EXHIBIT 10(kk)
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Product Development and Supply Agreement
This Product Development and Supply Agreement, dated as of August 24, 2001
(hereinafter the "Effective Date"), sets forth the agreement between BIOMET,
INC., an Indiana corporation ("Biomet"), having an office and principal place of
business at 00 Xxxx Xxxx Xxxxx, X.X. Xxx 000, Xxxxxx, Xxxxxxx 00000-0000, and
ORGANOGENESIS INC., a Delaware corporation ("OI") having an office and principal
place of business at 000 Xxx Xxxx, Xxxxxx, Xxxxxxxxxxxxx 00000.
BACKGROUND
WHEREAS, OI owns or has licenses for technology and is developing certain
products relating to the use of natural acellular biomaterials for applications
in human musculoskeletal tissues including bone and tissue, and is seeking
funding to further its research and development of products using such
technology through establishment of a sponsored product development program; and
WHEREAS, Biomet is willing to fund such further product development under the
terms and conditions of this Agreement, and
WHEREAS, OI is willing to exclusively sell to Biomet such products for resale by
Biomet for certain applications in human musculoskeletal tissues including bone
and tissue as set forth herein; and
WHEREAS, Biomet is willing to purchase its requirements of such products for
such application exclusively from OI as set forth herein; and
WHEREAS, the Parties acknowledge that as not all proposed products may be
successfully developed or commercialized, the Parties agree that Biomet may,
while retaining the rights for other products, return to OI the rights to
purchase for resale the products which cannot be successfully commercialized in
accordance with the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual representations, warranties and
promises contained herein, Biomet and OI agree as follows:
Article 1 - Certain Definitions
When used herein, the following terms shall have the meanings set forth below:
1.1 "Affiliate" shall mean any corporation or other entity that controls,
is controlled by, or is under common control with, a Party.
1.2 "Agreement" shall mean this Product Development and Supply Agreement.
1.3 "Biomet" shall mean Biomet, Inc., an Indiana corporation, and any
Affiliate in which Biomet controls either directly or indirectly at least 50%
dollar value of the stock or voting rights.
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1.4 "Biomet Technology" shall mean technology developed solely by Biomet
after the Effective Date if used in the manufacture of Products, as hereafter
defined, under this Agreement.
1.5 "Clinical Investigation" shall mean each investigation on humans, and
the data derived therefrom, for a proposed or Launched Product, as hereafter
defined.
1.6 "FDA" shall mean the U.S. Food and Drug Administration in the United
States and, for regulatory matters in foreign countries, the competent
regulatory agencies and authorities in such countries.
1.7 "FortaFlex" shall mean a natural acellular collagen derived from
porcine small intestine embodying OI Technology, as hereafter defined. FortaFlex
is a trademark of OI.
1.8 "Field" shall mean each of the following [***] market areas: [***]
(each, separately, referred to as a "Product Application"), but excluding
FortaFlex used as a [***].
1.9 "Improvement(s)" shall mean any enhancement or improvement to any
Product invented or conceived by or on behalf of OI or jointly by both Parties
during the Term, whether or not patentable.
1.10 "Joint Technology" shall mean Proprietary Technology Rights, as
hereafter defined, developed jointly by both Parties during the Term.
1.11 "Launch(ed)" shall mean the first commercial sale of a Product.
1.12 "Management Committee" shall mean the committee described in paragraph
3.1 of this Agreement.
1.13 "Net Sales" shall mean the total of all amounts invoiced by Biomet or
its authorized Affiliates and sublicensees for sales of Products to independent,
unrelated entities, less only the following deductions: (i) trade and/or
quantity discounts actually allowed and taken in such amounts as are customary
in the trade; (ii) sales and other excise taxes and duties paid, absorbed or
allowed; and (iii) amounts repaid or credited by reason of rejection, defects or
returns, or because of retroactive price reductions.
1.14 "OI" shall mean Organogenesis Inc., a Delaware corporation, and any
subsidiary or Affiliate thereof in which OI controls either directly or
indirectly at least 50% of the stock or voting rights.
1.15 "OI Technology" shall mean the Proprietary Technology Rights developed
or owned solely by OI that relate to FortaFlex and/or Products, including but
not limited to Patents.
1.16 "Party or Parties" shall mean either or both Biomet and OI, as the
case may be.
1.17 "Patents" shall mean the patents and patent applications listed in
Appendix A as the same may be amended from time to time throughout the Term to
include patents issued after the Effective Date that relate to OI Technology or
Joint Technology, and any substitutions,
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divisionals, reissues, re-examinations, continuations, continuations-in-part,
and inventor certificates and all foreign counterparts of any such patent or
application, said patents having one or more valid patent claims that read upon
one or more of the Products.
1.18 "Product" shall mean any device or product containing FortaFlex that
is sold by OI to Biomet for resale by Biomet under this Agreement for use in one
or more Product Applications.
1.19 "Product Plan" shall mean the written document described in Article
4.1.1.
1.20 "Proprietary Information" means all materials, products, trade
secrets, confidential or proprietary information of a Party designated as such
in writing by the Party, whether by letter or by the use of an appropriate
proprietary stamp or legend, which is disclosed to the other Party.
Notwithstanding the foregoing, information which is orally or visually disclosed
to the recipient Party by the disclosing Party, or is disclosed in writing
without an appropriate letter, proprietary stamp or legend, shall be deemed
Proprietary Information if the disclosing Party, within thirty (30) days after
such disclosure, delivers to the recipient Party a writing summarizing the
orally, visually or written disclosed information in sufficient detail to advise
the recipient Party adequately of its proprietary nature or confidentiality.
1.21 "Proprietary Technology Rights" shall mean all rights owned, licensed
or developed heretofore by OI, or hereafter during the Term jointly by both
Parties, relating to any and all Regulatory Approvals, Clinical Investigations,
discoveries, modifications, know-how, trade secrets, inventions (whether or not
patentable), patent applications and patents (including, without limitation, all
substitutions, divisionals, reissues, re-examinations, continuations,
continuations-in-part, and inventor certificates and all foreign counterparts of
the foregoing), data, information or physical, chemical or biological materials
useful or necessary to the development or manufacture of Products. It includes
Improvements.
1.22 "Regulatory Approval" shall mean all approvals and clearances by
regulatory authorities (including but not limited to FDA), which are necessary
and required to manufacture, sell and ship commercially a Product in each
country in the Territory that requires such approval and clearance.
1.23 "Specifications" means the characteristics for any formulation of a
Product agreed to by the Management Committee to which each Product is
manufactured for commercial sale, consistent with all applicable regulatory
requirements, including, but not necessarily limited to FDA Quality System
regulations. As agreed to and as amended from time to time by agreement of the
Management Committee, Specifications for each Product shall be attached to this
Agreement as part of Appendix B, and thereafter be deemed a part of this
Agreement.
1.24 "Study" or "Studies" shall mean, as to any Product, one or more
investigations performed to evaluate the overall risk-benefit relationship of an
interventional treatment in vitro, or in animals (but not in humans), and that,
collectively, can provide scientific bases for physician labeling and Regulatory
Approval.
