Exhibit 10.9
CONTRACT MANUFACTURING AGREEMENT
This Contract Manufacturing Agreement ("Agreement") is made as of February 28,
2001 (the "Effective Date") between Peak Industries, Inc., ▇▇▇▇ ▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Peak") and Aksys, Ltd., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇ ("Aksys").
AGREEMENT
In consideration of the mutual covenants, promises, and conditions set forth
below, the parties, intending to be bound, agree as follows:
1) Supply Obligations. During the Term, (a) Peak shall manufacture the
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Products in accordance with the terms and conditions set forth in this
Agreement and the Specifications, and (b) Peak shall manufacture all of
Aksys's requirements for Products as provided in Section 5 (a) except
as provided below in Section 5(b).
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2) Design and Specifications.
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a) Specifications. The "Specifications" shall mean all of the
following: (i) the preliminary drawings and specifications for
the Products will be mutually agreed upon and controlled in
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the Peak Manufacturing and Quality System (PMQS), and all
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revisions thereof delivered in writing by Aksys to Peak and
accepted by Peak; (ii) manufacturing procedures and quality
plans for the specific assembly in accordance with Section
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2(c); and (iii) all prototypes made by Peak and approved by
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Aksys for production.
b) Design Changes. Peak and Aksys will mutually review and accept
changes in Specifications by releasing such changes in the
PMQS. Peak reserves the right to re-quote prices in the
event of Aksys changes to the Specifications.
c) Testing and Quality. Aksys and Peak will establish testing
procedures mutually agreed upon by Peak and Aksys. Peak will
evaluate and incorporate Aksys test procedures into its PMQS.
Aksys and Peak will agree on Non Recurring Engineering fees to
compensate appropriate activities. Peak agrees that Aksys's
representatives may have access to the area of Peak's facility
where Products are being manufactured or stored or where parts
and materials are being processed or stored at all times
during normal business hours for purposes of quality
inspection and verification of manufacturing procedures to
Specifications.
d) Quality Requirements.
i) Aksys shall maintain the "Design History File" and perform all
necessary "Design Verification and Validation."
ii) Aksys shall be responsible for identifying any components
requiring lot traceability. These requirements will be
released into the PMQS as a customer specification.
iii)Peak shall maintain an approved vendor list (AVL) which shall
serve as a record of acceptable suppliers. Any suppliers
selected, evaluated and approved by Aksys or their
representative shall be noted as a customer approved supplier
on the AVL. All suppliers selected by Peak shall be either
approved or certified according to the PMQS.
iv) Peak will perform process validation where results cannot be
verified by subsequent inspection or test. Any additional
validation will be specified by Aksys. Aksys will provide
specifications for and will obtain any necessary regulatory
approvals of printed materials, including labels manuals,
artwork and copy.
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v) Aksys will investigate and handle complaints from end-users.
Peak shall cooperate with Aksys's investigations, including
providing manufacturing-related records as they relate to the
investigation. Aksys will reimburse Peak for all reasonable
costs and expenses in cooperation of such investigation.
vi) Aksys is responsible for conducting product recalls. Peak
shall cooperate with Aksys recall investigations, including
providing manufacturing-related records as they relate to the
recall. Peak and Aksys shall cooperate in jointly assessing
the root cause of a product recall. Both parties will mutually
agree as to the assessment of responsibility. Should Aksys be
determined solely responsible for the recall, Aksys will
reimburse Peak for all reasonable costs and expenses in
cooperation of such recall. Should Peak be determined solely
responsible, Aksys will not reimburse Peak for expenses
incurred in providing replacement components. Aksys will bear
the cost of all field service related activities.
vii)Aksys is responsible for all installation and start up
activities of the Product.
3) Tools and Fixtures. Aksys shall be responsible for purchasing all
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tooling and fixtures that are required for production of the Products
(including any tooling and fixtures required due to a change to the
Specifications) and which Peak does not own as of the Effective Date.
