelve (12) months
from the date of delivery of the applicable unit(s) of Product. Ethox
may
fulfill its obligation to Scivanta under this warranty, and Scivanta’s
sole remedy hereunder shall be, as
follows:
|
| i. |
Ethox
will repair or replace without charge to Scivanta any unit of the Products
found to be defective within the terms of this warranty if Scivanta
returns it, freight prepaid, to Ethox. Repaired or replaced Product
will
carry this same warranty for the balance of the warranty
period.
|
| ii. |
Ethox
will not be required to ship replacement Products until Ethox has
confirmed through examination that the returned unit(s) is defective
within the terms of this warranty. Such examination shall be completed
by
Ethox within fourteen (14) days of receipt of the returned unit(s).
If
such examination is not completed within fourteen (14) days, returned
product shall be deemed defective and Ethox must repair or replace
the
unit(s) without charge to Scivanta in accordance with Section 21.1.1,
above. Ethox will pay freight costs to ship any repaired or replacement
unit(s) to Scivanta.
|
10
| iii. |
This
warranty does not apply to any defect attributed to purchased components
specified by Scivanta, or to any unit(s) of Product which Ethox reasonably
determines has been subjected by a party other than Ethox to (i) operating
or environmental conditions beyond those normally expected for the
Product
based upon the materials specified; or (ii) improper application, improper
maintenance or repair, improper installation, alteration, accident
or any
other negligent act or omission in use or
handling.
|
| iv. |
Units
of Product returned to Ethox which Ethox reasonably determines are
not
defective within the terms of this warranty will be returned to Scivanta,
and Scivanta will reimburse Ethox upon invoice for return transportation
charges and Ethox’s normal hourly charge applicable to inspection of the
unit.
|
| v. |
Purchased
components of the Products specified by Scivanta are warranted only
to the
extent, and subject to the terms of the original warranty given by
the
manufacturer to Ethox. To the extent assignable Ethox shall assign
such
warranties to Scivanta. Ethox’s sole obligation with respect to such
components shall be, at Scivanta’s expense, to prosecute on behalf of
Scivanta all warranty claims against such component manufacturers upon
receipt of written authorization of
Scivanta.
|
REMEDIAL
ACTION AS PROVIDED HEREIN SHALL CONSTITUTE FULFILLMENT OF ALL LIABILITIES OF
ETHOX TO SCIVANTA AND SCIVANTA’S SOLE REMEDY HEREUNDER, WHETHER BASED ON
CONTRACT, TORT, OR OTHERWISE. UNDER NO CIRCUMSTANCES WILL ETHOX BE LIABLE FOR
REPROCUREMENT COSTS, LOST REVENUES OR PROFITS, OR FOR ANY INDIRECT, SPECIAL,
INCIDENTAL, ECONOMIC OR CONSEQUENTIAL DAMAGES, EVEN IF THEY WERE FORESEEABLE
OR
SCIVANTA HAD INFORMED ETHOX OF THEIR POTENTIAL.
| b. |
EXCEPT
FOR THE WARRANTIES SET FORTH IN THIS SECTION 21, ETHOX MAKES NO OTHER
WARRANTY OR REPRESENTATION OR ANY OTHER STATEMENT, PROMISE, WARRANTY.
EXCEPT FOR FDA AND EMEA COMPLIANCE, SCIVANTA ACKNOWLEDGES IT HAS NOT
RELIED UPON ANY STATEMENT OF ETHOX OR ANY EMPLOYEE, AGENT, OR
REPRESENTATIVE THEREOF IN RESPECT OF THE PRODUCTS HEREUNDER. COMPLIANCE
WITH THE LAW, CODES, AND REGULATIONS RELATING TO THE USE OF THE PRODUCTS
REMAINS THE SOLE RESPONSIBILITY OF
SCIVANTA.
|
| c. |
Scivanta’s
exclusive remedies with respect to Ethox’s performance or non-performance
under this Agreement are those expressly stated in this Agreement and
except as expressly stated in this Agreement, Ethox will not be liable
for
any damages claimed by Scivanta based upon any third party claim.
|
11
| 23. |
Limitation
Of Liability
|
Scivanta
will be solely responsible for all third party intellectual property
infringement claims and liability claims related to the design, specifications,
use, functionality, and safety of the Products manufactured and/or assembled
by
Ethox hereunder, except for personal injury claims based upon defects in Ethox’s
workmanship, engineering, manufacture and/or FDA, EMEA and other regulatory
compliance tasks under this Agreement. In this regard, Scivanta will defend
Ethox from any and all such claims, and indemnify and hold Ethox, its
affiliates, directors, officers and employees harmless from all Losses arising
from or as a result of such claims. The indemnifying party’s liability under
this Section is further subject to the provisions of Section 21
hereof.
| 24. |
Non
Assignability
|
Ethox
may
not assign this Agreement nor delegate performance of its duties or obligations
hereunder without the written approval of Scivanta, except to an individual
or
entity purchasing all or substantially all of its assets used in the performance
of its obligations hereunder; provided, however, that no such assignment may
be
made by Ethox to any party that is or controls or is under common control with
a
distributor or wholesaler of cardiac monitoring equipment without the written
consent of Scivanta. Sale or issuance of shares of Ethox shall not be considered
an assignment hereof to the purchaser of such shares, unless the proposed sale
or issuance of shares of Ethox in any amount of shares exceeding 25% of the
then
outstanding shares of Ethox is to be made to a party or parties controlling
or
under common control with a business distributing cardiac monitoring equipment.
Any attempted assignment or delegations in violation of this Section shall
be
deemed null and void and of no force and effect. Scivanta may assign this
Agreement, in whole or in part, without limitation.
| 25. |
Restrictive
Covenants
|
| a. |
No
Solicitation. During the term of this Agreement and for a period of
twelve
(12) months thereafter, each party agrees that it shall not, directly
or
indirectly, hire, employ, recruit or solicit for employment any person
who
is now an employee of the other or hereafter becomes an employee of
the
other for a period of one hundred-eighty (180) days following the
termination of employment of such person.
|
| b. |
No
Competition. During the term of this Agreement and for a period of
twelve
(12) months thereafter, Ethox shall not on its own or on the behalf
of
others, design, develop, create, produce or assist in the design,
development, creation or production of a double-balloon catheter to
be
used as part of a cardiac monitoring system.
|
| 26. |
Termination
|
| a. |
Either
party shall be in default of this Agreement if such party:
|
| i. |
fails
to perform any provision of this Agreement in any material respect;
or
|
| ii. |
becomes
insolvent or makes an assignment for the benefit of creditors, or a
receiver or similar officer is appointed to take charge of all or part
of
that party’s assets.