1.25 "Term" shall mean the period during which this Agreement is in effect,
commencing on the Effective Date and ending on the date of the last to expire of
the Patents.
1.26 "Territory" shall mean all the countries of the world.
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1.27 "Trademark" shall mean any proprietary xxxx or marks jointly agreed to
by the Management Committee to be applied to or identified with any Product as a
proprietary identification.
Article 2 - Licenses Granted to Biomet
2.1 Exclusive License to Biomet. Subject to the terms and conditions of
this Agreement, OI hereby grants to Biomet and Biomet hereby accepts from OI the
exclusive rights to distribute, market, offer to sell, and sell, but not make
Products for use in the Field throughout the Territory. OI shall neither,
directly or indirectly, distribute, market, offer to sell, or sell Products for
use in the Field through its own sales force or through other distributors,
dealers or agents, nor grant any such rights to market, offer to sell, or sell
Products to its own sales force, other distributors, dealers, or agents.
2.2 Trademarks.
2.2.1 Selection and Ownership. Products shall be marketed and sold by
Biomet throughout the Term bearing a Trademark or Trademarks
selected by the Management Committee and owned and registered by
Biomet at its expense.
2.2.2 OI Use. Upon execution of an appropriate royalty-bearing license
to Biomet, OI may use any Trademark on any Product for use
outside the Field.
2.2.3 OI Trademarks. In addition to any Trademark selected by the
Management Committee, the finished package of any Product sold
by Biomet shall conspicuously bear a proprietary trademark owned
and selected solely by OI and used to identify FortaFlex
technology.
Article 3 - Administrative Structure, Management Control and Cooperation
3.1 Management Committee. The Parties shall form a Management Committee
consisting of one voting member designated by each Party. Additional
representatives of either Party may attend meetings, but shall not have voting
rights. The Management Committee shall have overall responsibility for oversight
of each Product Plan. The Management Committee may create subcommittees, as it
deems appropriate (as, for example, a design review board).
3.2 Decisions. Decisions of the Management Committee shall be by unanimous
vote of both members, each of whom shall be entitled to one vote. In the event
of an inability of the Management Committee to obtain a unanimous vote on any
issue, at the request of either Party the matter at impasse shall be submitted
to the Chief Executive Officers of both Parties, or a designee of either CEO
with decision-making authority, who shall negotiate a good faith resolution to
the impasse.
3.3 Meetings. Normally, meetings of the Management Committee will be held
approximately 4 times a year throughout the Term to coincide with significant
milestones in each Product Plan. Additional meetings may be held at the request
of a Party to review the activities under each Product Plan approved by the
Management Committee.
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3.4 Information Exchange. During the Term, personnel of either Party may
find it necessary or desirable to visit laboratories or facilities of the other
to observe or inspect such work and become familiar with the laboratory methods
and techniques that are used to produce the Products. The Parties shall
accommodate and arrange these visits to such facilities in good faith, it being
understood that neither Party will make unreasonable demands in this regard and
each will make advance arrangements for such visits. During such visits, neither
Party shall be obligated to provide any technology or information for inspection
by the other that is not related to the Products.
3.5 Third Party Technology. If either Party during the Term incurs
substantial expenses in connection with obtaining a license to technology from a
third party, and that license would, if embodying technology conceived by either
Party or both Parties, amount to an Improvement, then the other Party shall, if
it wishes to include the in-licensed technology in Products subject to this
Agreement in order to receive the benefits of its inclusion under this
Agreement, bear a reasonable share of the license expense, as mutually agreed
between the Parties.
3.6 Standards in Excess of Legal Requirements. Unless approved by the
Management Committee, neither Party shall be required to exceed the requirements
of any regulation or law in the development, testing, manufacture or marketing
of Products.
Article 4 - Product Application Development
4.1 Product Plan
4.1.1 Contents. A Product Plan is a written document drafted by the
Parties describing the Product or Products proposed for use in a
Product Application. There shall be one, and only one, Product
Plan for each Product Application. Each Product Plan shall
define and justify each Product in a Product Application from
both a technical and commercial perspective. A Product Plan
shall include an outline of the development process and the key
risks and assumptions for each Product. Specifications may be
added to a Product Plan after its approval by the Management
Committee, or amended thereafter to reflect increasing knowledge
of that Product throughout development. Each Product Plan shall
also propose minimum annual product sales for each proposed
Product as required by Article 7.
4.1.2 Preparation and Review. A draft recommended Product Plan for
each Product Application shall be prepared by the Parties as
follows:
4.1.2.1 The Product Plan for [***] Product Application shall be attached
hereto as Appendix C and deemed approved by the Management
Committee.
4.1.2.2 The Product Plan for each of the remaining [***] Product
Applications shall be drafted by the Parties periodically after
the Effective Date, at the rate of at least one every [***].
4.1.3 Approval. Each Product Plan shall be reviewed and approved by
the Management Committee within 60 days of its initial draft by
the Parties. Approval of the Product Plan signifies that the
Product or Products
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described therein, as the case may be, have proceeded to the
design specification phase of design control.
4.1.4 Remedies for Failure to Approve: If:
4.1.4.1 the Management Committee does not approve the Product
Plan for a Product Application within 60 days of its
submission to the Management Committee, and if
4.1.4.2 the CEO's of both Parties do not subsequently approve
such a Product Plan as described in Article 3.2 within
30 days of the failure of the Management Committee to
approve the Product Plan as described in Article
4.1.4.1, and if
4.1.4.3 thereafter an arbitrator has not issued an award
approving a Product Plan after arbitration commenced
pursuant to Article 18 by either party within 30 days of
the failure of the CEO's to approve the Product Plan as
described in Article 4.1.4.2, then
4.1.4.4 OI shall be deemed free thereafter to manufacture, sell,
have sold or sublicense to any person or entity each
Product proposed in each Product Plan that the
Management Committee has failed to timely approve. OI
shall also be deemed free to use, disclose and
sublicense any Proprietary Technology Rights related to
each such proposed Product in each such Product Plan;
provided, however, if OI wishes to use any Biomet
Technology to make, use, sell, or offer to sell any such
proposed Product, then Biomet agrees to license such
Biomet Technology for such purposes under mutually
agreed upon and commercially reasonable terms and
conditions consistent with prevailing terms and royalty
rates in the medical device industry. The rights herein
granted to Biomet to obtain an exclusive license for
each such proposed Product shall thereafter be deemed
void and of no effect, but all rights herein granted to
Biomet for every other Product shall remain in full
force and effect.
4.1.5 Amendment. With the approval of the Management Committee, each
Product Plan may be amended from time to time throughout the
Term to reflect unforeseen circumstances that make an existing
Product Plan not feasible, unrealistic as to its timelines, or
to reflect changes in the requirements for any Product.
4.2 Spending and Payments
4.2.1 Funding. [***] will fund and pay for in accordance with each
approved Product Plan [***] work performed pursuant to the
approved Product Plan, including [***] of the cost of [***] of
each Product, and any other expenses associated with the Launch
of any Product intended for use in that Product Application
incurred by the Parties; provided, however, all costs and
expenses related to building, equipping, operating, maintaining,
qualifying, and obtaining regulatory approval of a manufacturing
facility
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owned or operated by OI or a subcontractor are not the
responsibility or obligation of Biomet.