All such tooling and fixtures shall be held by Peak in trust for
Aksys's exclusive use in accordance with manufacturing and testing
procedures established for Aksys's products only. Such tooling and
fixtures shall be owned by Aksys and identified to Peak's lenders,
creditors, shareholders and other third parties as Aksys assets
consigned to Peak. Except for normal production maintenance, which will
be the responsibility of Peak, Aksys shall be exclusively responsible
for the costs to repair or replace such tooling and fixtures. Peak and
Aksys shall cooperate to obtain the best available pricing for all such
tooling and fixtures. Peak agrees to execute and deliver to Aksys upon
request a form UCC-1 or such other documents as Aksys reasonably may
request to protect its interest in such assets.
4) Forecasts.
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a) Generally. Aksys agrees to provide Peak a six (6) month
rolling forecast of Aksys's reasonably anticipated cumulative
quantity of the Product for such six-month period. Aksys
agrees to update the forecast monthly and provide it to Peak
each month. Peak is authorized to purchase materials for the
first thirteen weeks of the forecast (the "Rolling 13 Week
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Firm Forecast") after the product has officially been launched
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into the marketplace. Pre-launch purchasing quantities will be
provided by Aksys.
b) Long Lead Time Items. Peak may request from Aksys written
authorization to purchase certain long lead time items for
Peak inventory, safety-stock and manufacturing requirements
("Special Inventory"). Upon termination or cancellation of
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this Agreement, Aksys shall purchase from Peak, at Peak's
actual cost, any unused Special Inventory not to exceed the
amount that has been specifically agreed to in writing by
Aksys.
C) Deposit. Aksys agrees to provide a one-time cash deposit in an
amount equal to Peak's cost for the materials required to
produce the number of Product units specified in the initial
Rolling 13 Week Firm Forecast. Such deposit shall be applied
as a credit against each subsequent invoice. No deposit shall
be required for any order other than the initial deposit
described herein.
5) Orders and Fulfillment.
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a) Purchase Order. Aksys shall issue written purchase order
releases (PO releases) for its Product requirements. Peak
shall accept and fulfill all such PO releases to the extent
that the Product quantity ordered by Aksys for delivery in
any one week period does not exceed the delivery forecast
for such week in the Rolling 13 Week Firm Forecast provided
by Aksys at least [thirteen (13) weeks] prior to
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such week; provided, however, that Peak shall make all
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reasonable efforts and afford first priority to production
for Aksys to accept and fulfill PO releases that exceed such
forecasts. Aksys shall provide a required delivery date for
each PO release based on a thirty (30) day lead time or as
otherwise mutually agreed between Aksys and Peak.
b) Exclusivity; Inability to Supply. During the Term and for so
long as Peak continues to timely supply Aksys' requirements
for the Products, Aksys shall not have the Products made by
any third party; provided, however, that nothing in this
Agreement shall be deemed to preclude Aksys from
manufacturing the Products itself. Peak shall provide
immediate written notice to Aksys if Peak reasonably
anticipates that it may be unable to meet Aksys'
requirements specified in the then-current Rolling 13 Week
Firm Forecast (or thereafter), and in such event Aksys shall
be entitled to have Products made by other third parties,
and may thereafter allocate, in Aksys's sole discretion, its
Product requirements among Peak and such third parties.
Exclusivity is predicated upon Peak's maintenance of ISO
9002 certification and FDA registration during the term of
the agreement. Loss of either of these certifications will
result in forfeiture of exclusivity until certification is
reestablished.
c) Order Cancellation. Aksys may cancel any PO release or any
Rolling 13 Week Firm Forecast, provided that in such event,
Aksys shall pay Peak for Products and any inventory affected
by the cancellation as follows, not to exceed to purchase
price for such order: (i) 100% of Peak's price to Aksys for
all finished Products in Peak's possession, (ii) 110 % of
the cost of all inventory in Peak's possession procured for
Aksys confirmed purchase orders and not returnable to the
vendor or usable for other customers, whether in raw form or
work in process, (iii) 100% of the cost of inventory on
order and not cancelable, (iv) any vendor cancellation
charges incurred with respect to inventory accepted for
cancellation or return by the vendor, and (v) actual costs
to Peak of labor incurred by Peak related to work in process
for Aksys' s canceled PO releases. Upon such payment all
such inventory and work in progress shall become the sole
property of Aksys.
d) Order Changes. Peak will make commercially reasonable efforts
to accommodate changes to Aksys confirmed purchase orders.