|
12
In
the
event of a default, the non-defaulting party may terminate the Agreement and
any
outstanding orders if the other party has failed to cure such default within
thirty (30) calendar days after its receipt of a notice of default and intent
to
terminate (or fifteen (15) calendar days in the case of non-payment of money
due
and owing). Notwithstanding the previous sentence (except with respect to
non-payment), if a cure is not possible within such thirty (30) days, and if
the
defaulting party diligently pursues a cure of such default during such thirty
(30) day period and thereafter, then the cure period shall extend up to a total
of ninety (90) calendar days. Notwithstanding the foregoing, in the event that
a
defaulting party commits an additional default during the extended cure period,
the non-defaulting party may terminate this Agreement upon the defaulting
party’s receipt of notice of the subsequent default.
| b. |
If
Ethox terminates this Agreement due to Scivanta’s default, Scivanta
will:
|
| i. |
Remove,
and pay for in advance that portion of, all unused raw material that
Ethox
has ordered pursuant to this Agreement and which cannot be returned
to its
manufacturer for a refund of Ethox’s
costs;
|
| ii. |
Hold
Ethox harmless from all vendor commitments Ethox has made pursuant
to this
Agreement;
|
| iii. |
Remove
and pay for all work in process as of the date of termination;
and
|
| iv. |
Pay
Ethox all its costs associated with its performance of its obligations
under this Agreement, including its “in-kind” contribution made in
accordance with the Foundation Agreement, prior to such termination.
|
| c. |
If
Scivanta terminates this Agreement due to Ethox’s default, Scivanta
will:
|
| i. |
Remove,
and pay for in advance that portion of, all unused raw material that
Ethox
has ordered pursuant to this Agreement and which cannot be returned
to its
manufacturer for a refund of Ethox’s
costs;
|
| ii. |
Remove
all conforming finished Product inventory manufactured to Scivanta
purchase orders and pay the price
therefor.
|
| d. |
Scivanta
shall have the right to terminate this agreement upon written notice
to
Ethox at any time after two (2) years from the date hereof. In the
event
of such termination by Scivanta, Scivanta shall be obligated as set
forth
above in a and b of this Section.
|
| e. |
During
the term of this Agreement, either party may terminate this Agreement
upon
twenty-one (21) days prior written notice to the other party. In the
event
of such a termination by Scivanta, Scivanta shall be obligated as set
forth above in a and b of this Section.
|
| f. |
Except
as expressly stated in this Agreement, neither party will be liable
to the
other for any damages or compensation due to the termination of this
Agreement.
|
| 27. |
Confidential
Information
|
It
is
anticipated that the parties may be required to exchange certain confidential
information (hereafter called “Information”) to the other in the course of
performing this Agreement. From the date of disclosure, and until ten (10)
years
following the expiration or earlier termination of this Agreement, the recipient
of Information (hereafter called “Recipient”) shall maintain the Information in
confidence and limit its use to the purposes contemplated under this Agreement,
using at least the same degree of care as it employs to protect its own
confidential information of a similar nature, but not less than a reasonable
standard of care, provided the Information is identified in writing as
confidential at the time of disclosure or, if orally disclosed, is identified
as
confidential at the time of disclosure and confirmed in writing within twenty
(20) days after the oral disclosure. Recipient shall have no obligation
hereunder with respect to any Information that is:
13
| a. |
generally
known to the public at the time of disclosure, or becomes known to
the
public without breach of this Agreement;
|
| b. |
known
to the Recipient prior to the disclosure, or is independently developed
by
the Recipient without reference to or use of any other portion of the
Information;
|
| c. |
obtained
by the Recipient in good faith from a third party not under obligation
of
secrecy to the disclosing party (hereafter called “Discloser”);
or
|
| d. |
the
subject of a court or government agency order to disclose, provided
the
Recipient gives prompt notice to the Discloser to allow the Discloser
to
contest such order.
|
The
Recipient shall have the burden of proving that any of the above exceptions
apply by means of documentary evidence available at the time Recipient claims
the exception first became applicable.
Title
to
all tangible forms of the Information, and all copies thereof, shall be and
remain with Discloser. Recipient shall not copy or otherwise reproduce, in
whole
or in part, any Information without the prior written authorization of
Discloser, except as may be reasonably necessary to fulfill the purpose of
this
Agreement. Recipient shall use reasonable efforts promptly to return or destroy
all tangible forms of the Information, and copies thereof, upon Discloser’s
request or termination of this Agreement, except that Recipient may retain
one
archival copy of the Information to be used solely for compliance with
Recipient’s obligations under this Agreement.
It
is
understood, however, that Ethox has performed substantial development relating
to the design, engineering and manufacture of tooling and equipment and medical
devices and that Ethox has relationships with other companies, which may be
Scivanta’s competitors. Except as set forth in Section 25b, above, neither this
Agreement, nor receipt of Information under this Agreement, shall limit Ethox’s
independent development, manufacture, or marketing of products, systems or
processes involving technology or ideas similar to those disclosed in the
Information. In addition, this Agreement shall not limit Ethox’s use of general
ideas, concepts, or techniques contained in the Information in connection with
its development, manufacture, and other businesses.
Ethox
shall not reference its performance of services for Scivanta under this
Agreement in any advertising, promotional materials, press releases and the
like, without Scivanta’s prior written approval.
| 28. |
Intellectual
Property Rights
|
28.1 All
intellectual property created by Ethox for Scivanta, jointly or independently,
in connection with Ethox’s services hereunder, shall be owned exclusively by
Scivanta. Scivanta shall have the absolute right to assign or transfer or
sublicense to any third party any intellectual property owned by Scivanta
hereunder and any intellectual property owned by or licensed to Scivanta
necessary for the use of any of the devices created pursuant to this Agreement.
14
28.2 Ethox
agrees: (a) to disclose and assign to Scivanta as its exclusive property all
discoveries, inventions and improvements which Ethox or its employees or
contractors develop or conceive, solely or in conjunction with others that
are
based on or involve or relate to or affect the use of Scivanta’s intellectual
property; (b) to the extent legally able to do so, assign or sublicense to
Scivanta Ethox’s licensed rights to any and all third party intellectual
property utilized by Ethox solely in connection with the project or its services
for Scivanta hereunder; (c) to execute all necessary documents, including,
without limitation, confirmatory documents of assignment, and to provide
Scivanta (at Scivanta’s expense) sufficient assistance to confirm, secure and
obtain patent, copyright and other legal protections for any such inventions,
discoveries and improvements, and to make and maintain reasonably detailed
accurate records of any such inventions, discoveries and improvements necessary
to accomplish said purpose; and (d) to deliver to Scivanta upon termination
or
expiration of this Agreement all materials which relate to the business of,
or
belong to, Scivanta or its clients, or by which their nature are for use of
Scivanta’s employees, contractors or consultants.
28.3 Ethox
hereby assigns to Scivanta all of its right, title and interest in and to any
and all “New Technology” (as such terms is defined in the Foundation Agreement)
made in part by any person using the State University of New York facilities
and
in part by Ethox employees, agents, consultants or collaborators without use
of
the State University of New York facilities.