4.2.2 Budgets. The Management Committee shall consider and approve
semi-annually throughout the Term a budget for work to be
undertaken under any approved Product Plan for the following six
months.
4.2.3 OI Capital Investments. Notwithstanding the foregoing, Biomet
shall have no responsibility for capital investments associated
with OI's exercise of its manufacturing rights related to
Products. OI shall fully fund and make all capital investments
as may be reasonably required to carry its obligations under
this Agreement.
4.2.4 Payments. Biomet shall pay to OI, in advance, on a quarterly
basis, as of the first day of each calendar quarter, the portion
of each Product Plan's budget that relates to activities
undertaken by OI as approved by the Management Committee for
such quarter in each Product Plan.
4.2.5 Variances. In the event that the sum of OI's actual expenditures
pursuant to all approved Product Plans for a calendar quarter
shall be greater than or less than the total amount budgeted, an
adjustment shall be made at the time the next quarterly payment
shall be due, following the closing of the books for the subject
quarter. This will result in credits and charges for the
subsequent quarter following the subject quarter. No adjustment
from expenditures in excess of the approved budget shall exceed
20% of the approved budget without the approval of the
Management Committee.
4.2.6 Accounting. OI shall maintain a separate accounting of its
direct and indirect costs for all its development work,
manufacturing, and related activities for each approved Product
Plan. OI's direct and indirect costs are defined in Appendix D
and shall be applied on a consistent basis, unless a different
basis is selected by mutual agreement. OI shall provide Biomet
with a quarterly statement itemizing the direct and indirect
costs incurred under each Product Plan during each quarter.
4.2.7 Audit. OI shall maintain complete and accurate records of all
information necessary for the determination of OI's direct and
indirect costs, shall retain such records for three years, and
shall allow such records, upon Biomet's request and at its
expense, to be audited during normal business hours no more than
once per year, by an independent auditor of Biomet's choice with
the understanding that all information received will be regarded
as Proprietary Information. If the audit discloses discrepancies
in charges greater than five percent in OI's favor, the
reasonable cost of such audit and the discrepancy shall be paid
by OI.
4.2.8 Failure to Fund: Remedies. In the event that Biomet fails to
timely provide payment to OI for OI's activities pursuant to
each approved Product Plan, OI shall be deemed free thereafter
to manufacture, sell, have sold or sublicense each Product
proposed in each Product Plan for which Biomet has failed to
provide timely payment: provided, however, if OI wishes to use
any Biomet Technology to make, use, sell, or offer to
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sell any such proposed Product, then Biomet agrees to license
such Biomet Technology for such purposes under mutually agreed
upon and commercially reasonable terms and conditions consistent
with prevailing terms and royalty rates in the medical device
industry. OI shall also be deemed free to use, disclose and
sublicense any Proprietary Technology Rights related to each
such proposed Product in each such Product Plan. The rights
herein granted to Biomet to obtain an exclusive license for each
such proposed Product shall thereafter be deemed void and of no
effect, but all rights herein granted to Biomet for every other
Product shall remain in full force and effect; provided,
however, that OI shall provide Biomet with notice of its
intention to terminate any of Biomet's rights and Biomet shall
have 60 days from the notice in which to provide the required
payments. In the event Biomet fails to make timely payments as
set forth in this paragraph, OI shall not be required to pay
compensation for the subsequent commercialization of any such
Product or to reimburse Biomet for any prior funding of any
activities related to any Product Plan.
4.3 Execution and Completion of Product Development.
4.3.1 Expeditious Completion. Each Party shall use its reasonable
business efforts to undertake and complete the activities
required in each approved Product Plan as expeditiously as
possible.
4.3.2 Failure to Launch Products: Remedies. Subject to the proviso in
the next sub-paragraph regarding unanticipated changes in
development or commercialization, if Biomet has not Launched at
least one Product in each Product Application in the Field
within [***] of the date of approval by the Management Committee
of the Product Plan for the Product Application to which that
Product pertains, OI shall be deemed free thereafter to
manufacture, sell, have sold or sublicense one or more Products
for each Product Application, and to use, disclose and
sublicense any Proprietary Technology Rights related to each
such Product Application in the Territory: provided, however, if
OI wishes to use any Biomet Technology to make, use, sell, or
offer to sell any such proposed Product, then Biomet agrees to
license such Biomet Technology for such purposes under mutually
agreed upon and commercially reasonable terms and conditions
consistent with prevailing terms and royalty rates in the
medical device industry. The rights herein granted to Biomet to
obtain an exclusive license for each such Product Application
shall thereafter be deemed void and of no effect, but all rights
herein granted to Biomet for every other Product Application as
to which Biomet has timely Launched a Product in any country in
the Territory shall remain in full force and effect. In any of
the circumstances recited in this section OI shall not be
required to pay compensation for the subsequent
commercialization of any such Product or to reimburse Biomet for
any prior funding of any activities related to any Product Plan.
4.3.3 Unanticipated Preclinical, Clinical or Development Requirements.
If, in order to Launch any Product, it becomes necessary to
extend the time permitted by this Agreement or any Product Plan
in order to conduct any Study or Clinical Investigation or make
any technological or manufacturing change to any Product, or to
permit OI to manufacture and
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deliver commercial quantities of Product for any reason not due
to the breach of this Agreement by, or lack of diligence of,
Biomet, the Management Committee shall extend the [***] limit
imposed by Article 4.3.2 to a date that reasonably reflects the
time required to complete any such activities.
Article 5 - Manufacture and Sale of Products by OI
5.1 Exclusive Supply of Products. During the Term, Biomet agrees to
purchase and OI agrees to supply all of Biomet's requirements of Products. OI
shall, either directly or through Affiliates or contractors, supply Biomet and
any Biomet sublicensee exclusively with all their requirements of all Products
throughout the Term. If Biomet does not purchase all of its requirements of
Products exclusively from OI throughout the Term, and fails to cure said failure
within 30 days of receiving notice from OI, then OI may terminate this Agreement
in its entirety.
5.2 Payment for Product.
5.2.1 Transfer Price. Biomet will pay to OI a transfer price for all
Products sold by Biomet in a bona-fide arms length transaction
to an unaffiliated third party calculated according to the
following formula:
Transfer Price = ASP x [***]
where "ASP" or "Average Selling Price" represents [****]
5.2.2 Distribution of Products Prior to Commercialization. If Biomet
distributes any Product to any person or entity either without
cost or at a price that does not reflect Biomet's planned ASP
(as, for example for clinical trials or as samples) so that ASP
cannot be fairly determined, then Biomet shall pay OI [***] of
OI's actual cost for each such Product. To facilitate correct
computation of payments under this provision, OI shall advise
Biomet in writing of the actual current cost of each Product at
the beginning of each calendar quarter during the Term.
5.2.3 Combination Products. For a Product which is sold in combination
with any other product, the ASP shall be calculated by
attributing to the Product the percentage of the price of the
combination product that fairly reflects the value of the
Product as a part of the combination product.
5.2.4 Undue Hardship. If the transfer price determined on the basis
described above produces undue hardship for a Party, the Parties
shall negotiate in good faith a reasonable accommodation to
mitigate such hardship.