Peak will move out purchase order dates to accommodate
changes, but in no event will the move out exceed thirty (30)
days. Purchase orders moved out greater than 30 days may be
invoiced at full value upon completion.
e) Part Change Orders. Aksys agrees to purchase from Peak, at
Peak's actual cost, any inventory purchased by Peak in
reliance on Aksys's Rolling 13 Week Firm Forecast, which
inventory is rendered obsolete due to a change to the
Specifications. Peak shall, however, first use reasonable
efforts to return any such inventory, and Aksys agrees to pay
for the restocking charges and shipping if applicable.
6) Packaging, Shipping and Delivery. Peak shall ship the Products in
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accordance with packaging and shipping instructions provided by Aksys.
Unless otherwise specified in writing in a particular PO release, all
Product deliveries shall be shipped F.O.B. factory to the destination
specified by Aksys for delivery, and Peak shall insure such shipments
against any loss or damage to the goods caused during shipment.
7) Payment.
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a) Invoice. Peak will invoice at the time of shipment of
Products. Payment is due at Peak on or within twenty (20)
calendar days from the date that such invoice is received by
Aksys.
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b) Pricing. Peak's invoices shall reflect charges for the
Products as specified in Exhibit B. Such charges are exclusive
of taxes, shipping and insurance. Charges for taxes, shipping
and insurance (to the extent applicable) shall be separately
stated on Peak's invoice.
c) Cost Reductions. Peak agrees to seek ways to reduce the cost
of manufacturing Products by obtaining alternate sources of
materials, and improved assembly or test methods. Peak shall
notify Aksys in writing not less than thirty (30) days prior
to starting any such cost reduction efforts or
implementation of any such cost reduction methods. Upon
implementation of such methods, Peak may include in its
invoices thereafter (for so long as such cost reduction
method remains in effect) a line item representing one-half
(1/2)of the reduction in actual costs that would,
immediately prior to implementation of such cost reduction
methods, have been charged to Aksys for the Products
delivered under such invoice in accord with Section 7(b).
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Cost reductions initiated directly by Aksys, such as product
re-engineering of materials, components or subsystems;
refinement of manufacturing processes or procedures;
identification of new vendors, volume related price
improvements or changes in the pricing or availability of
third party materials and services will accrue 100% to
Aksys. Aksys and Peak will mutually agree to ownership of
cost reduction activities prior to efforts expended in
pursuit of such reductions. Such reductions will be
reflected as a line item on Peak invoices immediately
following implementation.
8) Limited Product Warranties.
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a) Basic Warranty. Peak warrants that the Products are and shall
be free from defects in workmanship which exist or develop for
a period of [90 days] from the date of installation or 6
months from date of shipment thereof to Aksys or Aksys's
designated distributor, whichever occurs first, provided that
such defect developed under normal and proper use within the
operating parameter described in the Specifications.
b) Specification Warranty. Peak warrants that the Products are
manufactured to PMQS for a period of [90 days] from the date
of installation or 6 months from date of shipment thereof to
Aksys or Aksys's designated distributor, whichever occurs
first.
C) Limitation of Liability. Aksys's sole and exclusive remedy in
the event of a breach of the foregoing warranties shall be
repair or, at Peak's sole discretion, replacement, including
related shipping costs. Aksys will bear financial
responsibility for all field service related warranty
expenses.
9) Intellectual Property.
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a) As between Aksys and Peak, Aksys shall own all right, title
and interest in and to Products and the Know-How, Improvements
and Patents related thereto. No implied rights or licenses are
granted by this Agreement. Aksys shall have the right to
apply, in its own name and at its own expense, for patent,
copyright or other Intellectual Property rights in such
Know-How and Improvements and, if requested, Peak shall
cooperate with Aksys in any reasonable manner in obtaining
such protection. Peak agrees that all such Know-How and
Improvements shall be owned solely by Aksys, even though
developed as a result of this Agreement, and regardless of
whether conceived, created or developed by Aksys or Peak..
b) License. During the Term Aksys grants to Peak a non-exclusive,
royalty-free right and license under the Patents, Know-How and
Improvements to make the Products solely for delivery to Aksys
or Aksys's designee.