28.4 Nothing
in this Section 28 shall diminish Scivanta’s rights to intellectual property as
set forth in Section 11 of this Agreement.
| 29. |
Insurance.
|
Each
party agrees that it will keep in force and effect the following insurance
naming the other as an insured and loss payee during the term of this Agreement:
(a) statutory required workers’ compensation insurance, (b) general liability
insurance in the amount of $2 Million for each occurrence.
| 30. |
Survival.
|
Sections
4.2, 20, 21, 22, 24, 25, 26, 27, 29 and 30 shall survive the termination,
expiration or cancellation of this Agreement.
| 31. |
General
|
| a. |
This
Agreement, including all of its referenced Schedules attached hereto,
constitutes the entire agreement between Scivanta and Ethox with respect
to the activities described in the scope of this Agreement. Any terms
or
conditions contrary hereto contained on printed forms submitted as
part of
a purchase order, sales acknowledgment or invoice are hereby rejected.
It
also supersedes all previous oral or written communications between
Scivanta and Ethox regarding the development of Products and services
described in this Agreement. This Agreement may not be modified except
by
a written document signed by the party against whom enforcement is
sought.
If any provision of this Agreement is held invalid, all other provisions
will remain valid, unless such invalidity would frustrate the purpose
of
this Agreement.
|
| b. |
No
provision of this Agreement shall be deemed waived and no breach excused
unless such waiver is made in writing signed by a duly authorized
representative of the party making such waiver or
consent.
|
15
| c. |
The
parties acknowledge and agree that they have thoroughly reviewed this
Agreement and bargained over its terms. Accordingly, this Agreement
shall
be construed without regard to the party responsible for its preparation
or form, and shall be deemed to have been prepared jointly by the
parties.
|
| d. |
This
Agreement will be governed by and construed in accordance with the
laws of
the State of New York without regard to its conflict of laws rules.
The
parties specifically agree that the United Nations Convention on the
International Sale of Goods shall not apply to this
Agreement.
|
| e. |
This
Agreement shall be binding on each party’s respective successors and
permitted assigns.
|
| f. |
The
parties agree that in the event of a dispute between them arising out
of,
concerning or in any way relating to this Agreement, including its
interpretation, which cannot be settled by a good faith effort by the
parties to resolve such issue, will be submitted to binding arbitration
under the Federal Arbitration Act as amended and in accordance with
the
Commercial Arbitration Rules then prevailing of the American Arbitration
Association (“AAA”). The arbitration will be held in New York County, New
York by a panel of three (3) arbitrators appointed pursuant to the
AAA
rules and judgment upon the award rendered by the arbitrators may be
entered into any court having jurisdiction thereof.
|
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their duly authorized representatives, all intending to be legally bound
hereby.
|
ETHOX
INTERNATIONAL, INC.
|
SCIVANTA
MEDICAL CORPORATION
|
|
By:
/s/ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
|
By:
/s/ ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
|
|
Name:
▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
|
Name:
▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
|
|
Title:
President &
CEO
|
Title:
Executive Vice President & CFO
|
|
Date:
June 29,
2007
|
Date:
June 29,
2007
|
16
Schedule 2.4
Form
of Agreement to Manufacture Disposable Catheters
SCIVANTA
MEDICAL CORPORATION
SUPPLY
AGREEMENT
This
Supply Agreement (this “Agreement”) is made by and between Ethox International,
Inc., (“Ethox”), a New York corporation having a place of business at ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and Scivanta Medical Corporation (“Scivanta”), a
Nevada corporation having a place of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, as follows:
Section
1 Scope
of Work
1.1 Ethox
and
Scivanta agree that the following terms and conditions will govern the purchase
by Scivanta of the disposable two balloon esophageal catheter (“Products) to be
used as part of the ▇▇▇▇▇▇ Cardiac Monitoring System developed under the Product
Development Agreement entered into by the parties on June 29, 2007 and the
manufacture of certain tooling and equipment (“Tooling and Equipment”) required
to manufacture and/or assemble the Products by Ethox hereunder. All Attachments
referenced in this Agreement are an integral part of this Agreement. Only the
terms of this Agreement will apply to orders for Products or Tooling and
Equipment. Pre-printed or other terms and conditions contained in either party’s
purchase orders shall not bind the other party and Ethox and Scivanta each
objects to and rejects all such provisions therein.
1.2 This
Agreement is for Scivanta’s requirements for Products and Scivanta agrees that
it shall obtain and purchase Products solely and exclusively from Ethox during
the initial term and any renewal term hereof provided that Ethox is able to
complete Scivanta’s orders for products in a timely and commercially viable
manner.
1.3 All
changes to Products, processes, components, labeling and packaging, equipment
and all associated documentation, including, but not limited to, specifications,
drawings, Device Master Records, art work masters, shop travelers and work
instruction and the impact of any such changes on regulatory
submissions/premarket notification, sales literature, Product in the field,
safety and effectiveness and bio compatibility shall be subject to the review
and approval of Scivanta. Any Scivanta request for change shall be in writing
signed by an officer of Scivanta. Upon receipt of the requested change, Ethox
will provide Scivanta with an implementation schedule, plan, costs and any
additional items required to implement the change.
1.4 The
parties acknowledge and agree that the Products will be subject to the
regulatory requirements of the United States Food and Drug Administration (the
“FDA”) and other governmental agencies in all territories in which the Products
may be sold or are manufactured, which potentially includes the entire world.
Scivanta, as the owner of the Products, shall have certain responsibilities
prescribed by such regulatory agencies concerning the Products. Scivanta agrees
to establish and maintain such systems, methods and practices as are required
to
conform
to
such
regulations concerning the Products. Ethox, as the manufacturer of the Products
pursuant to this Agreement, agrees to be bound by and comply with all applicable
governmental regulations, including, without limitation, FDA regulations and
the
regulations of foreign governmental agencies, concerning the manufacture,
record-keeping, quality control and similar regulations. To the extent it is
reasonably possible to do so, the parties will accept the systems, methods
and
practices of Ethox in meeting the respective regulatory obligations, it being
understood and agreed that if Scivanta confronts a regulatory issue that is
not
adequately resolved by the systems, methods and practices then employed by
Ethox, the parties will meet and agree as soon as reasonably possible on an
alternative course of action to be compliant with the prevailing regulation
and
will implement such action in a reasonable and timely fashion. The parties
further agree that with respect to actions concerning patient safety, product
reliability, adverse events and similar events that may occur during the course
of the Products’ commercial availability, they will devise and agree upon
mutually acceptable, timely and compliant methods and procedures for addressing
such matters.
