Exhibit 10.41
"Confidential Treatment Requested"
MANUFACTURING SUPPLY AGREEMENT
[*] = CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.
Exhibit 10.41
"Confidential Treatment Requested"
1. Manufacture, Delivery and Acceptance of Instrument Units............... 1
1.1 Manufacture of Instrument Units.................................. 1
1.2 Specifications, DMR and Changes.................................. 1
1.3 Forecast and Order Schedule...................................... 2
1.4 "*".............................................................. 3
1.5 Shipment and Risk of Loss........................................ 3
1.6 "*".............................................................. 3
1.7 Inspection and Acceptance........................................ 3
2. Continuing Obligations of SeaMED....................................... 4
2.1 Engineering Support.............................................. 4
2.2 Maintenance of Adequate Facilities and Manufacturing Practices... 5
2.3 No Subcontracting................................................ 5
2.4 Inventory and Insurance.......................................... 5
2.5 Aastrom's Equipment.............................................. 5
2.6 Financial Condition.............................................. 5
3. Manufacturing Process, Registration and Compliance..................... 6
3.1 Manufacturing Process............................................ 6
3.2 Registration and Compliance...................................... 6
4. Price and Payment Terms................................................ 6
4.1 Price............................................................ 6
4.2 Price Adjustments................................................ 6
4.3 Payment Terms.................................................... 7
5. Warranties............................................................. 7
5.1 Manufacturer's Warranty.......................................... 7
5.2 Limitation on Liability.......................................... 7
5.3 Aastrom's Warranty............................................... 8
5.4 Disclaimer of Warranties......................................... 8
6. Records; Inspection and FDA Reports.................................... 8
6.1 Records Inspection............................................... 8
6.2 FDA Inspection Reports........................................... 8
7. Indemnification........................................................ 9
7.1 By SeaMED........................................................ 9
7.2 By Aastrom....................................................... 9
7.3 Patent Infringement.............................................. 9
7.4 Control of Action................................................ 9
7.5 Insurance........................................................ 9
i
Exhibit 10.41
"Confidential Treatment Requested"
8. "*" ................................................................. 10
8.1 Continuing Prohibition.......................................... 10
8.2 "*"............................................................. 10
8.3 No Use of Aastrom's Proprietary Information..................... 10
9. Proprietary Information................................................ 10
9.1 Aastrom's Property; Use of Property by SeaMED................... 10
9.2 Inventions...................................................... 11
9.3 Nondisclosure................................................... 11
9.4 Confidentiality................................................. 11
10. Term................................................................... 11
11. Default and Termination............................................... 11
11.1 Breach......................................................... 11
11.2 Remedy......................................................... 12
11.3 Obligations Upon Termination................................... 12
12. Miscellaneous......................................................... 13
12.1 Independent Contractors........................................ 13
12.2 Causes Beyond Control.......................................... 13
12.3 Successors and Assigns......................................... 13
12.4 Applicable Law................................................. 13
12.5 Severability................................................... 13
12.6 Entire Agreement; Modification and Waiver...................... 13
12.7 Counterparts................................................... 13
12.8 Dispute Resolution............................................. 13
12.9 Notices........................................................ 14
EXHIBIT A General Description of the System and the Instrument
EXHIBIT B Specifications for the Instruments
EXHIBIT C Document Change Control Agreement
EXHIBIT D Pricing
ii
Exhibit 10.41
"Confidential Treatment Requested"
INDEX OF DEFINED TERMS
Section
-------
AAA........................................................................ 12.8
Agreement.................................................................. Intro
CPS......................................................... Recital A, Exhibit A
Development Agreement.................................................. Recital A
DMR........................................................................ 1.2(b)
FDA.................................................................. 2.1(d),.5.1
Firm Order Period............................................................. 1.3
Instrument............................................................. Recital A
SeaMED..................................................................... Intro
Specifications............................................................. 1.2(a)
System................................................................. Recital A
iii
Exhibit 10.41
"Confidential Treatment Requested"
MANUFACTURING SUPPLY AGREEMENT
This Manufacturing Supply Agreement (the "Agreement") is entered into as of
April 14, 1998, by and between Aastrom Biosciences, Inc., a Michigan corporation
("Aastrom"), and SeaMED Corporation, a Washington corporation ("SeaMED").