10) Confidentiality.
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a) General Obligation. All information provided by one party (the
"Disclosing Party") to the other party (the "Recipient")
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"shall be governed by this Section 10.
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b) Proprietary Information. As used in this Agreement, the term
"Proprietary Information" shall mean all trade secrets or
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confidential or proprietary information designated as such
in writing by the Disclosing Party, whether by letter or by
the use of an appropriate proprietary stamp or legend, prior
to or at the time any such trade secret or confidential or
proprietary information is disclosed by the Disclosing Party
to the Recipient. Notwithstanding the foregoing, information
which is orally or visually disclosed to the Recipient by
the Disclosing Party, or is disclosed in writing without an
appropriate letter, proprietary stamp or legend, shall
constitute Proprietary Information if the Disclosing Party,
within thirty (30) days after such disclosure, delivers to
the Recipient a written document or documents describing
such Proprietary Information and referencing the place and
date of such oral, visual or written disclosure and the
names of the employees or officers of the Recipient to whom
such disclosure was made.
c) Disclosure. The Recipient shall hold in confidence, and shall
not disclose to any person outside its organization, any
Proprietary Information for a period of five (5) years from
the Effective Date, regardless of the termination of the
Term of this Agreement. The Recipient shall use such
Proprietary Information only for the purpose of developing
the Product with the Disclosing Party or fulfilling its
future contractual requirements with the Disclosing Party
and shall not use or exploit such Proprietary Information
for any other purpose or for its own benefit or the benefit
of another without the prior written consent of the
Disclosing Party. The Recipient shall disclose Proprietary
Information received by it under this Agreement only to
persons within its organization who have a need to know such
Proprietary Information in the course of the performance of
their duties and who are bound to protect the
confidentiality of such Proprietary Information.
d) Limitation on Obligations. The obligations of the Recipient
specified in Section 10 above shall not apply, and the
Recipient shall have no further obligations, with respect to
any Proprietary Information to the extent that such
Proprietary Information: (i) is generally known to the
public at the time of disclosure or becomes generally known
through no wrongful act on the part of the Recipient; (ii)
is in the Recipient's possession at the time of disclosure
otherwise than as a result of Recipient's breach of any
legal obligation; (iii) becomes known to the Recipient
through disclosure by sources other than the Disclosing
Party having the legal right to disclose such Proprietary
Information; (iv) is independently developed by the
Recipient without reference to or reliance upon the
Proprietary Information; or (v) is required to be disclosed
by the Recipient to comply with applicable laws or
governmental regulations, provided that the Recipient
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provides prior written notice of such disclosure to the
Disclosing Party and takes reasonable and lawful actions to
avoid and/or minimize the extent of such disclosure.
e) Ownership of Proprietary Information. The Recipient agrees
that the Disclosing Party is and shall remain the exclusive
owner of Proprietary Information and all Intellectual
Property rights embodied therein.
f) Return of Documents. The Recipient shall, upon the request of
the Disclosing Party, return to the Disclosing Party all
drawings, documents and other tangible manifestations of
Proprietary Information received by the Recipient pursuant to
this Agreement (and all copies and reproductions thereof):
provided that the Recipient may keep one archival copy of the
same.
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g) During the period beginning on the date hereof and ending on
the later of two (2) years from such date or one (1) year
after the termination of business relations between Peak and
Aksys, Peak covenants and agrees that it shall not actively
solicit any employee to leave the employment of Aksys.
11) Indemnification.