Section
2 Tooling
and Equipment - Procurement and Transfer
2.1 Tooling
and Equipment manufactured by Ethox in connection with the manufacture of the
Product shall have an expected useful life of at least five hundred thousand
(500,000) operations or five (5) years, whichever expires first (“Useful Life
Period”) and shall meet the specifications of the project. During the Useful
Life Period, Ethox shall be responsible for all refurbishment and preventative
maintenance of such tooling and equipment. After the expiration of the Useful
Life Period, Scivanta shall be responsible for refurbishment of such Tooling
and
Equipment, as set forth in Section 9 below. Except as specifically set forth
above, the Tooling and Equipment are furnished “as is” and Ethox shall have no
additional responsibility or liability with respect to the Tooling and
Equipment.
2.2
Upon
expiration or termination of this Agreement, for any reason by either party
hereto, Scivanta shall promptly remove the Tooling and Equipment from Ethox
facilities.
2.3 Upon
expiration or termination of this Agreement for any reason by either party
hereto, Scivanta shall purchase any tooling owned by Ethox and used exclusively
to provide Products hereunder at a price equal to the greater of fair market
value (as determined by a third party selected by Scivanta and acceptable to
Ethox at Ethox’s expense) or book value as recorded by Ethox in its corporate
books and records, in accordance with accounting principles generally accepted
in the United States of America. All handling, storage, crating, rigging, and
labor for the preparation and shipment of the Tooling and Equipment and Ethox’s
tooling and equipment used solely in connection with the Products shall be
the
full responsibility of the Scivanta.
2.4 Except
as
provided in Section 2.3, any Ethox-owned equipment used on the project will
remain the property of and responsibility of Ethox regardless of expiration
or
termination. If additions or modifications are required to Ethox-owned
equipment, the cost for such will be the responsibility of Ethox and Ethox
will
own such additional parts. Ethox agrees that any equipment modification or
addition, or process modification made for the Project and that is useful or
necessary for manufacturing only the Product shall be licensed to Scivanta
upon
termination or expiration of this Agreement and at Scivanta’s request. Such
license from Ethox to Scivanta shall be a royalty-free, perpetual, worldwide
license.
2
Section
3 Forecasts
and Orders
3.1 Commencing
on the date of this Agreement, and at the beginning of each month thereafter
during the term of this Agreement, including any extensions thereof, Scivanta
shall deliver to Ethox a rolling twelve-month forecast of Scivanta’s
requirements for the Products beginning on the first day of each month
thereafter.1
The
requirements for the first three-month period of each rolling forecast shall
constitute a firm and binding purchase order for that quantity of Products.
The
requirements for the subsequent periods of each rolling forecast shall
constitute non-binding forecasts of Product requirements for the period
described. Any increase in firm and binding purchase order quantities over
forecasted quantities for a given month shall be at Ethox’s reasonable
discretion. At the time of initial order, delivery schedules shall be mutually
agreed, but shall not be less than ninety (90) days from the date of order,
nor
more than one hundred-twenty (120) days from the date of order.
Section
4 Pricing
4.1 Subject
to adjustments due to changes in design, specifications, or quality standards,
and
adjustments described in this Section 4 hereof, the prices for the Products
shall be determined as set forth in Attachment A and will be based on the Fully
Burdened Cost of Ethox to manufacture the Products, as agreed to by the parties,
plus 30%. Fully Burdened Cost shall include: (a) direct material cost (direct
material rollup from ▇▇▇▇ of materials);
(b)
direct labor (direct labor rate x labor hours); (c) premium labor (premium
labor
for some operations such as molding labor to be calculated as premium labor
hours x premium labor rate); (d) overhead allocation (a portion of the overhead
will be allocated as a percentage of direct labor while the remaining amount
of
overhead will be allocated on a per release basis utilizing activity based
costing); (e) scrap as a percentage of direct material and labor cost; (f)
inbound freight for raw materials, as a percentage of material costs; (g)
sterilization cost; (h) freight to sterilizer; and (i) selling, general and
administration cost allocation (selling, general and administrative cost as
a
percentage of direct cost).
4.2. The
prices set forth in Attachment A do not include taxes, duties and other
governmental charges, and Scivanta will pay such taxes, duties and other charges
or reimburse Ethox for any thereof imposed upon Ethox in connection with the
performance or manufacture of the Products.
4.3 The
prices for Products are based upon production and provisions for the minimum
of
number of units per month of each of the Products as set forth in Attachment
A,
and Scivanta will pay Ethox the full price of such minimum quantities, less
avoidable costs, plus any incremental costs associated with Scivanta’s failure
to take delivery of the minimum number of units in any month.
_______________________
1
For
example, the twelve month forecast to be provided in the beginning of January
of
any year during the term hereof shall forecast Scivanta’s requirements for the
twelve month period commencing April 1 of that year.
3
4.4 Prices
will be adjusted up or down semi-annually each year to reflect changes in those
raw materials or purchased component prices, during the immediately preceding
six (6) month period. Ethox will produce invoices for raw material and purchased
components if requested by Scivanta to support pricing. Ethox will use all
reasonable efforts to secure the best raw material and component
prices.
4.5
Ethox
will keep complete, true and accurate books of account containing reasonable
particulars that may be necessary for the purpose of showing the amounts payable
by Scivanta hereunder and for the purpose of showing compliance with all other
obligations under this Agreement. Said books and the supporting data will be
available at all reasonable times for five (5) years following the end of the
calendar year to which they pertain, to confidential inspection by Scivanta
or
its agents, upon reasonable notice to Ethox, for the purpose of verifying
amounts due or compliance in other respects with this Agreement. Scivanta and
its agents may make copies of relevant information during the course of an
inspection. In addition, Ethox agrees to provide copies to Scivanta of relevant
records upon request of Scivanta. Each party will promptly pay or credit the
other for any underpayment or overpayment discovered during an inspection.
Should such inspection lead to the discovery of a greater than 5% discrepancy
in
reporting to Scivanta’s detriment, Ethox will pay (a) the full cost of the
inspection, and (b) accrued interest at the lesser of the maximum rate allowed
by law or 1 ½ % per month.
4.6 As
an
additional incentive to Ethox, Scivanta agrees to pay to Ethox during the
original term of this Agreement a “Development Surcharge” as
follows:
| a. |
The
Development Surcharge will be paid as an additional charge per unit
added
to the selling price of the Products from Ethox to
Scivanta.
|
| b. |
The
Development Surcharge will be equal to the Ethox in-kind contribution
of
up to $535,000, as described in Section 6 of the Product Development
Agreement between Scivanta and Ethox, divided equally by the total
minimum
of number of units to be produced during the term of this Contract
as set
forth in Attachment A.
|
| c. |
To
the extent that the sales of the minimum quantities are not achieved,
Scivanta will make an annual payment to Ethox equal to the Development
Surcharge times the shortfall for the annual sales
period.
|
| d. |
The
obligation of Scivanta to pay a Development Surcharge to Ethox shall
cease
upon Scvianta’s payment to Ethox of up to an aggregate of five hundred
thirty-five thousand dollars ($535,000) of Development
Surcharge.
|
Section
5 Payment
5.1 Within
thirty (30) calendar days after the date of Ethox’s invoice, Scivanta shall pay
to Ethox all amounts due under the invoice, without deduction or offset, in
United States dollars delivered to Ethox at the address stated on the
invoice.
