EXHIBIT 10.8
[LETTERHEAD OF FUSION MEDICAL TECHNOLOGIES, INC.]
PURCHASE AGREEMENT
This Agreement effective this 1st day of January, 1997 and is by and between
Spear Products a _________ Corporation, (hereinafter "Seller") and Fusion
Medical Technologies, Inc., a Delaware Corporation, (hereinafter "Buyer").
WHEREAS, Buyer desires to purchase from Seller and Seller desire to sell to
Buyer under the terms and conditions set forth, herein.
NOW THEREFORE, the parties wishing to be legally bound by this contract, agree
as follows:
1. PRODUCT: Spear Products' Product Name, Bovine Calf Corium, meeting the
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specifications set forth in Schedule A ("Product"), which is attached to and
made part of this Agreement. Such specifications may be changed from time to
time only as agreed to in writing by the parties.
2. DURATION: Subject to Section 23 below, From January l, 1997 and for the
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following two (2) years, unless otherwise agreed in writing by the parties. This
Agreement shall be automatically renewed for successive one (l) years terms
thereafter unless either party notifies the other party to the contrary not less
than ninety (90) days prior to the expiration of the then current term.
3. QUANTITIES: Subject only to other provisions of this Agreement, Seller shall
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sell Buyer, and Buyer shall purchase from Seller the minimum quantities of
product in each calendar quarter of this Agreement, set forth in Schedule B
attached hereto Thirty (30) days prior to the expiration of the last quarter of
Schedule B, Buyer will supply a non-binding forecast to Seller for the amount of
Product Buyer anticipates purchasing during the subsequent four quarter period
("Forecast"). The Forecast will be updated semi-annually by Buyer. The first two
quarters of the Forecast presented to Seller shall be binding ("the Binding
Forecast"). Buyer will supply a semi-annual forecast to Seller not less than
fourteen (14) days prior to the end of the preceding six month period for
Product to be purchased during the subsequent six months.
4. ORDER AND DELIVERY: Buyer shall issue a purchase order for each delivery of
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Product under this Agreement. Each purchase order shall state the desired
shipment date and the quantity being ordered. Buyer shall also state what
percentage of the quantity is to be shipped. Seller shall acknowledge promptly
each purchase order issued by Buyer in writing and confirm delivery dates to
destinations specified by Buyer; however, delivery dates must not conflict with
Seller's normal manufacturing lead times which shall not exceed 2 weeks. If any
terms and conditions contained in such purchase order or acknowledgment conflict
with the terms of the Agreement, the terms and conditions of this Agreement
shall apply to the transaction.
ADDITIONAL QUANTITIES: During the initial term of this Agreement (which expires
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2 years after execution), Seller will supply in any given year up to 200% of the
expected semi-annual
purchase quantities indicated in Buyer's semi-annual forecast without further
Agreement. Following the initial term of this Agreement, Seller will supply in
any given period up to 200% of the expected semi-annual purchase quantities
indicated in Buyer's semi-annual forecast without further agreement. In the
event that Buyer requires in any period quantities which exceed 200% of the
forecasted semi-annual quantity, Buyer shall so notify Seller in writing at
least ninety (90) days in advance of Buyer's desired shipping date. Seller shall
use its reasonable efforts (consistent with good business practice) to meet
Buyer's requirements for such additional Product and shall inform Buyer within
30 days of notice whether or not Seller will supply all or a portion of such
requirements.
6. FAILURE TO PURCHASE MINIMUM QUANTITIES: In the event that Buyer fails to
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purchase in a given 6 month period the forecasted semi-annual purchase quantity,
Buyer will pay to Seller within 60 days of the close of the period in which the
shortfall occurs an amount equal to 100% of the contract price for the
unpurchased Product, which is the difference between the forecasted semi-annual
quantity and the quantity actually purchased during such year. Buyer's
obligations under this Section 6 are conditioned upon Seller's delivery to
Buyer within sixty (60) days after the end of any such 6 month period of an
amount of Product equal to the difference between the Binding Forecast quantity
and the quantity actually purchased by Buyer during such calendar year.