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a) Aksys Indemnification of Peak. Aksys shall indemnify, defend
and hold harmless Peak from and against any Losses arising
out of or relating to a claim brought by a third party
against Peak only to the extent that such claim and
corresponding Losses are based upon allegations that (i)
there exists a defect in the design of any Products by Aksys
(including a defect in any materials provided to Peak by a
third party with respect to which materials Aksys's
Specifications required to be purchased from such third
party), (ii) would constitute a breach of the terms of this
Agreement by Aksys, or (iii) the manufacture, sale or use of
any Product, in accordance with the Specifications and
operating instructions provided by Aksys, infringes a
patent, copyright, trade secret or other proprietary right
of a third party.
b) Indemnification Procedure. A party claiming indemnification
under this Section 11 (an "Indemnified Party") shall provide
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prompt written notice to the other party (the "Indemnifying
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Party") of any and all notices, claims, demands, pleadings,
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and other facts or circumstances that may, in the
Indemnified Party's reasonable judgment, be likely to result
in a claim for indemnification. The Indemnified Party's
failure to provide such prompt written notice shall reduce
the indemnification obligation of the Indemnifying Party to
the extent that such failure resulted in demonstrable
prejudice to the Indemnifying Party. The Indemnified Party
shall promptly tender defense of any litigation or other
formal dispute to the Indemnifying Party, and the
Indemnifying Party shall select counsel of its choice,
reasonably acceptable to the Indemnified Party for such
litigation or dispute. The Indemnified Party shall cooperate
completely with the Indemnifying Party, including without
limitation providing timely responses to all discovery
requests and providing expert and factual witnesses as
necessary or desirable. The Indemnifying Party shall have
the sole authority to negotiate and settle such claims to
the extent of the applicable indemnification obligation.
c) Insurance. Each party shall maintain general liability
insurance in an amount not less than [$5,000,000] per claim.
Any amounts paid under such insurance policies by the either
party's insurer shall reduce the indemnification obligation of
the Indemnified Party with respect to a particular claim.
12) Disclaimer of Liability. Neither party shall be liable to the other
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party or to any third parties for any consequential, incidental or
punitive damages, including, but not limited to, damage to property,
for loss of use, loss of time, or loss of profits or income.
13) Limitation of Liabili1y. Peak's liability for any breach of warranty
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under Section 8 or for any manufacturing defect and Aksys sole remedy
shall be limited to repair or at Peak's discretion replacement of
Products. For any other claim hereunder, Peak's liability shall be
limited to the proceeds from of any applicable insurance carried by
Peak pursuant to Section 11c.
14) Spare Parts. During the Term, and for a period five (5) years
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thereafter, Peak shall provide Aksys with all spare parts which form
part of the Products. In the event that the production of any spare
part is to be discontinued prior to the end of such five (5) year
period, Peak shall notify Aksys at least one hundred and twenty (120)
days before completion of the production of such part and Aksys may
order, and Peak shall deliver, such quantity as Aksys shall request.
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15) Integration. This Agreement constitutes the complete and exclusive
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statement of the terms of the agreement between Peak and Aksys and
supersedes all prior and contemporaneous agreements and undertakings of
Peak and Aksys with respect to the subject matter hereof..
16) Term and Termination.
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a) Initial Term and Renewal Term. Unless sooner terminated in
accordance with Section 16(b) or 16(c): (i) the initial term
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of this Agreement shall be two (2) years; and (ii) after such
initial term, the term of this Agreement shall automatically
renew for successive one year periods unless either party
provides written notice to the other party of non-renewal not
less than ninety (90) days prior to the end of the
then-current renewal term (such initial term and renewal terms
collectively referred to herein as the "Term").
b) Termination For Convenience. After the first anniversary date
of this Agreement, either Peak or Aksys may terminate the Term
of this Agreement by giving the other party not less than one
hundred and eighty (180) days written notice prior to the
effective date of such termination.
c) Termination For Cause. The Term of this Agreement shall
terminate: (i) automatically, if one of the parties fails to
perform any material obligations hereunder, and such material
obligations remain uncured sixty (60) days following the date
that the other party delivers to the defaulting party written
notice describing such performance failures; (unless breach is
for non payment for Product in which case the cure is 10 days
plus interest at 18%, annualized) or(ii) immediately upon
notice by either party if the other party shall file for
liquidation, bankruptcy, reorganization, compulsory
composition, dissolution, or if the other party has entered
into liquidation, bankruptcy, reorganization, compulsory
composition or dissolution, or if the other party is generally
not paying its debts as they become due (unless such debts are
the subject of a bona fide dispute).