▇. ▇▇▇▇▇▇▇ and SeaMED previously entered into a Collaborative Product
Development Agreement dated May 10, 1994 (the "Development Agreement"), pursuant
to which SeaMED agreed to collaborate with Aastrom to complete the necessary
design work for, and produce pre production units of, an instrument or
instruments (the "Instrument") for a proprietary Aastrom Cell Production System
(CPS) which is used for cell growth (the "System"). Attached hereto as Exhibit
-------
A is a general description of the System, including the Instrument.
-
B. Pursuant to the terms of Section 6 of the Development Agreement, the
parties agreed to enter into a manufacturing agreement for SeaMED to manufacture
commercial units of the Instrument.
C. In accordance with Section 6 of the Development Agreement, the parties
are entering into this Agreement to set forth the terms and conditions pursuant
to which SeaMED will manufacture commercial units of the Instrument for Aastrom.
D. The terms and conditions of the Development Agreement shall remain in
effect until such time as Aastrom issues to SeaMED a purchase order for the
production version of the Instruments as set forth in the Specifications and
such order has been accepted by SeaMED, with such acceptance not being
unreasonably withheld.
AGREEMENT
NOW, THEREFORE, the parties hereby agree as follows:
1. Manufacture, Delivery and Acceptance of Instrument Units.
--------------------------------------------------------
1.1 Manufacture of Instrument Units. SeaMED shall manufacture and
-------------------------------
sell to Aastrom so many of the Instrument units as Aastrom may order, with each
Instrument unit being manufactured in accordance with (i) the then-current
specifications as set forth in this Agreement; (ii) then current applicable Good
Manufacturing Practices (as described in Title 21 of the U.S. Code of Federal
Regulations, Part 820); and (iii) any other applicable standards (UL, CSA, IEC
and TUV) for manufacturing of the Instrument. SeaMED shall maintain its
manufacturing facility, equipment and procedures so as to obtain and comply with
EN 46001 certification in accordance with the EC Medical Directives, and shall
apply the EC ▇▇▇▇ to Instrument units intended for the European market.
1.2 Specifications, DMR and Changes.
--------------------------------
(a) Specifications. SeaMED shall manufacture the Instruments in
--------------
accordance with the specifications attached hereto as
Exhibit B
---------
1
Exhibit 10.41
"Confidential Treatment Requested"
("Specifications") and no part of SeaMED's responsibility may be
subcontracted without the prior written consent of Aastrom.
(b) Establish DMR. SeaMED shall prepare a Device Master Record ("DMR")
-------------
covering the manufacture of the Instruments from the Specifications,
other requirements and technical information to be provided by
Aastrom, and manufacturing quality processes and procedures
established by SeaMED in accordance with SeaMED's Device Master
Record Procedure. "*"
(c) Specification and DMR Changes. Notwithstanding any provision of this
-----------------------------
Agreement to the contrary, SeaMED shall not have the right to change
the Specifications or DMR except as in accordance with the procedure
set forth in Exhibit C. If a Party desires a change to
Specifications or any part of the DMR, it shall submit a proposed
change in accordance with the procedure set forth in Exhibit C,
setting forth a detailed description and drawings thereof. The
Parties shall work in good faith as expeditiously as is reasonable
to reach a determination whether a change to Specifications will be
made and, if so, when such change will be implemented and the effect
that such change will have, if any, on quantities, quality criteria,
price and delivery dates.
1.3 Forecast and Order Schedule. Every month during the term of this
---------------------------
Agreement, Aastrom shall provide SeaMED with a rolling forecast of the
anticipated quantity of Instrument units Aastrom intends to purchase each month
from SeaMED for the following twelve-month period. The quantities given for the
first six months of each twelve-month rolling forecast shall be firm orders (the
"Firm Order Period") and Aastrom shall issue its purchase order therefor.