7. PRICE: The price for the Product shall be forty-two dollars per pound
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($42/1b) of product plus the appropriate shipping costs. Buyer will be invoiced
for the Product and shipping costs upon shipment. The price may be adjusted by
Seller annually by so notifying Buyer in writing at least thirty (30) days prior
to the effective date of such change. Such Price shall be paid for all Product
shipped hereunder on and after the date it becomes effective, unless
subsequently again revised by Seller as provided herein. The total cumulative
price increase may not exceed on a percentile basis the cumulative increase in
the CPPI (i.e., Products Price Index for Chemicals and Allied Products, as
published by the United States Department of Labor, Bureau of Labor Statistics)
between the effective date of this Agreement and the date of the proposed price
increase. If other cost factors such as, without limitation, raw material costs,
regulatory costs, or product liability costs, elicit a price increase greater
than that permitted by this Section, Seller will give written notice to Buyer at
least ninety (90) days in advance of the effective date of such increase. Buyer
may accept such price increase or elect to terminate this Agreement. If Buyer
elects to terminate according to the terms of this section, Seller will continue
to provide Buyer with product hereunder at the current contract price for ninety
(90) days.
8. WARRANTY: Seller warrants that the Product shipped hereunder meets the
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specifications set forth in Schedule A. Other than the foregoing, SELLER MAKES
NO WARRANTIES OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE EVEN IF
THAT PURPOSE IS KNOWN TO SELLER, NOR ANY OTHER EXPRESS OR IMPLIED WARRANTY.
Buyer assumes all risk and liability for results obtained by the use of Product
(provided they meet Specifications as defined in Schedule A herein) covered by
this Agreement, whether used singly or in combination with other products.
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9. INDEMNIFICATION:
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(a) Indemnification by Seller. Subject to the following terms and conditions,
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Seller agrees to indemnify, defend and holds harmless Buyer and each of its
shareholders, affiliates and their respective, directors, officers, employees,
attorneys, agents, and representatives from and against any and all claims,
losses, damages, liabilities, demands, causes of action, proceedings and suits,
including all reasonable attorneys' fees and expenses ("Claims"), arising out
of, relating to or in connection with any failure to meet the Specifications set
forth in Schedule A. Buyer agrees that Seller has the right to defend, or at its
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option to settle, and Seller agrees, at its own expense, to defend or at its
option to settle, any Claims brought against Buyer by any third party for
infringement of any U.S. patent or worldwide copyright or trade secret by the
Product and Seller agrees to indemnify, defend and hold harmless Buyer from and
against any Claims related thereto, provided, however, that Seller assumes no
infringement liability for (x) any combination of Product with other products
not provided by Seller, which infringement would not arise from Product standing
alone, or (y) the modifications of such Product by Buyer or any third party
where such infringement would not have occurred but for such modifications, or
(z) materials furnished by Buyer. If it is adjudicatively determined that any
Product infringes a third party's U.S. patent or worldwide copyright or trade
secret, or if the sale or use of the Product is, as a result, enjoined, then
Seller may, at its option and expense either; (i) procure for Buyer the right
under such patent, copyright or trade secret to use the Product; or (ii) replace
the Product with functionally equivalent noninfringing products; or (iii) modify
the Product to make the Product functionally equivalent and noninfringing. THE
FOREGOING PROVISIONS OF THIS SECTION STATE THE ENTIRE LIABILITY OF SELLER AND
THE EXCLUSIVE REMEDY OF BUYER WITH RESPECT TO ANY ALLEGED INFRINGEMENT OF
PATENTS, COPYRIGHTS, TRADEMARKS OR OTHER INTELLECTUAL PROPERTY RIGHTS BY THE
PRODUCT.
(b) Indemnification by Buyer. Subject to the following terms and conditions,
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Buyer agrees to indemnify, defend and hold harmless Seller and shareholders,
affiliates and their respective, directors, officers, employees, attorneys,
agents and representatives from and against any and all Claims arising out of,
relating to or in connection with the use or sale of the Product in Buyer's
applications or applications development.
(c) Indemnification Procedures. In the event that any Claims are asserted by
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any third party which may give arise to any damage, liability, loss or cost or
expense in respect of which either party has indemnified the other party under
this Section, the indemnified party shall give the indemnifying party written
notice of the institution of such proceedings, or the assertion of such Claim
promptly after the indemnified party first becomes aware thereof. The
indemnifying party shall have sole control over the defense and/or settlement of
any such Claim; provided that the indemnified party may participate in any such
proceedings with counsel of its choice at its own expense. Each of the parties
agrees to cooperate fully with each other in connection with the defense,
negotiation or settlement of any such Claim and provide full information to the
indemnifying party. Notwithstanding anything to the contrary contained in this
Section, neither party shall be liable for any costs or expenses incurred by an
indemnified party without its prior written authorization.
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10. USE OF TRADEMARK: Each party agrees that it will not, without the other
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party's prior written consent, use and/or associate the other party, the other
part's corporate name or any of the other party's trademarks, either orally or
in writing, with any of the other party's products, except that Buyer may use
Seller's name and associate Seller with Buyer's Application as is required by
federal or state regulation in gaining approval to market or to continue
marketing Buyer's Application.