5.3 Competence to Manufacture. Prior to the Launch of any Product and at
any time thereafter during the Term, OI shall provide information, either in
writing or, upon the request of Biomet, by a Biomet audit the conditions of
which are reasonably satisfactory to both Parties, to demonstrate that it or any
subcontractor selected by OI can and will manufacture production quantities of
each Product in accordance with quality systems regulations (QSR) as established
by the FDA (e.g., ISO 9000, CE xxxx approval) and in accordance with reasonable
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supply schedules and the Specifications. Any dispute as to the competence of OI
or any subcontractor shall be referred to the Management Committee, and, if no
resolution is there obtained or obtained from the referral to the CEO's of the
Parties, to arbitration as set forth in Article 18. Any final decision finding
OI or any such subcontractor not competent shall give OI or that subcontractor
60 days to cure any substandard practice. If no cure occurs within the 60 days,
then the work will be assigned to a subcontractor that is shown to be competent.
5.4 Reasonable Business Efforts. OI shall use its reasonable business
efforts throughout the Term to meet Biomet's order and delivery requirements for
Products. If OI shall not timely meet Biomet's requirements for Products in
conformity with its forecasts for that Product, then, upon 60 days prior notice
to OI to cure such failure, (and if within that 60 day period the Management
Committee [or, as applicable, the Parties' CEO's] cannot agree that OI has cured
any such failure) either Party may invoke the remedy of arbitration in Article
18 to resolve any such disagreement. However, upon the failure of the Management
Committee to agree that OI has cured any such failure within that 60-day period,
or if applicable, upon the decision of an arbitrator that OI has not cured any
such failure to timely meet Biomet's requirements for Products, OI shall be
deemed to have granted to Biomet the right under OI Technology and Patents to
make or have made only that Product and only for so long as OI shall not be able
to demonstrate to the reasonable satisfaction of Biomet its renewed ability and
willingness to make timely deliveries of that Product to Biomet. In the case of
any such manufacture by or for Biomet, the payments to OI under this Article
will be reduced by the actual amount paid by Biomet for the manufacture of that
Product, or by its actual cost for manufacture itself, provided, that, payments
to OI for that Product shall never be less than ASP x [***].
5.5 Payment. Biomet agrees to pay for each quantity of shipped and accepted
Licensed Products within 30 days of receipt by Biomet of each such quantity
shipped and invoiced. Biomet shall keep true and accurate records in sufficient
detail to enable the payments made by Biomet hereunder to be verified, and
agrees to permit such records to be examined from time to time by an auditor
selected by OI who is acceptable to Biomet at reasonable intervals (not to
exceed twice per any 12 month calendar period), during usual business hours, to
the extent necessary to verify the reports and payment required hereunder. In
the event that any such review indicates an underpayment of amounts due OI by
Biomet in excess of [****], Biomet shall pay the cost of such review, as well as
the amount of the underpayment.
5.6 Purchase Orders. Biomet throughout the Term shall order Products by its
purchase orders sent from time to time to OI. Biomet will forward its purchase
orders for Product to OI by facsimile, mail or otherwise.
5.7 Conflicting Forms. Any term of any document, including but not limited
to a purchase order or acceptance, sent to either Party by the other in
connection with either's performance under this Agreement, shall, only to the
extent inconsistent herewith, or to the extent that it purports to impose
requirements on a Party beyond or different from those imposed by this
Agreement, be null, void and of no effect.
5.8 F.O.B. and Risk of Loss. All prices for Products are F.O.B. the dock of
the entity from which Product is shipped to Biomet. Title and risk of loss shall
pass to Biomet upon delivery of product to a common carrier for shipment to
Biomet.
5.9 Forecasts. Throughout the Term Biomet shall provide OI with a rolling
four-quarter forecast of its estimate of its demand for Product within 30 days
of the beginning of each calendar quarter for the next four calendar quarters,
commencing 30 days before the first
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Launch. Biomet's forecast for only the first such subsequent quarter of each
such forecast only shall be binding on both Biomet and OI. OI shall advise
Biomet within ten business days of receipt of each such forecast if the
forecasted requirements exceed OI's ability to supply.
5.10 Supply after the Term. [***] prior to the end of the Term, both
Parties will need to negotiate a supply agreement to take effect after the Term.
If the Parties are unable to agree upon the provisions of a supply agreement
between the Parties respecting sales of Products to Biomet after the Term, OI
shall have no obligation to continue to supply or cause any other entity to
supply Product to Biomet.
Article 6. Marketing of Products
6.1 Marketing. Except to comply with its obligations to comply with all
laws and regulations as required by Article 8.1.4, decisions with respect to
sales activities and marketing of Products shall be the sole responsibility of
Biomet, except as otherwise provided herein, and except that Biomet shall review
with OI prior to commercial use each of the promotional or labeling materials
for each Product.
6.2 Marketing Plan. Prior to its review by the Management Committee, Biomet
shall provide OI a copy of each marketing plan for each Product and each
revision thereto.
6.3 Commercialization Diligence. Except as required by its obligations to
comply with all laws and regulations as set forth in Article 8.1.4, throughout
the Term following Launch, Biomet shall use reasonable commercial efforts to
sell the Products.
6.4 Registration. OI shall be responsible for the registration of Products
in OI's name in the United States and the European Union. In any other country
in the Territory Biomet shall be responsible for the registration of Products in
its name, subject to the right of OI to refer to or obtain appropriate rights to
benefit from any such registration upon any failure, termination or expiration
of this Agreement with respect to any Product. Each Party will give reasonable
assistance to the other, without cost, to facilitate any such registration or
the use of any such registration to which one Party is entitled upon any
termination of any right in this Agreement. If any license to any Product
Application terminates for any reason, OI shall be deemed the owner of any xxxx
or other identifier of any Regulatory Approval, such as the CE xxxx in the
European Union.
6.5 Adverse Event. OI shall report to Biomet and Biomet shall report to OI
,as promptly as possible, any adverse experience or adverse experience
information associated with uses of Products that directly or indirectly relates
to but is not limited to hazards, contraindications, side effects, injuries,
toxicity and sensitivity reactions. Each Party shall be free to submit as
required by law such adverse experience information to such governmental
authorities as it deems appropriate, or to take other action as it deems
appropriate or required by applicable law or regulation, notwithstanding any
confidentiality agreement to the contrary.
6.6 Obligations in Case of Adverse Events. The obligations of either Party
with respect to any Product are expressly conditioned upon the absence of any
adverse conditions relating to the safety, quality or efficacy of that Product
that would reasonably justify that Party, after consulting with the other, in
exercising prudent and justifiable business judgment, in concluding that
development or marketing of Product should be delayed, suspended or stopped
altogether. The obligation to develop or market Product shall be delayed or
suspended only so long as any such condition or event exists.
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Article 7 - Minimum Performance Requirements
7.1 Minimum Purchases of Products. In order to retain the exclusive
licenses and rights granted to it by OI under this Agreement, Biomet shall
achieve total purchases from OI for each Product Application commencing with the
first calendar day of the thirteenth month after Launch and continuing
throughout the remainder of the Term as required by each approved Product Plan.