d) Effect of Termination/Survival. Upon expiration or termination
of the Term of this Agreement, the following provisions only
shall survive such termination or expiration.
e) Transition. Upon expiration or termination of the Term of this
Agreement, and for a period of six (6) months thereafter, Peak
shall provide reasonable cooperation and assistance (including
without limitation knowledge transfer, materials sourcing,
transfer of unused materials and unfinished inventory, and
removal and shipping of Aksys-owned tooling and fixtures) to
transition production of the Products to a third party
designated by Aksys. Peak may invoice Aksys for actual charges
incurred by Peak in such rendering such transition services,
including Consulting Service fees billed on an hourly basis at
Peak's standard rates.
17) Required Approvals. Each party shall obtain all domestic and foreign
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governmental licenses, permits and approvals required for such party's
performance under this Agreement. Without limiting the generality of
the foregoing: (i) Aksys shall be responsible for complying with all
applicable foreign and U.S. federal, state and local laws, rules,
regulations and orders and for obtaining all applicable U.S. FDA and
other governmental agency product and design approvals and applicable
foreign agency approval for sale of the Product; and (ii) Peak shall be
responsible complying with all U.S. FDA and applicable state and local
laws, rules, regulations and orders applicable to the manufacturing
processes and procedures.
18) Compliance with Laws. Each party shall comply with all domestic and
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foreign laws, rules, regulations and orders applicable to such party's
performance under this Agreement.
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19) Assignment and Delegation. This Agreement cannot be assigned nor is the
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performance of the duties delegable by either party without the written
consent of the other party which shall not be unreasonably withheld;
provided, however, that this Agreement may be assigned by either party
to a purchaser of substantially all of such party's assets relating to
the Products, or to a successor in interest by merger or corporate
reorganization.
20) Governing Law. This Contract Manufacturing Agreement shall be construed
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to be between merchants and shall be governed by the laws of the State
of Colorado.
21) Relationship of Parties. The relationship of Aksys and Peak is that of
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buyer and seller/manufacturer, respectively, of goods. Nothing in this
Agreement is intended to, or shall be deemed to, constitute a
partnership, joint venture, agency, or a transfer of any intellectual
property of either party, and neither party hereto shall be authorized
to act in the name of the other or enter into any contract or other
agreement which binds the other.
22) Enforceability. If any of the provisions of this Agreement, or portions
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thereof, are found to be invalid by any court of competent jurisdiction
the remainder of this Agreement shall nevertheless remain in full force
and effect.
23) Force Majeure. Neither Aksys nor Peak shall be liable for any failure
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to perform obligations under this Agreement if prevented so by a cause
beyond their control and without the fault or negligence of the
defaulting party. Without limiting the generality of the foregoing,
such causes include acts of God, fires, floods, storms, epidemics,
earthquakes, riots, civil disobedience, wars or war operations, or
restraint of government.
24) Amendment. This Agreement may not be amended except in a written
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amendment signed by each of the parties. Additional or different terms
contained in purchase orders or order acknowledgments or similar forms
shall not be effective unless signed by both parties with reference to
this Agreement.
25) Dispute Resolution. Consent to Arbitration and Venue. Peak and Aksys
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agree that upon the written demand of either party, whether made before
or after the institution of any legal proceedings, but prior to the
rendering of any judgment in that proceeding, all disputes, claims, and
controversies between them (but excluding disputes, claims and
controversies in which a third party is a necessary party), arising
from this Agreement, including without limitation contract disputes and
tort claims, shall be arbitrated in the Denver, Colorado metropolitan
area, pursuant to the Commercial Rules of the American Arbitration
Association by a panel of three arbitrators. All expenses of such
arbitration shall be borne equally by the parties. Any arbitration
decision shall be final and non-appealable unless the parties mutually
agree otherwise in writing before a final decision by the panel of
arbitrators. Any arbitration order or award may be enforceable in an
appropriate court as provided herein. Each party shall select one
arbitrator and those two arbitrators shall select the third arbitrator
to form the panel. Each party reserves the right, notwithstanding the
foregoing, to seek equitable relief in a court of competent
jurisdiction in any appropriate state or federal court. The prevailing
party in any arbitration or court proceeding is entitled to be
reimbursed for any and all reasonable attorney's fees, expert fees, and
costs of suit from the losing party.