Quantities beyond the foregoing Firm Order Period are for planning purposes
only. SeaMED shall fulfill all orders submitted by Aastrom, and SeaMED shall
have no right to unreasonably limit the number Instruments being added to the
Firm Order Period by Aastrom. For example, the forecasted quantity of
Instrument units that Aastrom intends to purchase from SeaMED during the period
from January through December would contain a Firm Order Period that includes
the quantities to be delivered from January through June. In February of that
year, Aastrom would finalize the quantity of units to be delivered by SeaMED in
July which would become part of the Firm Order Period and SeaMED would have no
right to unreasonably limit the quantity of Instrument units being added to the
Firm Order Period for Delivery in July. Such update to the forecast will be
performed on a monthly basis. Further, SeaMED shall use its best reasonable
efforts to accommodate Aastrom requested changes to the forecasted volumes and
delivery dates during the Firm Order Period, with such requested changes to be
received from Aastrom in writing. In the event that SeaMED determines that
economies can be achieved by purchasing materials to meet Aastrom's forecasts
beyond those set forth in Aastrom's purchase order, SeaMED may purchase such
materials only upon the written approval of Aastrom. SeaMED shall have no
obligation to purchase materials without a purchase order from Aastrom except as
necessary to meet Aastrom's firm purchase orders or other written authorization
2
Exhibit 10.41
"Confidential Treatment Requested"
received from Aastrom to procure materials. Aastrom shall pay SeaMED for all
materials and direct costs expended by SeaMED to fill Aastrom's firm purchase
orders for Instruments in the event that they are not used to fulfill such
purchase orders or other written authorization to procure materials.
1.4 "*"
1.5 Shipment and Risk of Loss. SeaMED shall deliver the Instrument
-------------------------
units FOB SeaMED's manufacturing facility, for shipment to Aastrom's premises in
Ann Arbor, Michigan, or to such other address as specified by Aastrom. Title
and risk of loss shall pass to Aastrom upon SeaMED's delivery of the Instrument
units to a licensed carrier approved by Aastrom for shipment to Aastrom. At the
request of Aastrom, SeaMED shall obtain insurance, acceptable to Aastrom, for
each instrument shipment with the cost of such insurance to be paid by SeaMED
and invoiced to Aastrom.
1.6 "*"
1.7 Inspection and Acceptance. Promptly after Aastrom receives a
-------------------------
shipment of the Instruments "*", Aastrom, or its designee, shall inspect the
Instruments to verify that they have been manufactured in accordance with the
required Specifications. Delivery of each Instrument unit shall be deemed
accepted by Aastrom unless SeaMED is notified in writing of Aastrom's rejection
of such delivery within thirty (30) days after the delivery date of the
Instrument "*", due to a failure thereof to comply with the Specifications,
including the acceptance test criteria. In the event that SeaMED receives such
notice, SeaMED shall take all necessary actions to remedy and correct any non-
conforming Instrument units. "*" If an Instrument is found later to be non-
conforming to the required Specifications, the fact that Aastrom did not
discover the non-conformance earlier shall not impair Aastrom's warranty rights
under Section 5.1 below.
2. Continuing Obligations of SeaMED.
--------------------------------
2.1 Engineering Support. During the term of this Agreement, SeaMED
--------------------
shall collaborate with Aastrom and any other design contractors designated by
Aastrom with regard to engineering support necessary to support the manufacture
of the Instruments. Without limiting the foregoing, SeaMED shall:
(a) Assist Aastrom with respect to planning for any manufacturing
issues that arise in connection with Instrument, including issues relating to
manufacturing process development and validation, component sourcing, and
maintenance of DMR documentation requirements;
(b) Assist Aastrom to establish a reliability goal for the
Instrument, calculate the reliability of the Instrument units at certain
established review points during the design and development of the Instrument,
and perform demonstration tests on pilot production units produced by SeaMED;
3
Exhibit 10.41
"Confidential Treatment Requested"
(c) Maintain working drawings for manufacturing and testing the
Instrument units, including without limitation, (i) specifications for component
parts to be acquired from specified vendors, (ii) drawings and specifications
for component parts, (iii) test and acceptance procedures and criteria, (iv)
subassembly specifications, drawings and requirements, (v) costed ▇▇▇▇ of
materials, and (vi) revised Specifications, including product specific
manufacturing procedures, DMR, routing and processes which revised
Specifications shall be subject to the prior written approval of Aastrom in
accordance with Exhibit C;
(d) To the extent required for submittal to the U.S. Food and Drug
Administration ("FDA") (or comparable foreign agencies) for Aastrom's IDE and/or
PMA (or comparable foreign approvals), prepare a detailed description of
SeaMED's manufacturing methods, processes, procedures and facility applicable to
Aastrom's Instrument; and
(e) Collaborate with Aastrom on any engineering projects that Aastrom
may request. Aastrom shall deliver to SeaMED a written request for such
engineering work and SeaMED shall deliver to Aastrom a proposal which, if
acceptable to Aastrom, will be authorized by Aastrom prior to the initiation of
work by SeaMED. "*"
2.2 Maintenance of Adequate Facilities and Manufacturing Practices
--------------------------------------------------------------
SeaMED shall assemble all of the Instrument units in an environment where
current good manufacturing practices are followed. Inasmuch as SeaMED's U.S.,
European Economic Community and other foreign body facility registration and
inspection records are extremely important to Aastrom's ability to obtain prompt
regulatory approval for Aastrom's System, SeaMED hereby agrees to use its best
efforts to maintain in good standing all appropriate regulatory facility
registrations and inspection records stated in Section 3.2 and Section 6.