7.2 Proration. Minimum purchases shall be pro-rated for the first and last
partial calendar years after Launch during the Term so that minimum purchases
may otherwise be calculated on a calendar year basis.
7.3 Minimums for [***]. The minimum annual purchases of all Products
intended for the [***] Product Application shall be those required by the matrix
in Appendix C, attached.
7.4 Remedies. If Biomet fails to meet the minimum requirements in this
Article for any Product Application, by purchase within 30 days of the end of
any period to which the minimum applies of the required number of units of
Products within that Product Application, without the agreement of the
Management Committee, OI shall be deemed free thereafter to manufacture, sell,
have sold or sublicense any Product in that Product Application only and to use,
disclose and sublicense any Proprietary Technology Rights related to each such
Product: provided, however, if OI wishes to use any Biomet Technology to make,
use, sell, or offer to sell any such proposed Product, then Biomet agrees to
license such Biomet Technology for such purposes under mutually agreed upon and
commercially reasonable terms and conditions consistent with prevailing terms
and royalty rates in the medical device industry. The exclusive licenses herein
granted to Biomet for each such Product Application shall thereafter be deemed
void and of no effect, but all rights herein granted to Biomet for every other
Product Application as to which Biomet has timely achieved the minimums required
by this Article shall remain in full force and effect.
Article 8 - Representations and Warranties
8.1 Each Party represents and warrants solely to the other that:
8.1.1 Authority. It has the full right and power to enter into this
Agreement, perform it in accordance with its terms, and grant
the licenses set forth in this Agreement. To the best knowledge
of each Party as of the Effective Date there are no outstanding
agreements, assignments, or encumbrances which interfere or
conflict with any provision of this Agreement.
8.1.2 GAAP. All audited or unaudited financial statements,
manufacturing cost records, indirect cost records, reports of
sales, and Product Plan expenditures of each Party shall be
prepared in accordance with generally accepted accounting
principles (GAAP) consistently applied.
8.1.3 Business Efforts. It will use its reasonable commercial efforts
throughout the Term to develop, manufacture or have
manufactured, obtain Regulatory Approval for, Launch and sell
the Products, meet each obligation under this Agreement, and
comply with the decisions of the Management Committee.
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8.1.4 Compliance with all Laws. It will comply with all applicable
laws and regulations related to the development, manufacturing,
sale, and promotion of Products throughout the Term.
8.2 Representations of OI
8.2.1 With respect to its issued Patents, to the best of the knowledge
of OI as at the Effective Date (a) all issued Patents listed in
Appendix A on the Effective Date are valid and enforceable; (b)
there exists no publication or other reason that precludes the
patentability of the subject matter or the validity of its
Patents. and (c)it has no information as of the Effective Date
to indicate that any entity licensed hereunder by it with
respect to its Patents would not be free to make, use and sell
Product in the Territory without infringing any third party
patent.
8.2.2 Patent Rights. With respect to each Patent licensed to Biomet,
OI has good and marketable title, free and clear of all
encumbrances.
8.2.3 To the best of its knowledge as at the Effective Date no OI
Technology infringes the rights of any third party.
Article 9 - Conditions to Agreement
The obligations of Biomet under this Agreement shall be subject to the condition
(which may be waived in writing by Biomet) that OI shall have obtained any
necessary approvals from licensors from which it has acquired OI Technology
Rights as Biomet shall reasonably require.
Article 10 - Inventions and Patents
10.1 Ownership. Inventions made as a result of activities under this
Agreement, and any patents based on such Inventions, shall be owned and
controlled as follows:
10.1.1 if invented or discovered solely by one Party, ownership shall
vest solely in that Party; or
10.1.2 if invented or discovered jointly by both Parties ("Joint
Invention(s)"), each Party shall have an undivided one-half
ownership interest. OI shall control the preparation, filing,
prosecution and maintenance of any patents or patent application
at its expense on Joint Inventions related to novel manufacture
or processing of FortaFlex or Products, and Biomet shall control
the preparation, filing, prosecution and maintenance of any
patents or patent application at its expense on Joint Inventions
related to novel methods of use of any Product.
10.2 Joint Inventions. Each Party will notify and consult with the other
upon the preparation of any written Joint Invention report and the filing of any
patent or copyright application based on such Joint Inventions, provide the
other with a copy of any such invention report or patent application and any
issued patent granted thereon, and on request, update the other as to the status
of any such patent application. Each Party further agrees to sign documents to
vest or maintain title to patents in the owner(s) designated in Section 10.3 of
this Article, to provide upon request reasonable assistance to the other with
respect to preparation
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and prosecution of such patent applications, and to furnish to the other
all information and data in its possession reasonably necessary to obtain such
patents.
10.3 Alternative Patent Prosecution. In the event the owner or co-owner of
any Invention elects not to obtain or maintain patents on such invention in any
country, it will promptly notify the other Party, which may obtain or maintain
such patents at its own expense. In such circumstances, the owner or co-owner
agrees to have executed by its appropriate staff such documents as may be
reasonably tendered to it by the other to obtain, maintain, or perfect its title
to such patents and to furnish information and data in its possession reasonably
necessary to obtain such patents.
10.4 OI Right to Negotiate Licenses to Improvements. If Biomet solely
develops Improvements to OI Technology during the Term that are either not
otherwise licensed to OI under this Agreement or as to which OI wishes to obtain
a license upon any termination of this Agreement, including partial termination
as described in Article 13.3, OI shall have the right to license such
Improvements on a non-exclusive basis. OI will pay Biomet a mutually agreeable
consideration for such Improvements consistent with prevailing rates in the
medical device industry. In addition, Biomet will be reimbursed for the actual
costs associated with the transfer of information related to any such
Improvements.
Article 11 - Claims and Protection of Technology
11.1 Claims of Third Parties. In the event any third party asserts its
proprietary intellectual property rights against either Party as a result of the
manufacture, use, or sale of Products, the defense of such claim shall be
conducted in accordance with the mutual agreement of the Parties, and costs
associated with defending any litigation involving assertion of such rights and
any recovery shall be shared equally.
11.2 Protection of Technology. If a third party infringes any intellectual
property or property right (collectively "property right") that is licensed
under this Agreement, the Parties will make reasonable efforts to reach an
agreement concerning the merits and the sharing of expenses and liabilities in
connection with taking action against the third party. If the Parties can not
reach a mutually acceptable agreement concerning bringing the action, then the
following provisions will apply:
11.2.1 The owner of the property right as determined according to the
provisions of this Agreement, or the licensee of the property
right, as the case may be (the latter solely to the extent that
the licensee has the right to bring an infringement action),
shall have the sole and exclusive right, but not the obligation,
to bring an infringement action against the third party at the
owner's sole expense.
11.2.2 If the owner or licensee of the property right chooses not to
initiate action or xxxxx the infringement within ninety (90)
days from notice thereof, then the other Party shall, to the
extent permitted under any applicable license, have the right,
but not the obligation, to bring the action at the other Party's
sole expense.
11.2.3 If the property right is Joint Technology, then OI will be
deemed the owner and Biomet will be deemed the other Party for
the purpose of applying the provisions of this section.