26) Financial Disclosure: Peak agrees to provide Aksys with annual audited
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financial statements audited by a Certified Public Accounting Firm.
Unaudited financial statements will be provided on a quarterly basis
within 30 days of official quarter-end close.
27) Definitions. The following terms, when used herein with initial capital
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letters, shall have the respective meanings set forth in this Section
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25.
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a) "Aksys Customers" shall mean end users of the Products
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(including without limitation institutional purchasers that
use the Products for treatment of their patients) that
purchase the Products from Aksys or from an Aksys distributor.
b) "Disclosing Party" shall have the meaning stated in Section
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10.
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C) "Effective Date" shall have the meaning stated in the preamble
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of this Agreement.
d) "Improvements" shall mean all improvements to Aksys Patents or
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Know-How hereafter created or acquired during the term of this
Agreement by Peak or jointly by one or more employees of Aksys
and Peak, including without limitation advances, developments,
modifications, enhancements, variations, revisions,
adaptations, extensions or any element thereof, utilizing or
incorporating, or based on, the Know-How or Patents, whether
patentable or not.
e) "Intellectual Property" shall mean trade secrets, ideas,
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inventions, designs, developments, devices, methods or
processes (whether patented or patentable and whether or not
reduced to practice) and all patents and patent applications
related thereto; copyrightable works and mask works (whether
or not registered); trademarks, service marks and trade dress;
and all registrations and applications for registration
related thereto; and all other intellectual or industrial
property rights, to the extent in or related to the Products.
f) "Know-How" shall mean the know-how, technical information and
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confidential technical data, together with all trade secrets,
unpatented technical knowledge and inventions, confidential
manufacturing procedures and methods, that are related to the
Products.
g) "Losses" shall mean any and all damages, liabilities, costs
and expenses (including reasonable attorneys' fees and
expenses), and amounts paid in settlement.
h) "Patents" shall mean those patents and patent applications
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that are now or hereafter owned or acquired by Aksys and
relate to the Products.
i) "Products" shall mean the [kidney dialysis machine] described
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in detail in the Specifications.
j) "Proprietary Information" shall have the meaning stated in
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Section 10.
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k) "Recipient" shall have the meaning stated in Section 10.
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1) "Rolling 13 Week Firm Forecast" shall have the meaning stated
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in Section 4(a).
m) "Special Inventory" shall have the meaning stated in Section
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4(b).
n) "Peak Manufacturing and Quality System (PMQS)" shall have the
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meaning to include the following processes and procedures and
quality requirements.
(1) Manufacturing Procedures: Mutually agreed upon document with
procedures for manufacturing Product.
(2) Quality Plans: Mutually agreed upon document outlining
component quality plans and assembly quality plans for
Product.
(3) Document Change Request: Document approved by Peak and Aksys
for changes in Specifications.
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IN WITNESS WHEREOF, the parties hereto have executed this Contract Manufacturing
Agreement as of the Effective Date indicated above.
Peak Industries, Inc. Aksys, Ltd.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
Title: President & CEO Title: President & CEO
Date: 02/28/01 Date: 03/05/01
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Exhibit A
Preliminary Design and Specifications
Preliminary design specifications, ▇▇▇▇ of materials and drawings will be
provided by Aksys and incorporated hereto, when available. Some preliminary
design specifications have already been hand delivered to Peak, and will be
incorporated into this exhibit as well. Exhibit A will be updated on a regular
basis and / or as appropriate until final designs are stabilized and recognized
as being complete by both parties.
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