2.3 No Subcontracting. No part of SeaMED's obligations under this
-----------------
Agreement shall be subcontracted by SeaMED without the prior written approval of
Aastrom.
2.4 Inventory and Insurance. All inventory of components and
-----------------------
materials purchased by SeaMED to make Instrument units shall be owned by SeaMED
and shall be insured against risk of loss by SeaMED. Any components and
materials purchased by Aastrom and delivered to SeaMED for SeaMED to use to make
Instrument units shall be covered by SeaMED's insurance policy for risk of loss
while said items remain in SeaMED's facility, with Aastrom being the loss payee
therefor.
2.5 Aastrom's Equipment SeaMED shall install, maintain and account
-------------------
for all tools, fixtures, molds, dies or other equipment provided or paid for by
Aastrom for manufacture of the Instrument at SeaMED's facility and at any of
SeaMED's permitted subcontractor facilities. SeaMED hereby acknowledges that
Aastrom's equipment is the sole and exclusive property of Aastrom and shall
identify and tag such items as Aastrom's equipment. SeaMED shall ensure that
such tags are properly placed and maintained on all of Aastrom's equipment and
hereby covenants that, during the term of this Agreement:
4
Exhibit 10.41
"Confidential Treatment Requested"
(i) SeaMED, and any permitted subcontractor of SeaMED using Aastrom's
equipment, shall utilize Aastrom's equipment solely for
manufacturing Aastrom's requirements of the Instrument as
provided hereunder,
(ii) SeaMED shall not encumber any of Aastrom's equipment, nor shall
SeaMED permit Aastrom's equipment to become encumbered as a
result of any act or omission of SeaMED or a subcontractor of
SeaMED.
Within twenty (20) business days following termination or expiration
of this Agreement and at Aastrom's request, SeaMED agrees to properly pack and
return to Aastrom or it designee, or cause to be properly packed and returned to
Aastrom or its designee, F.O.B., point of shipment, all of Aastrom's equipment,
the same to be shipped to such facility as Aastrom directs at Aastrom's expense.
2.6 Financial Condition. Each party shall give written notification
-------------------
to the other party of any material adverse financial condition affecting the
party, including without limitation: (i) the filing of a significant lawsuit
against the party, (ii) the lack of cash funds available to pay all obligations
of the party as they become due, (iii) the lack of resources available to enable
the party to fully and promptly perform its obligations under this Agreement on
schedule, or (iv) any other condition which may jeopardize or impair the full
and prompt performance by the party of its obligations under this Agreement.
Said notification shall be given within five (5) days after the occurrence or
realization of said adverse condition.
3. Manufacturing Process, Registration and Compliance.
--------------------------------------------------
3.1 Manufacturing Process. SeaMED shall furnish to Aastrom copies of
----------------------
the documentation which fully describes in detail the manufacturing and testing
processes, methods and techniques used to manufacture and test the Instrument,
including without limitation, all necessary Instrument information,
documentation, drawings, equipment lists, material lists, traceable recordings,
tooling, suppliers, Specifications and description of manufacturing methods,
facilities and processes (including DMR) required by U.S. or foreign regulatory
agencies, to enable the continued manufacture of the Instrument. SeaMED shall
provide copies of such information in printed and/or electronic form as Aastrom
may request and at Aastrom's reasonable expense. As changes or improvements are
contemplated in said manufacturing, the documentation describing the changes and
improvements will be furnished to Aastrom for approval prior to implementation.
SeaMED acknowledges that the System is a PMA device and that changes to the
manufacturing and testing process will likely require submission to FDA and FDA
approval prior to implementation. SeaMED acknowledges that similar regulatory
review and approval will be required for non-U.S. sale of Instruments. "*"
3.2 Registration and Compliance. SeaMED hereby represents to Aastrom
---------------------------
that it is registered with the FDA as a contract medical device manufacturer in
accordance with the Federal Food, Drug and Cosmetic Act 21 CFR Part 807, as
amended. SeaMED also hereby represents that it has achieved EN46001
certification by TUV as notified body and that during
5
Exhibit 10.41
"Confidential Treatment Requested"
the term of this Agreement, shall maintain and document a quality system as may
be required as a condition of maintaining such registration and certification.