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11.2.4 If one Party brings an infringement action against a third party
under this section, the other Party will provide reasonable
cooperation and agree to be joined as a party in the action, if
required by a court, provided that the Party bringing the action
pays the other Party's costs and expenses associated with the
joinder, if the other Party so wishes.
11.2.5 In all cases, and regardless of whether joinder is required, the
Party bringing the action will have control over selection of
counsel and handling of the action, including reaching a
reasonable settlement with the infringing party.
11.2.6 Notwithstanding the above provisions, if a third party brings
any counterclaim in connection with an infringement action
brought under this section, then the Party against whom the
counterclaim is asserted will be responsible for the costs,
expenses, and its respective liability in connection with
defending the counterclaim and will have control over selection
of counsel and handling of the action, including reaching a
reasonable settlement with the infringing party.
11.2.7 Any damages or awards received by either Party shall be divided
between the Parties in the proportion that the costs incurred by
each Party bears to the whole of such costs.
11.2.8 Notwithstanding the above, any settlements that affect the
integrity or intrinsic value of a property right will require
the approval of the owner of the property right.
Article 12 - Handling of Proprietary Information
12.1 Proprietary Information shall be safeguarded by the recipient, shall
not be disclosed to third parties and shall be made available only to
recipient's employees or consultants who agree to equivalent conditions and who
have a need to know for the purposes specified under this Agreement. These
mutual obligations of confidentiality shall apply throughout the Term, or for
five years after the disclosure date of any Proprietary Information, whichever
is later, but such obligations shall not apply to any information to the extent
that such information:
12.1.1 is or hereafter becomes generally available to the public other
than by reason of any default with respect to a confidentiality
obligation under this Agreement; or
12.1.2 was already known to the recipient as evidenced by prior written
documents in its possession; or
12.1.3 is disclosed to the recipient by a third party who is not in
default of any confidentiality obligation to the disclosing
Party hereunder; or
12.1.4 is developed by or on behalf of the receiving Party, without
reliance on confidential information received hereunder; or
12.1.5 is submitted to facilitate FDA Approval, provided that
reasonable measures shall be taken to assure confidential
treatment of such information; or
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12.1.6 is submitted to governmental agencies to facilitate the issuance
of marketing approvals and/or Regulatory Approvals for Products
hereunder, provided that reasonable measures shall be taken to
assure confidential treatment of such information; or
12.1.7 is provided to third parties under appropriate terms and
conditions including confidentiality provisions equivalent to
those in this Agreement for external testing and marketing
trials of Products hereunder; or
12.1.8 is used with the consent of the disclosing Party, which consent
shall not be unreasonably withheld, either in applications for
patents or copyrights submitted under the terms of this
Agreement, or in financial, technical or product information
prepared in the ordinary course of the business required by the
terms of this Agreement; or
12.1.9 has been approved for publication by each of the Parties; or
12.1.10 is otherwise required to be disclosed in compliance with
applicable laws or regulations or order by a court or other
regulatory body having competent jurisdiction.
Article 13 - Expiration and Termination of Agreement
13.1 Expiration of Agreement. This Agreement shall expire upon the date of
the last to expire of the Patents pertaining to any Product that has been
Launched. Upon expiration, if Biomet wishes to use any OI Technology, Joint
Technology or Trademark, rights in which remain enforceable after expiration, it
will negotiate an appropriate license to that technology from OI on terms
acceptable to both parties.
13.2 Termination of Product Development at Biomet's Option. This Agreement
may be terminated in its entirety by Biomet on one hundred eighty (180) days
prior written notice, given not sooner than one year after the Effective Date,
without further financial obligation of Biomet relating to research and
development of Products. In the event Biomet provides this notice of
termination, OI shall mitigate any further expenses during such one hundred
eighty-(180) day period.
13.3 OI's Partial Termination Rights. The right of OI to terminate its
exclusive rights granted herein to one or more Product Applications or Products,
(a) in the case of failure of the Management Committee to approve a Product Plan
(Article 4.1.4), (b) in the case of Biomet's failure to fund development of a
Product, (Article 4.2.8), (c) in the case of its failure to Launch a Product,
(Article 4.3.2), or (d) in the case of its failure to meet a minimum requirement
for any Product (Article 7), and the effects thereof, shall be governed by the
respective provisions of this Agreement dealing with each of those subjects.
13.4 Termination for Breach or Insolvency. Notwithstanding the foregoing,
this Agreement shall be terminable at the option of either Party upon written
notice to the other Party if:
13.4.1 the other Party is in material breach or default with respect to
any material term or provision hereof and fails to cure the same
within ninety (90) days
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after written notice thereof, or such shorter time as is
specifically set forth in any term of this Agreement. The right
of either Party to cure any breach of any term of this Agreement
shall not extend to more than one such breach of that term in
any 12 months nor to more than 3 such breaches of that term
throughout the Term;
13.4.2 the other Party is adjudged bankrupt, files or has filed against
it any petition under bankruptcy, insolvency or similar law, has
a receiver appointed for its business or property, or makes a
general assignment for the benefit of creditors, and such
condition is not remedied or removed within ninety (90) days; or
13.4.3 the other Party shall begin any proceeding for the liquidation
or closing of its business or for the termination of its
corporation charter. Termination of the licenses granted by a
nondefaulting Party shall not affect the licenses granted to the
nondefaulting Party by the defaulting Party.
13.5 Effects of Termination. In the event of termination of this Agreement
by either Party, rights to any Product shall be returned to OI, which shall
thereafter have exclusive right, title and interest therein, including such
rights to all preclinical or clinical data and Proprietary Technology Rights
related thereto, and the licenses granted by OI herein pertaining to that
Product, technology or Trademark shall be void. Upon any such termination, OI
shall have the right, but not the obligation to repurchase from Biomet any
in-date Product in Biomet's inventory at Biomet's cost.
13.6 Rights and Obligations Prior to Termination. No termination or partial
termination under this Agreement shall affect the rights or obligations of
either Party with respect to the performance of either Party prior to
termination.
Article 14 - Assignability
Neither this Agreement nor any interest hereunder shall be assignable by either
Party without the written consent of the other, and any attempted assignment
without such consent shall be null and void, provided, however, that either
party may, without such consent, assign this Agreement to its successors in the
event of the merger with, or sale of substantially all of the assets or
consolidation of the business with which the Products are associated to, another
company. This Agreement shall be binding upon the successors and permitted
assignees of the Parties. Any such successor or permitted assignee shall be
subject to the same rights and obligations as the original Party hereunder.
Article 15 - Export Licenses
This Agreement, and any technical information provided under this Agreement, is
subject to restrictions concerning the export of products or technical
information from the United States that may be imposed by the U.S. Government.
Accordingly, each Party agrees that it will not export, directly or indirectly,
any technical information acquired under this Agreement or any products
utilizing any such technical information to any country for which the U.S.
Government or any agency thereof at the time of export requires an export
license or other governmental approval, without first obtaining the written
consent to do so from the Department of Commerce or other agency of the U.S.
Government when required by an applicable statute or regulation.