4
5.2 Scivanta
shall pay all reasonable costs, including, without limitation, attorneys’ fees
and disbursements, incurred by Ethox to collect any amounts not paid when due
including amounts payable pursuant to Section 4.5 hereof.
Section
6 Inspection,
Delivery and Risk of Loss
6.1 Products
will be subject to inspection and acceptance by Scivanta prior to
being placed
into distribution. Acceptance shall be in accordance with mutually agreed
acceptance criteria set forth in Attachment C.
6.2 Before
delivering Products to Scivanta, Ethox will perform the factory
inspection and
quality assurance tests on the Products as prescribed and as set forth in
Attachment C. If Scivanta requests, Ethox will either certify that Ethox has
completed those tests or permit Scivanta’s representatives to witness them.
Scivanta’s acceptance of the Products will not waive any of Scivanta’s warranty
rights under this Agreement.
6.3 Unless
Scivanta furnishes Ethox with special written instructions regarding shipment,
Ethox will choose the method of shipment and carrier to be used. Ethox may
make
partial shipments to Scivanta and invoice Scivanta for them. All shipments
shall
be freight on board Ethox’s shipping point and risk of any loss or damage shall
pass to Scivanta upon delivery to the carrier. Costs of delivery shall be paid
by Scivanta.
6.4 Ethox
will use reasonable commercial efforts to meet the delivery dates Scivanta
requests. Under no circumstances shall Ethox be responsible for delays in or
failure to deliver the Products due to acts beyond its control, such as, but
not
limited to, fires, floods, riots, strikes, freight embargos, transportation
delays, shortage of labor, inability to secure fuel, materials, supplies or
power at current prices or as a result of shortages of any thereof or other
circumstances included in Section 15 hereof. (“Force
Majeure”)
6.5 Scivanta
shall be responsible for the design and integrity of all Product packaging.
Scivanta shall be responsible for all labeling content, adequacy, accuracy,
design, integrity, legibility, location/placement, and claims made in all
labeling. Ethox shall provide guidance and assistance to Scivanta regarding
the
FDA packaging and labeling requirements and work with Scivanta to comply with
same. Scivanta shall provide written approval for all artwork masters used
to
inspect and accept labeling at Ethox. All labeling will be inspected and
accepted based upon Scivanta approved artwork master. Shipment of "non-sterile”
Product labeled as "sterile" will be in accordance with a separate non-sterile
shipping agreement. Separate non-sterile shipping agreements will be executed
between Ethox and sterilizer, and sterilizer and Scivanta. Any labeling and/or
packaging deviations, such as over-labeling, shall require Scivanta's written
approval.
Section
7 Warranty
7.1
Ethox
warrants only that the Products manufactured and/or assembled for Scivanta
under
this Agreement will be, at the time of delivery to Scivanta, free from any
liens
or other defects in title, will conform to the applicable specifications set
forth in Attachment B, and will be free
5
from
material defects in workmanship (and materials, if Ethox is responsible for
procuring materials from its own sources) under normal use and service. Ethox
will not, however, be responsible for, and this warranty will not apply to,
any
defects in the Products arising out of Scivanta’s design or the use of materials
or components that Scivanta furnished to Ethox or directed Ethox to use. A
claim
under this warranty must be made by Scivanta in writing within fifteen (15)
months from the date of delivery of the affected unit(s) of Product to
Scivanta’s customer. In no case shall the warranty extend beyond the labeled
shelf life/expiration date of the Product. Additionally, such warranty period
shall be extended by the time period that the Products are repaired or replaced
by Ethox.
7.2
Ethox’s
sole obligation to Scivanta and Scivanta’s exclusive remedies under this
warranty is as follows:
| a. |
Ethox
will, at its option, repair or replace without charge to Scivanta any
unit
of the Products found to be defective within the terms of this warranty
if
Scivanta returns it, freight prepaid, to Ethox. At Ethox’s option,
however, Ethox may also elect to accept return of the unit and refund
to
Scivanta the purchase price Scivanta paid for it. Repaired or replaced
Product will carry this same warranty for the balance of the warranty
period, such warranty period shall be extended by the time required
for
repair or replacement. Prepaid freight on Product found to be defective
or
replaced under warranty shall be reimbursed to
Scivanta.
|
| b. |
Ethox
will not be required to ship replacement Products until Ethox has
confirmed through examination that the returned unit(s) is defective
within the terms of this warranty. Ethox will pay freight costs to
ship
any repaired or replacement unit(s) to Scivanta. Ethox shall have ten
(10)
days to inspect the Products and determine that each Product is defective.
If Ethox is unable to repair or replace the returned unit(s) within
thirty
(30) days of its determination that the Product is defective, then
Scivanta will be entitled to the refund of its purchase price for that
unit(s).
|
| c. |
This
warranty does not apply to any defect attributed to purchased components
specified by Scivanta, or to any unit(s) of Product which Ethox determines
has been subjected by a party other than Ethox to (i) operating or
environmental conditions beyond those normally expected for the Product
based upon the materials specified; or (ii) improper application, improper
maintenance or repair, improper installation, alteration, accident,
use of
Product inconsistent with approved labeling or any other negligent
act or
omission in use or handling.
|
| d. |
Units
of Products returned to Ethox which Ethox determines are not defective
within the terms of this warranty will be returned to Scivanta, and
Scivanta will reimburse Ethox upon invoice for return transportation
charges and Ethox’s normal hourly charge applicable to inspection of the
unit.
|
| e. |
Purchased
components of the Products specified by Scivanta are warranted only
to the
extent, and subject to the terms of the original warranty given by
the
manufacturer to Ethox. Ethox’s sole obligation with respect to such
components shall be, at Scivanta’s expense, to prosecute on behalf of
Scivanta all warranty claims against such component manufacturers upon
receipt of written authorization of
Scivanta.
|
6
| f. |
The
inability of Ethox to repair or replace returned units resulting in
refunds of purchase price as per 7.2 (b) above without consent of Scivanta
is a substantial failure to perform a material provision of this Agreement
as described in section 13.1, entitling Scivanta to invoke its rights
under section 13 of this Agreement.
|
FOR
PURPOSES OF THIS SUPPLY AGREEMENT ONLY, REMEDIAL ACTION AS PROVIDED HEREIN
SHALL
CONSTITUTE FULFILLMENT OF ALL LIABILITIES OF ETHOX TO SCIVANTA AND SCIVANTA’S
SOLE REMEDIES HEREUNDER, WHETHER BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE)
OR OTHERWISE. Under no circumstances will Ethox be liable for reprocurement
costs, lost revenues or profits, or for any indirect, special, incidental,
economic or consequential damages, even if they were foreseeable or Scivanta
had
informed Ethox of their potential.