4. Price and Payment Terms.
-----------------------
4.1 Price. Subject to Section 4.2, Aastrom shall compensate SeaMED
-----
for SeaMED's manufacture and supply of Instrument units as further described on
Exhibit D attached hereto. The prices set forth on Exhibit D shall include all
--------- ---------
packaging, packing and taxes, except sales taxes imposed upon the sale or
transfer of the Instrument. The cost of freight and insurance incurred by SeaMED
on Aastrom's account, if any, shall be invoiced to Aastrom. Aastrom shall have
no liability for such taxes if it has complied with resale tax certificate
requirements. Furthermore, if Aastrom is liable to pay these taxes, they shall
be specifically listed on SeaMED's invoice.
4.2 Price Adjustments. "*", either SeaMED or Aastrom may request a
-----------------
change in the purchase price based upon the pricing formula set forth in Exhibit
-------
D, to accommodate increased or decreased costs of manufacture, or an increase or
-
decrease in the number of Instrument units ordered by Aastrom. Such request and
change shall be based upon demonstrated increased or decreased costs of
components or labor for the units manufactured and to be manufactured or
increase or decrease in volume of units ordered by Aastrom. If any costs of
components or labor decrease during the term of this Agreement, or if the number
of units manufactured is materially greater than the estimated number used for
establishing the previous price, then SeaMED shall reduce the purchase price to
reflect such changes. Similarly, if the costs of components or labor increase,
or the number of units manufactured is materially less than the estimated number
used for establishing the previous price, then SeaMED and Aastrom shall increase
the price to reflect such changes. "*"
4.3 Payment Terms. Aastrom shall pay SeaMED the invoiced price in
-------------
U.S. dollars for each shipment of Instrument units accepted by Aastrom within
thirty (30) days after the later of (i) the date the invoice for such shipment
is received by Aastrom, or (ii) the date the shipment of Instruments is
delivered by SeaMED to Aastrom or Aastrom's designee. Unless otherwise
specified or required by law, all prices will be quoted and billed exclusive of
federal, state, or local excise, sales, or other similar taxes. Although the
parties do not expect any such taxes, if any such taxes are payable, they will
appear as an additional item on the invoices.
5. Warranties.
----------
5.1 Manufacturer's Warranty. "*" During the Warranty Period, SeaMED
-----------------------
warrants that each Instrument unit (i) shall be manufactured in full compliance
with the Specifications, (ii) shall be free from defects in material and
workmanship, and (iii) shall be free from defects in design as to those specific
elements for which SeaMED was primarily responsible for the design, as specified
in the Project Plan, as amended, as such term is defined in the Development
Agreement. As to the elements of the Instrument for which SeaMED was not
primarily responsible for the design, SeaMED makes no warranty as to design.
SeaMED further warrants that the manufacture, assembly and delivery of the
Instrument hereunder shall be in compliance with (a) all applicable federal,
state and local laws, rules, regulations and executive
6
Exhibit 10.41
"Confidential Treatment Requested"
orders, including without limitation, all of the employee compensation, health
and safety and environmental laws applicable to SeaMED's facility, and all U.S.
customs laws and regulations, and applicable regulations of the FDA and the
European Community and Japanese equivalent of the FDA; and (b) performed in a
professional, workmanlike manner in accordance with prevailing industry
standards. SeaMED understands that Aastrom may sell the Instrument to hospital
customers or other users. SeaMED agrees that the foregoing warranties are for
the benefit of Aastrom and any ultimate end-user of the Instrument.
5.2 Limitation on Liability. "*"
-----------------------
5.3 Aastrom's Warranty. Aastrom warrants that all elements of the
------------------
Instrument units for which SeaMED was not primarily responsible for the design
shall be free from defects in design.
5.4 Disclaimer of Warranties. EXCEPT FOR THE WARRANTIES SET FORTH IN
------------------------
THIS SECTION, THE PARTIES DISCLAIM ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR ANY IMPLIED WARRANTY OF
FITNESS FOR A PARTICULAR PURPOSE.