11. QUALITY CONTROL INSPECTION AND CLAIMS: Seller will obtain from his
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supplier the appropriate certifications that may be required to meet the
requirements of Buyer as outlined in Schedule A and shall be subjected to
quality control Product inspections by Buyer in accordance with CFR's, ISO 9001
or both. Buyer shall have the right to make changes to Schedule A with l0 days
written notice to Buyer. If Buyer's Product inspection shows that the Product
fails to meet the specifications contained in Schedule A, Buyer shall notify
Seller within ten (10) days of receipt of the non-conforming Product. Upon
Seller's confirmation which shall be given within ten (10) days of Buyer's
notice to Seller, Seller will provide Buyer with full credit, refund or
replacement for the shipment containing the non-conforming product, and shall
reimburse Buyer for actual costs of such inspection, including testing, shipping
and insurance in an amount up to ten (10%) percent on the purchase price of the
non-conforming Product. At any time during this Agreement, Buyer will have the
right to inspect Seller's Product production processes, and shall have access to
such documentation, personnel and facilities sufficient to establish that
Seller's Product production is in accordance with GMP. Seller will promptly
provide Buyer with all documents generated by regulatory authorities that relate
to the Product.
12. DELIVERIES: Deliveries shall be F.O.B. Lansdale, PA, U.S.A. via overnight
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delivery through Federal Express or other comparable delivery company. Buyer
shall be responsible for all delivery costs and will be invoiced for such by
Seller. Title to and risk of loss in all Product sold hereunder shall pass to
Buyer upon loading for shipment at Seller's plant.
13. TERMS OF PAYMENT: Buyer will pay to Seller the invoiced amount paid net
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cash thirty (30) days from date of Seller's invoice. Seller may impose a late
payment service charge of 1.5% per month on invoices not paid when due. All
payments shall be in United States currency.
14. FORCE MAJEURE: No liability shall result from delay in performance, or
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nonperformance, caused by circumstances beyond the control of the party
affected, included, but not limited to, Act of God, fire, flood, war. Government
action, accident, labor trouble or shortage, inability to obtain material,
utilities, equipment or transportation. Quantities so affected may be eliminated
from the Agreement without liability, but the Agreement shall remain otherwise
unaffected. Any party claiming the benefit of this Article shall promptly so
notify the other party.
15. ALLOCATION: In the event of Seller's inability for any reason to supply
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the total demands for Product, Seller may with sixty (60) days notice to Buyer
distribute its available supply among all purchasers, according to the following
requirements. Seller shall first supply Buyer up to 100% of its committed order,
after such order has been satisfied, Seller may then fill
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all other orders on such a basis as it may deem fair.. Seller shall have no
obligation to purchase supplies of Product to enable it to perform this
Agreement.
16. GOVERNMENT APPROVALS: Seller shall manufacture Product under this Agreement
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according to accepted good manufacturing practices (GMP) in accordance with the
protocols provided by the Buyer. Any changes to the manufacturing process or
specifications relating to the final product must be agreed to in writing by
both parties before such changes are implemented. Upon terms of confidentiality
acceptable to Seller, Seller agrees to cooperate with Buyer in obtaining any
such governmental approvals, including providing required information to the FDA
or any other governmental agency requesting the information to the extent such
information is readily available or can be developed at little or not cost to
Seller, unless Buyer agrees to fund such information research.
17. DOCUMENTS INCORPORATED BY REFERENCE: The following documents are hereby
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incorporated by reference:
A. Schedule A entitled "Product Specifications"
dated January 1, 1997 and mutually agreed revisions.
B. Schedule B entitled "Annual Minimums"
dated January 8, 1997 and mutually agreed revisions.
18. ADVERSE EFFECTS: Buyer will investigate all adverse effects of which Buyer
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has direct or indirect knowledge, in regard to any of Buyer's Application which
incorporate Product and promptly report to Seller any such effects that may
relate to Product.
19. COMPLIANCE WITH LAW: Each party represents that it is and will remain in
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compliance with all applicable federal, state and local laws, regulations and
orders.
20. INDEPENDENT CONTRACTOR: The employees, methods, equipment and facilities
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of each party shall at all times be under that party's exclusive direction and
control. Buyer's relationship to Seller under the Agreement shall be that of an
independent contractor and nothing in this Agreement shall be construed to
constitute either party, or any of its employees, an agent, associate, joint
venture or partner of the other party.