7.3
FOR THE
PURPOSES OF THIS SUPPLY AGREEMENT ONLY, EXCEPT FOR THE WARRANTY SET FORTH IN
SECTION 7.1 HEREOF, SELLER MAKES NO WARRANTY OR REPRESENTATION THAT THE PRODUCTS
ARE SUITABLE FOR THE PURPOSES AND USES INTENDED OR ANY OTHER STATEMENT, PROMISE
OR WARRANTY, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR
A
PARTICULAR PURPOSE, AND SCIVANTA ACKNOWLEDGES IT HAS NOT RELIED UPON ANY
STATEMENT OF ETHOX OR ANY EMPLOYEE, AGENT OR REPRESENTATIVE THEREOF IN RESPECT
OF THE PRODUCTS. COMPLIANCE WITH LAW, CODES AND REGULATIONS RELATING TO THE
USE
OF THE PRODUCTS REMAINS THE SOLE RESPONSIBILITY OF SCIVANTA.
7.4 Ethox’s
total liability to Scivanta for damages under this Agreement shall not exceed
the total price Scivanta paid Ethox for the affected Products or Tooling and
Equipment at issue. This limitation will apply regardless of the form of the
action (i.e. whether the lawsuit is in contract, tort (including negligence)
or
otherwise).
Section
8 Product
Liability and Indemnity
Subject
to only the warranties set forth in Section 7.1 hereof, Scivanta will be solely
responsible for all third party liability claims related to the design,
specifications, manufacture, assembly, use, functionality, and safety of the
Products manufactured and/or assembled by a third party, In this regard,
Scivanta will defend Ethox from any and all such claims, and indemnify and
hold
Ethox harmless from all judgments or awards, and any related costs (including
attorneys’ fees and other expenses associated with litigation or dispute
resolution proceedings) arising out of such claims.
Section
9 Tooling
and Equipment Maintenance
9.1 Tooling
7
9.1.1 Except
as
set forth in Section 2.3 hereof, all tooling and fixtures paid for by Ethox
will
remain the property of Ethox regardless of termination by Scivanta or expiration
hereof.
9.1.2 All
tooling will be assigned a tool number for control within Ethox’s tooling
control
systems.
9.1.3 Periodic
calibrations, if required, will be the responsibility of the owner of the
tooling
and fixtures. Ethox can provide calibration services on an “as quoted”
basis.
9.1.4 Routine
maintenance for all tooling and fixtures at Ethox will be the responsibility
of Ethox.
9.1.5 Repairs,
refurbishment, or replacement costs due to normal wear and tear will
be
the
responsibility of the owner. Such repairs, refurbishment, or replacement that
is
due
to
negligence on the part of Ethox or its employees will be the responsibility
of
Ethox.
9.1.6 Storage
of tooling is the responsibility of Ethox. If tooling becomes inactive for
a
period of twelve (12) months or more, Ethox reserves the right to charge for
such storage or to ship them to the storage location designated by the
owner.
9.2
Equipment
9.2.1 Any
Ethox
owned equipment used on the project will remain the property of
and
responsibility of Ethox regardless of termination by Scivanta or expiration
hereof.
9.2.2
If
additions or modifications are required to Ethox owned
equipment, the cost
for
such will be the responsibility of Ethox and Ethox will own such additional
parts.
9.2.3 Periodic
calibrations, if required, will be the responsibility of the owner of the
equipment.
Ethox can provide calibration services on an “as quoted” basis. Routine
maintenance
for all equipment at Ethox will be the responsibility of Ethox.
9.2.4 Repairs,
refurbishment, or replacement costs due to normal wear and tear will
be
the
responsibility of the owner. Such repairs, refurbishment, or replacement that
is
due
to
negligence on the part of Ethox or its employees will be the responsibility
of
Ethox.
9.2.5 Storage
of equipment is the responsibility of Ethox. If Scivanta owned equipment becomes
inactive for a period of twelve (12) months or more, Ethox reserves the right
to
charge for such storage or to ship them to the storage location designated
by
the owner.
8
Section
10 Non-Recurring
Engineering
If
required, Ethox will furnish non-recurring engineering services required in
connection with the manufacture of the Products or the Tooling and Equipment
and
related charges as outlined in Attachment E.
Section
11 Indemnity
11.1 Scivanta
will defend, indemnify and hold Ethox harmless from any claim that (a) the
design or manufacture of any of the Products using the intellectual property
of
or licensed to Scivanta, (b) any engineering or manufacturing processes Scivanta
directs Ethox to use, or (c) any materials or components required by Scivanta
to
be used in or with the Products, infringes any third party patent, copyright,
trade secret or any other intellectual property right. Scivanta will pay all
judgments, warrants, losses, damages, costs, awards, settlements, expenses,
(including reasonable attorneys’ fees), and liabilities of every kind (such
judgments, warrants, losses, damages, costs, awards, settlements, expenses,
(including reasonable attorneys’ fees), and liabilities of every kind,
collectively, “Losses”) awarded against Ethox which result directly from or
arise directly out of any such claim. Ethox will give Scivanta prompt notice
of
any such claim after Ethox learns of it and will cooperate with Scivanta, at
Scivanta’s expense, in the defense of the claim. While Scivanta will have sole
control over the defense, Scivanta may not settle the claim in the name of
Ethox
without Ethox’s prior written consent.
11.2 In
the
event of any claim described in Paragraph 11.1, Ethox may stop production of
the
applicable Products immediately pending adequate assurances from Scivanta of
Scivanta’s ability to meet the on-going indemnity outlined in Paragraph 11.1
above or a license from the claimant.
11.3 Ethox
will indemnify, defend and hold harmless Scivanta and its Affiliates and their
officers, directors and employees from and against Losses arising directly
out
of or resulting directly from: (a) any breach by Ethox of any of its warranties,
guarantees, representations, obligations or covenants contained herein; (b)
any
negligence or intentional acts or omissions by Ethox or its employees and (c)
any claim arising out of or relating to federal, state and local taxes or
contributions imposed or required under unemployment insurance, social security
and income tax laws with respect to the performance of services by Ethox under
this Agreement. Scivanta will give Ethox prompt notice of any such claim
and will
cooperate with Ethox, at Ethox’s expense, in the defense of the claim. While
Ethox will have sole control over the defense, Ethox may not settle the claim
in
the name of Scivanta without Scivanta’s prior written consent, which Scivanta
will not unreasonably withhold.
11.4 Scivanta
shall indemnify and hold harmless Ethox and its Affiliate and their officers,
directors and employees from and against any and all Losses arising directly
out
of or resulting directly from (a) any breach by Scivanta of any of its
obligations or covenants contained herein; and (b) any negligence or intentional
acts or omissions by Scivanta or its employees, and/or agents. Notwithstanding
the foregoing, under no circumstance shall Scivanta defend, indemnify and hold
harmless Ethox from any Losses arising out of or relating to engineering
defects.