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Article 16 - Correspondence and Notice
16.1 Biomet. Until otherwise notified in writing by Biomet, all
documentation, reports, correspondence and notices by OI required hereunder
shall be effective upon delivery via e-mail, first class mail or express courier
(or via fax with a confirmation copy via first class mail) and shall be
addressed to:
Biomet , Inc.
00 Xxxx Xxxx Xxxxx
X.X. Xxx 000
Xxxxxx, Xxxxxxx 00000-0000
Fax (000) 000-0000
Attention: Chairman
16.2 OI. Until otherwise notified in writing by OI, all documentation,
reports, correspondence and notices by Biomet required hereunder shall be
effective upon delivery via e-mail, first class mail or express courier (or via
fax with a confirmation copy via first class mail) and shall be addressed to:
Organogenesis Inc.
000 Xxx Xxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Fax (000) 000-0000
Attention: President & CEO
Article 17 - Indemnification and Claims
Each Party (an "Indemnifying Party") hereby indemnifies and holds the other, its
licensees, sublicensees, assignees, employees, agents, officers and directors
(the "Indemnified Parties") harmless from any claim, loss, injury, death, cost
or damage of any kind (including all costs and attorney's fees attributable
thereto) suffered by any of the Indemnified Parties arising out of the
development, manufacture, use or sale of any Products by the other Party or
arising out of the performance under this Agreement by the other Party, and
agrees to save the Indemnified Parties harmless and waive subrogation rights
with respect to any such claim, loss, injury, death, cost or damage, provided,
however, that such loss, injury, cost, or damage does not arise out of any of
the Indemnified Parties' negligence or willful misconduct in respect of such
Product or its performance under this Agreement. The Parties recognize that
product liability insurance will be necessary upon commercialization of
Products. Therefore, the Parties agree to meet and discuss the acquisition of
product liability insurance prior to such Launch upon terms consistent with
industry standards. Notwithstanding the foregoing, Biomet does not waive or in
any way compromise, modify or diminish its rights and remedies or release OI
from its obligations and liabilities with respect to any third party product
liability or other claim that may be asserted against Biomet based upon an
actual or alleged defect in the manufacturing, design, materials or workmanship
of any or all Products.
Article 18 - Arbitration
The Parties agree to attempt to settle any dispute under this Agreement by
mutual discussion and consent. Any dispute or claim arising out of this
Agreement that cannot be so settled shall be settled by arbitration conducted in
accordance with the Commercial Arbitration Rules, then obtaining, of the
American Arbitration Association, and judgment upon the award rendered may be
entered by any court of competent jurisdiction. Any arbitration commenced by one
Party
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against the other shall take place in the jurisdiction of the other, excluding
cross-actions. The costs of the arbitration, including administrative and
arbitrators' fees, shall be shared equally by the Parties. Each Party shall bear
its own costs and attorneys' and witness' fees. A disputed performance or
suspended performances pending the resolution of the arbitration must be
completed within thirty (30) days following the final decision of the
arbitrators or such other reasonable period as the arbitrators determine in a
written opinion. The arbitrator is not empowered to award punitive damages, or
damages in excess of compensatory damages, and each Party irrevocably waives any
right to recover such damages with respect to any dispute resolved by
arbitration. The arbitrator shall have the authority and discretion to award
costs and reasonable attorneys' fees to the prevailing Party. Notwithstanding
the foregoing, neither the duty nor the right to arbitrate any dispute between
the Parties extends to any failure of the Management Committee to agree to any
matter that is delegated to the Management Committee by this Agreement (nor does
the duty or right to arbitrate extend to the appeal to the respective CEO's of
the Parties of any failure of the Management Committee to agree as set forth in
Article 3.2), except that the failure of the Management Committee or the
subsequent failure of the CEO's of the Parties to approve any Product Plan
pursuant to Article 4.1.2 shall be arbitrable pursuant to this Article. Both any
agreement by the Management Committee and the failure of the Management
Committee to agree to any other matter so delegated shall be final and
unappealable to any external forum by either Party. Neither Party shall commence
any action in any court to resolve any dispute hereunder except to confirm such
an arbitrator's award. Commencement of any such action shall be a breach of this
Agreement entitling the other Party to terminate this Agreement forthwith.
Article 19 - Force Majeure
Neither Party shall be liable for any delay or default in performance caused by
conditions beyond the Party's control, including but not limited to acts of God,
strikes, or unavailability of materials.
Article 20 - Miscellaneous
20.1 No Implied Licenses. Except as expressly provided for in this
Agreement, nothing contained herein shall be construed as conferring any license
or other rights, by implication, estoppel or otherwise, under any patent
(including design patent and utility model patent) or patent application, or any
copyrights, trademarks, trade names or trade dress.
20.2 No Implied Trademark Licenses. Nothing contained in this Agreement
shall be construed as conferring any right to use in advertising, publicity or
other promotional activities any name, trade name, trademark, or other
designation other than any Trademark (including any contraction, abbreviation,
or simulation of any of the foregoing); and each Party hereto agrees not to use
any designation of the other Party in any promotional activity associated with
this Agreement, or with products licensed hereunder, without the express written
approval of the other Party.
20.3 Modification. This Agreement with its schedules constitutes the entire
agreement between the Parties with respect to the subject matter hereof, and all
prior agreements respecting the subject matter hereof, either written or oral,
expressed or implied, shall be null and void and of no effect, except that any
proprietary information agreement previously executed by the Parties shall be
null and void only to the extent that it reasonably would be construed to
otherwise govern confidentiality of the subject matter of this Agreement. No
additions to, deletion from, or modification of any of the provisions of this
Agreement shall be binding upon the Parties hereto unless made in writing and
signed by a duly authorized
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representative of each such Party.
20.4 No Waiver. The failure of either Party hereto at any time or times to
require performance of any provision hereof shall in no manner affect the right
of such Party at a later time to enforce the same. No waiver by any Party hereto
of any condition, or of the breach of any provision, term, covenant,
representation, or warranty contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be or construed as a
further or continuing waiver of any such condition or of the breach of any other
provision, term, covenant, representation, or warranty of this Agreement.
20.5 Publicity. In the absence of prior written approval of the other
Party, neither Party shall originate any publicity, news release, or other
public announcement, written or oral, whether to the public press, to
stockholders or otherwise, relating to this Agreement, to any amendment hereto
or activities hereunder, unless such announcement is required by law to be made.
The Party making any such announcement shall give the other Party an opportunity
to review the announcement before it is made. After the publication of the first
mutually agreed upon announcement, routine references to this Agreement and the
arrangements hereunder without undue frequency and without emphasis shall be
allowed in the usual course of business to the extent of the previous mutually
agreed upon announcement.
20.6 Severability. If any provision(s) of this Agreement shall be held to
be illegal, invalid or unenforceable by a court of competent jurisdiction, the
validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby in that jurisdiction, and the whole of
this Agreement shall remain in effect in every other jurisdiction. The Parties
shall amend the Agreement to the extent feasible to lawfully include the
substance of the excluded term in the affected jurisdiction to as fully as
possible realize the intent of the Parties and their commercial bargain.
20.7 Law Governing. This Agreement shall be interpreted, construed, and
governed in accordance with the laws of the Commonwealth of Massachusetts
without regard to conflicts of laws principles.