21. NOTICES: All notices required hereunder shall be sent by certified mail
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return receipt requested, or by telex confirmed by such certified mail, to the
party to be notified at its following address or at such other address as shall
have been specified in written notice from the party to be notified. If to
"Seller", addressed to: Spear Products ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, attn:
▇▇▇▇▇ ▇▇▇▇▇▇. If to "Buyer", addressed to Fusion Medical Technologies, Inc.,
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇.
22. ASSIGNMENT: This Agreement is not assignable or transferable, in whole or
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in part, without the prior written consent of either party except for any entity
that acquires all or substantially all of the business or assets of a party to
which this Agreement pertains, whether by merger, reorganization, acquisition,
sale or otherwise.
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23. TERMINATION: If either party defaults in the performance of any material
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provision of this Agreement, then the non-defaulting party may give written
notice to the defaulting party that if the default is not cured within sixty
(60) days, the agreement will be terminated. If the non-defaulting party gives
such notice and the default is not cured during the sixty-day period, then the
Agreement will automatically terminate at the end of that period. In accordance
with Section 2, either party may terminate this Agreement by giving six (6)
months written notice to the other party. Upon termination, the rights and
obligations set forth in sections 8, 9, 11, 22, 24, 26, 28 shall survive.
24. CLAUSE HEADINGS: The heading of clauses contained herein are used for
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convenience and ease of reference and shall not limit the scope or intent of the
clause.
25. ENTIRETY OF AGREEMENT: This Agreement embodies the entire agreement and
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understanding between Seller and Buyer relative to the subject matter hereof
that are not merged or suspended hereby. No amendment, modification or release
from any provision hereof shall be of any force or effect unless it is in
writing, signed by the party claimed to be bound thereby, and specifically
refers to this Agreement.
26. WAIVER: No waiver by either party or any breach of the covenants herein
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contained to be performed by the other party shall be construed as a waiver of
any succeeding breach of the same or any other covenants or conditions hereof.
27. GOVERNING LAW: This Agreement shall be governed by and interpreted in
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accordance with the laws of the State of Pennsylvania. The courts of the State
of Pennsylvania shall have exclusive jurisdiction of all claims arising from
this Agreement except claims relating to payment of products.
28. SEVERABILITY. If any provision of this Agreement shall be held by a court of
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competent jurisdiction to be contrary to law, such provision shall be changed
and interpreted so as to best accomplish the objectives of the original
provision to the fullest extent allowed by law and the remaining provisions of
this Agreement shall remain in full force and effect.
Accepted:
Spear Product Fusion Medical Technologies, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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Title: ▇▇▇▇▇ ▇▇▇▇▇, President Title: VP, R & D
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Date: 1-20-97 Date: 1-8-97
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SCHEDULE A
January 1, 1997
PRODUCT SPECIFICATIONS
SPECIFICATIONS
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Product Raw bovine calf corium
Age of animal No greater than six (6) months of age
Packaging Plastic wrapped in 51b quantities
Labeling Package marked with supplier lot number, Fusion's purchase
order number, net weight, and labeled "bovine calf splits"
Transportation Ship frozen by FED-X (or Equivalent) Overnight Priority
Delivery
Storage Store frozen within 6 hours of harvesting corium
CERTIFICATION OBTAINED FROM SUPPLIER
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A SIGNED CERTIFICATION SHEET FROM SUPPLIER SHALL ACCOMPANY EACH LOT OF MATERIAL
AND CONTAIN THE FOLLOWING:
1. CERTIFICATION OF HIDE SOURCE BY SUPPLIER AS TO THE FOLLOWING ITEMS:
. USDA AND EUROPEAN STANDARDS FACILITY
. VETERINARIAN ON SITE
. HIDES OF U.S. ORIGIN
. ANIMAL AGE
. ANIMALS HAVE NOT BEEN FED RUMINANT PROTEIN or ANIMALS HAVE ONLY
BEEN FED VEGETABLE PROTEINS.
. ANIMALS HAVE BEEN CERTIFIED BY VETERINARIAN TO BE FIT FOR HUMAN
CONSUMPTION
. HIDES SHALL BE REMOVED FROM ▇▇▇▇▇▇▇▇▇ AREA AS SOON AS POSSIBLE
FOLLOWING ▇▇▇▇▇▇▇▇▇
2. SUPPLIER LOT NUMBER AND FUSION PURCHASE ORDER NUMBER ON CERTIFICATION.
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SCHEDULE B
ANNUAL MINIMUMS
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QUARTER REQUIREMENT (LBS)
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Fusion Medical Technologies, Inc. Spear Products
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By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Name/Title: ▇▇▇▇ ▇. ▇▇▇▇▇, V.P. Research Name/Title: ▇▇▇▇▇ ▇▇▇▇▇, President
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Date: January, 8, 1997 Date: January 20, 1997
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