9
11.5 Each
indemnified party agrees to give the indemnifying party prompt written notice
of
any matter upon which such indemnified party intends to base a claim for
indemnification (an "Indemnity Claim"). The indemnifying party shall have the
right to participate jointly with the indemnified party's defense, settlement
or
other disposition of any Indemnity Claim. With respect to any Indemnity Claim
relating solely to the payment of money damages and which could not result
in
the indemnified party's becoming subject to injunctive or other equitable relief
or otherwise adversely affect the business of the indemnified party in any
manner, and as to which the indemnifying party shall have acknowledged in
writing the obligation to indemnify the indemnified party hereunder, the
indemnifying party shall have the sole right to defend, settle or otherwise
dispose of such Indemnity Claim, on such terms as the indemnifying party, in
its
sole discretion, shall deem appropriate, provided that the indemnifying party
shall provide reasonable evidence of its ability to pay any damages claimed
and
with respect to any such settlement shall have obtained the written release
of
the indemnified party from the Indemnity Claim. The indemnifying party shall
obtain the written consent of the indemnified party, which shall not be
unreasonably withheld, prior to ceasing to defend, settling or otherwise
disposing of any Indemnity Claim if as a result thereof the indemnified party
would become subject to injunctive or other equitable relief or the business
of
the indemnified party would be adversely affected in any manner.
Section
12 Term/Renewal
This
Agreement shall commence on the date set forth above, and shall continue for
an
initial period of four (4) years from the date of commencement of the first
commercial production of the Products hereunder and shall continue on a year
to
year basis thereafter until terminated by either party by written notice of
termination given to the other at least 180 days prior to the end of the initial
four (4) year term or any one (1) year renewal term hereof.
Section
13 Termination
| 13.1 |
Either
party shall be in default of this Agreement if such
party:
|
| a. |
substantially
fails to perform any material provision of this Agreement; or
|
| b. |
becomes
insolvent or makes an assignment for the benefit of creditors, or
a
receiver or similar officer is appointed to take charge of all or
part of
that party’s assets
|
In
the
event either party shall fail to pay accounts due hereunder within fifteen
(15)
days of the date when due, the non-defaulting party may terminate this Agreement
upon written notice to the defaulting party. In the event of a default other
than non-payment, the non-defaulting party may terminate the Agreement and
any
outstanding orders if the other party has failed to cure such default within
thirty (30) calendar days after its receipt of a written notice of default
and
intent to terminate. Except with respect to non-payment, if a cure is not
possible within such thirty (30) days, and if the defaulting party commences
a
cure of such default during such thirty (30) day period and thereafter
diligently pursues such cure, then the cure period shall extend up to a total
of
one hundred-twenty (120) calendar days after receipt of notice of default.
The
failure to manufacture or deliver Product in accordance with the Product
forecast shall constitute a substantial failure to perform a material provision
of this Agreement, and should such an event occur a second time during the
term
of this Agreement after Scivanta has once given notice of default under this
paragraph, then such second default must be cured within thirty (30) days of
such second notice, with no ability of the defaulting party to extend the cure
period for up to an additional one hundred-twenty (120) days.
10
| 13.2 |
Upon expiration or termination of this Agreement due to Scivanta’s
default, Scivanta will:
|
| a. |
pay
for and remove all conforming finished Product inventory manufactured
to
Scivanta purchase orders and pay the price
therefor;
|
| b. |
pay
for and remove all unused raw material that Ethox has ordered in
reasonable anticipation of its performance under this Agreement and
which
cannot be returned to its manufacturer for a refund of Ethox’s
costs;
|
| c. |
hold
Ethox harmless from all vendor commitments Ethox has made inaccordance
with Ethox’s obligations to Scivanta and upon Scivanta’s approval under
this Agreement;
|
| d. |
remove
all work in process as of the date of termination;
and
|
| e. |
subject
to minimum quantities required to be purchased hereunder, pay Ethox
all
its reasonable unrecovered costs associated with its performance of
its
obligations under this Agreement prior to such termination, including
costs associated with materials and inventory obtained or produced
in
furtherance of manufacturing for the then existent Product forecast
which
has been authorized by Scivanta. Ethox shall eliminate all costs that
can
be avoided after notice of termination or upon
expiration.
|
| 13.3 |
If Scivanta terminates this Agreement due to Ethox’s default, Scivanta
will:
|
| a. |
pay
for and remove all conforming finished Product inventory manufactured
to
Scivanta purchase orders and pay the price
therefor;
|
| b. |
pay
for and remove all unused raw material that Ethox has ordered in
reasonable anticipation of its performance under this Agreement and
which
cannot be returned to its manufacturer for a refund of Ethox’s
costs;
|
| c. |
hold
Ethox harmless from all vendor commitments Ethox has made in accordance
with Ethox’s obligations made upon Scivanta’s approval under this
Agreement or incurred in furtherance of the then existent Product forecast
authorized by Scivanta;
|
| d. |
remove
all work in process as of the date of termination;
and
|
| e. |
subject
to minimum quantities required to be purchased hereunder, pay Ethox
all
its reasonable unrecovered costs associated with its performance of
its
obligations under this Agreement prior to such termination, including
costs associated with materials and inventory obtained or produced
in
furtherance of manufacturing for the then existent Product forecast
which
has been authorized by Scivanta. Ethox shall eliminate all costs that
can
be avoided after notice of termination or upon
expiration.
|
11
13.4 Upon
expiration or termination of this Agreement by either party, for any reason,
all
existing vendor commitments shall be assigned by Ethox to Scivanta upon request,
along with any rights and warranties with respect thereto.
13.5 Except
as
expressly stated in this Agreement, neither party will be liable to the other
for
any
damages or compensation due to the termination of this Agreement.
Section
14 Confidential
Information
14.1
It
is anticipated that the parties may be required to exchange certain
confidential information
(hereafter called “Information”) to the other in the course of performing this
Agreement. From the date of disclosure, and until five (5) years following
the
expiration or earlier termination of this Agreement, the recipient of
Information (hereafter called “Recipient”) shall maintain the Information in
confidence and limit its use to the purposes contemplated under this Agreement,
using at least the same degree of care as it employs to protect its own
confidential information of a similar nature, but not less than a reasonable
standard of care, provided the Information is identified in writing as
confidential at the time of disclosure or, if orally disclosed, is identified
as
confidential at the time of disclosure and confirmed in writing within twenty
(20) days after the oral disclosure. Recipient shall have no obligation
hereunder with respect to any Information that is:
| a. |
generally
known to the public at the time of disclosure, or becomes known to
the
public without breach of this Agreement;
|
| b. |
known
to the Recipient prior to the disclosure, or is independently developed
by
the Recipient without reference to or use of any other portion of the
Information;
|
| c. |
obtained
by the Recipient in good faith from a third party not under obligation
of
secrecy to the disclosing party; or
|
| d. |
the
subject of a court or government agency order to disclose, provided
the
Recipient gives prompt notice to the party disclosing such information
to
allow the other party to contest such
order.
|
The
Recipient shall have the burden of proving that any of the above exceptions
apply by means of documentary evidence available at the time Recipient claims
the exception first became applicable.