20.8 Survival. The following provisions (and the definitions of any term
used in any such provision) shall survive any termination or expiration of this
Agreement: 4.2.7, 6.5, 6.6, Article 11, Article 12, Article 13.5, Article 17,
Article 18, and this paragraph.
20.9 Headings. The headings in this Agreement are for the convenience of
the Parties only, and shall not be used to modify or affect the meaning of any
term of this Agreement.
IN WITNESS WHEREOF the Parties have executed this Agreement as of the date
first above written:
Biomet Inc. Organogenesis Inc.
By: /s/ Xxxxxxx Xxxxx Xxxxxxxx By: /s/ Xxxxxxx Xxxxxxxxxx
----------------------------------- -------------------------------
Title: Vice President Biomaterials Title: President & CEO
--------------------------------- ----------------------------
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APPENDIX A
BIOMET/Organogenesis PRODUCT DEVELOPMENT
AND SUPPLY AGREEMENT, PATENTS
Peracetic acid sterilization
----------------------------
USA Patent No. 5,460,962 Issued 24-Oct-95
Mexico Patent No. 193892 Issued 29-Oct-99
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
Tissue repair fabric
--------------------
USA Patent No. 5,733,337 Issued 31-Mar-98
Australia Patent No. 711900 Issued 03-Feb-00
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
Chemical cleaning of biological material
----------------------------------------
USA Patent No. 5,993,844 Issued 30-Nov-99
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
[***]
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
[***] [***] [***]
[***]
[***] [***] [***]
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APPENDIX B
BIOMET/Organogenesis PRODUCT DEVELOPMENT
AND SUPPLY AGREEMENT, SPECIFICATIONS
Specifications for the formulation of each Product will be agreed to or amended
from time to time during the Term and as each is agreed to or amended by the
Management Committee, attached as part of this Appendix.
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APPENDIX C
Joint Organogenesis/Biomet Product Plan
Product Application: [***]
Product Description
----------------------------------- --------------------------------------------
----------------------------------- --------------------------------------------
Material (layers, crosslinking, [***]
hydration, etc.)
----------------------------------- --------------------------------------------
Size TBD
----------------------------------- --------------------------------------------
Shape TBD
----------------------------------- --------------------------------------------
Package Heat sealed blister package with foil lid
inside a heat sealed pouch. Sterile inner
and outer package.
----------------------------------- --------------------------------------------
Intended Uses
------------------------------------------------
----------------------------------- --------------------------------------------
Conditions o [***]
o [***]
o [***]
o [***]
----------------------------------- --------------------------------------------
Procedures o [***]
----------------------------------- --------------------------------------------
Treatment Settings o Hospital, inpatient or outpatient
----------------------------------- --------------------------------------------
Markets/Countries o All major markets
----------------------------------- --------------------------------------------
Key Features
------------------------------------------------
----------------------------------- --------------------------------------------
Required o [***]
o [***]
o [***]
o [***]
o [***]
----------------------------------- --------------------------------------------
Desirable Characteristics o [***]
o [***]
o [***]
o [***]
o [***]
----------------------------------- --------------------------------------------
o Product Variations
|X| Next generation: TBD
----------------------------------------------
|X| Kits: TBD
---------------------------------------------------------
|X| Combination Products: TBD
-----------------------------------------
o Potential for new IP, Patents: TBD
-----------------------------------------
---------------------------------------
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* CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERICKS DENOTE OMISSIONS.
----------------------------- ---------------------- ------------- -------------- ------------- ----------------------
Materials Time per
Development Process Description Needed Process Cost Resp. Party
----------------------------- ---------------------- ------------- -------------- ------------- ----------------------
[***] Studies Biomechanical [***] TBD [***] [***] Biomet/Organogenesis
----------------------------- ---------------------- ------------- -------------- ------------- ----------------------
----------------------------- ---------------------- ------------- -------------- ------------- ----------------------
[***] Studies [***] study TBD [***] [***] Biomet
----------------------------- ---------------------- ------------- -------------- ------------- ----------------------
----------------------------- ---------------------- ------------- -------------- ------------- ----------------------
[***] Studies [***] TBD [***] [***] Organogenesis
----------------------------- ---------------------- ------------- -------------- ------------- ----------------------
Validation Studies TBD
----------------------------- ---------------------- ------------- -------------- ------------- ----------------------
[***] [***] TBD [***] [***] Biomet
----------------------------- ---------------------- ------------- -------------- ------------- ----------------------
[***] Studies TBD
----------------------------- ---------------------- ------------- -------------- ------------- ----------------------
Anticipated Collaboration TBD
Needs
----------------------------- ---------------------- ------------- -------------- ------------- ----------------------
*Full series not expected since product is substantially equivalent to other Organogenesis ICL products
----------------------------------------------------------------------------------------------------------------------
Worldwide Minimum Biomet Purchases of Product from OI
----------------------------------------------------------------------------------------------------------------------
Year 1 Year 2 Year 3 Year 4 Year 5
------------------------------------ --------------- ---------------- --------------- ---------------- ---------------
[***] [***] [***] [***] [***] [***]
------------------------------------ --------------- ---------------- --------------- ---------------- ---------------
Approved:
/s/ Xxxxxxx X. Xxxxx /s/ Xxxxxxx Xxxxx Xxxxxxxx
------------------------------------ --------------------------------------
Organogenesis Inc. Biomet
Name: Xxxxxxx X. Xxxxx Name: Xxxxxxx Xxxxx Xxxxxxxx
Title: Director, New Products Title: Vice President Biomaterials
Date: 8/26/01 Date: 8/26/01
Page 24 of 25
* CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERICKS DENOTE OMISSIONS.
APPENDIX D
BIOMET/Organogenesis PRODUCT DEVELOPMENT AND SUPPLY
AGREEMENT, DIRECT & INDIRECT COSTS
Definition of "DIRECT COSTS" and "INDIRECT COSTS"
"DIRECT COSTS" means costs incurred with respect to the development work,
manufacturing, inventory and related activities for each Product Plan and shall
be equal to the sum of Material Costs and Direct Labor Costs which are defined
as follows:
(a) "Material Costs" shall mean the prices paid for raw material components and
purchased goods, including any packaging which may be necessary for
shipment, which are purchased from outside vendors, plus any freight,
taxes, duties and other acquisition charges where applicable.
(b) "Direct Labor Costs" shall mean the costs associated with the total labor
hours directly required for or related to the development work,
manufacturing, inventory and related activities for each Product Plan
(including salaries, wages, bonuses, overtime, payroll taxes and fringe
benefits).
"INDIRECT COSTS" shall mean all other costs related to the development work,
manufacturing, inventory and related activities for each Product Plan, including
expenses associated with quality assurance, quality control, validation,
manufacturing, engineering, purchasing, facilities and materials management.
These expenses will include an allocation of depreciation, occupancy, spoilage
and general and administrative costs specifically associated with the plant or
plants manufacturing the product (collectively "Overhead Costs"); provided,
however, that Overhead Costs shall be allocated to the product based on the
percentage of the manufacturing facility used for the product in the event that
the product is manufactured either in a facility that is also used to
manufacture products other than the product, or in a facility that is not used
to full capacity in manufacturing the product.
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