14.2 Title
to
all tangible forms of the Information, and all copies thereof, shall be
and remain
with the other party disclosing such information. Recipient shall not copy
or
otherwise reproduce, in whole or in part, any Information without the prior
written authorization of the party disclosing such information, except as may
be
reasonably necessary to fulfill the purpose of this Agreement. Recipient shall
use reasonable efforts promptly to return or destroy all tangible forms of
the
Information, and copies thereof, upon request by the party disclosing such
information or termination of this Agreement, except that Recipient may retain
one archival copy of the Information to be used solely for compliance with
Recipient’s obligations under this Agreement.
12
14.3
It
is understood, however, that Ethox has performed substantial development
relating to
the
design, engineering and manufacture of tooling and equipment and medical devices
and that Ethox has relationships with other companies which may be Scivanta’s
competitors. Neither this Agreement, nor receipt of Information under this
Agreement, shall limit Ethox’s independent development, engineering,
manufacture, or marketing of products, systems or processes involving technology
or ideas similar to those disclosed in the Information. In addition, this
Agreement shall not limit Ethox’s use of general ideas, concepts, or techniques
contained in the Information in connection with its development, engineering,
manufacture, and other businesses.
Section
15 Force
Majeure
Neither
party shall be liable for any delay or failure to perform under this Agreement
if the delay or failure is caused by acts of God or other causes beyond the
reasonable control of and without fault or negligence by the delayed or failing
party.
Section
16 Notices
Any
notice required under this Agreement will be in writing and will be hand
delivered, or sent by prepaid registered or certified mail, postage prepaid,
return receipt requested (if available), or sent by facsimile and confirmed
by
such mail, addressed to the other party at the address shown at the beginning
of
this Agreement. The notice address may be changed by proper notice as set forth
above.
Section
17 Intellectual
Property
Scivanta
shall have the absolute right to assign or transfer or sublicense to any third
party any intellectual property owned by Scivanta hereunder and any intellectual
property owned by or licensed to Scivanta necessary for the design, use,
manufacture or sale of any of the devices created pursuant to this Agreement.
Ethox agrees: (a) to disclose and assign to Scivanta as its exclusive property
all discoveries, inventions, technical and business innovations and improvements
which Ethox or its employees or contractors develop or conceive, solely or
in
conjunction with others: (i) that are based solely on or involve solely
Scivanta’s intellectual property, or (ii) that relate to, constitute, result
from or include work in which Ethox will be engaged solely on behalf of Scivanta
or its clients; (b) assign or sublicense to Scivanta Ethox’s licensed rights to
any and all third party intellectual property utilized by Ethox in connection
with the Project or its services to Scivanta hereunder; and (c) to execute
all
necessary documents, including, without limitation, confirmatory documents
of
assignment, and to provide Scivanta (at Scivanta’s expense) sufficient
assistance to confirm, secure and obtain patent, copyright and other legal
protections for any such inventions, discoveries and improvements, and to make
and maintain reasonably detailed accurate records of any such inventions,
discoveries and improvements necessary to accomplish said purpose; and (d)
to
deliver to Scivanta upon termination or expiration of this Agreement all
materials which related to the business of, or belong to, Scivanta or its
clients, or by which their nature are for use of Scivanta’s employees,
contractors or consultants.
Section
18 Independent
Contractors
Each
party is an independent contractor and not an agent, joint venture, or
representative of the other, and neither party may create any obligation or
responsibility on behalf of, or in the name of, the other without expressed
written agreement.
Section
19 General
19.1
This
Agreement, including all of its referenced Attachments, constitutes the entire
agreement
between Scivanta and Ethox with respect to Ethox’s manufacture and/or assembly
of Scivanta’s requirements for Products or Tooling and Equipment and any
previous oral or written communications between Scivanta and Ethox regarding
the
manufacture and/or assembly of Products or Tooling and Equipment are merged
herein. No waiver, alteration or modification of any of the provisions hereof
shall be binding on Ethox unless made in writing and the provisions hereof
may
not be explained or supplemented by course of dealing, usage of trade or course
of performance or varied or contradicted by parole evidence without the written
consent of Ethox. This Agreement may not be modified except by a written
document signed by the party against whom enforcement is sought. If any
provision of this Agreement is held invalid, all other provisions will remain
valid, unless such invalidity would frustrate the purpose of this
Agreement.
19.2 This
Agreement will be governed by and construed in accordance with the laws of
the
State
of
New York without regard to its conflict of laws rules and in the event of any
dispute hereunder, including disputes that may arise following termination
hereof, Scivanta acknowledges and agrees that this paragraph serves as a
material inducement for Ethox to enter into this Agreement.
19.3 The
parties specifically agree that the United Nations Convention on the
International Sale of Goods shall not apply to this Agreement.
19.4 Ethox
may
not assign this Agreement nor delegate performance of its duties or obligations
hereunder without the written approval of Scivanta, except to an individual
or
entity purchasing all or substantially all of its assets used in the performance
of its obligations hereunder; provided, however, that no such assignment may
be
made by Ethox to any party that is or controls or is under common control with
a
distributor or wholesaler of cardiac monitoring equipment without the written
consent of Scivanta. Sale or issuance of shares of Ethox shall not be considered
an assignment hereof to the purchaser of such shares, unless the proposed sale
or issuance of shares of Ethox in any amount of shares exceeding 25% of the
then
outstanding shares of Ethox is to be made to a party or parties controlling
or
under common control with a business distributing cardiac monitoring equipment.
Any attempted assignment or delegations in violation of this Section shall
be
deemed null and void and of no force and effect. Scivanta may assign this
Agreement, in whole or in part, without limitation.. This Agreement shall be
binding on each party’s respective successors and permitted
assigns.
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19.5 The
parties agree that in the event of a dispute between them arising out of,
concerning or in any way relating to this Agreement, including its
interpretation, which cannot be settled by a good faith effort by the parties
to
resolve such issue, will be submitted to binding arbitration under the Federal
Arbitration Act as amended and in accordance with the Commercial Arbitration
Rules then prevailing of the American Arbitration Association (“AAA”). The
arbitration will be held in New York County, New York by a panel of three (3)
arbitrators appointed pursuant to the AAA rules and judgment upon the award
rendered by the arbitrators may be entered into any court having jurisdiction
thereof.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their duly authorized representatives, all intending to be legally bound
hereby.
|
ETHOX
INTERNATIONAL, INC.
|
SCIVANTA
MEDICAL CORPORATION
|
|
By:
______________________________
|
By:
______________________________
|
|
Name:
____________________________
|
Name:
____________________________
|
|
Title:
_____________________________
|
Title:
_____________________________
|
|
Date:
_____________________________
|
Date:
_____________________________
|
15