6. Records; Inspection and FDA Reports.
-----------------------------------
6.1 Records Inspection. SeaMED shall keep full and complete records
------------------
with respect to its manufacture of the Instrument, including a Device History
Record which will document that each Instrument has been manufactured in
accordance with the DMR and Specifications, and all records of costs and
purchase price adjustments. All such manufacturing records shall be owned by
Aastrom. At Aastrom's request, SeaMED shall allow Aastrom or its designee to
inspect and audit such records. Additionally, at Aastrom's request, SeaMED
shall allow Aastrom to inspect the facility where the Instrument units are
manufactured, and to inspect any work in progress on the Instruments, for
quality control purposes. Further, at Aastrom's request, SeaMED shall make
available to Aastrom or its designee all information as Aastrom may reasonably
request relating to the purchase of components and to the manufacture, assembly
and shipment of the Instrument, and to the performance by SeaMED of its
obligations hereunder.
6.2 FDA Inspection Reports SeaMED shall provide Aastrom with
----------------------
copies of any FDA Form 483 observations, follow-up warning letters and/or close-
out reports for those portions of FDA CGMP / QSR compliance inspection reports
relating specifically to the Instrument or the System's regulatory submission
for any facility where the Instrument is manufactured and will work closely with
Aastrom when responding to Form 483 observations that impact the Instrument or
System. "*" SeaMED shall immediately report to Aastrom in writing any adverse
events, circumstances, or potential problems relating to SeaMED's registrations
and inspections that could adversely effect the Instrument or the System
approval. SeaMED shall furnish to Aastrom a copy of the facility registrations
and inspection reports specifically related to the System applicable as of the
date of this Agreement and throughout the term of this Agreement. SeaMED shall
allow Aastrom and its agent to review and inspect SeaMED's facilities, and
regulatory compliance files, and correspondence to and from the FDA
7
Exhibit 10.41
"Confidential Treatment Requested"
regarding inspections, registrations, and audits that pertain directly to the
Instruments or any regulatory submission with regard to the System.
7. Indemnification.
---------------
7.1 By SeaMED. SeaMED shall indemnify, defend and hold harmless
---------
Aastrom and its officers, directors, employees and agents for any loss, claim,
cost or damage arising out of any claim or action for bodily injury based on the
use of any Instrument unit to the extent that such loss, claim, cost or damage
results, directly or indirectly, (i) from a breach by SeaMED of its warranties
as set forth in this Agreement, or (ii) from any negligent, willful or
intentional acts by SeaMED.
7.2 By Aastrom. Aastrom shall indemnify, defend and hold harmless
----------
SeaMED and its officers, directors, employees and agents for any loss, claim,
cost or damage arising out of any claim or action for bodily injury based on the
use of any Instrument unit to the extent such loss, claim, cost or damage does
not result from SeaMED's acts described in Section 7.1 above, but rather
results, directly or indirectly, (i) from the negligent, willful or intentional
acts of Aastrom or its agents (other than SeaMED), (ii) from a breach by Aastrom
of its warranties with respect to the Instrument unit, or (iii) from any product
liability claim related to, or arising out of, the Instrument units, other than
those claims described in Section 7.1 above.
7.3 Patent Infringement. Aastrom shall indemnify and hold SeaMED
-------------------
harmless from any loss, damage, or cost (including reasonable attorneys' fees
and expenses) arising from any claim that the Instrument or its operation
infringes a United States patent, trademark, copyright, or other proprietary
right, including trade secrets. SeaMED shall indemnify and hold Aastrom
harmless from any loss, damage, or cost (including reasonable attorneys' fees
and expenses) arising from any claim that SeaMED's manufacturing processes or
methods infringes a United States patent or other proprietary right, including
trade secrets.
7.4 Control of Action. "*"
-----------------
7.5 Insurance. SeaMED agrees to provide and maintain, at its sole
---------
expense, comprehensive general liability insurance, including product liability
insurance, covering worldwide sales of, and bodily injury and property damage
claims of third parties for accidents or injuries arising out of the use of, the
Instrument units manufactured by SeaMED. Said insurance shall have a combined
single limit of $5 million per occurrence, as a total limit of liability for any
one occurrence with respect to bodily injury and property damage, with a
deductible of no higher than $25,000, and with no aggregate annual limit.
Within ten (10) days after the Effective Date, SeaMED will furnish to Aastrom
certificates of insurance evidencing that such insurance is in effect. "*"
8. "*".
---
8.1 Continuing Prohibition. At all times both during and after the
----------------------
term of this Agreement, SeaMED shall not make or sell, or enable others to make
or sell, the Instrument, excepting only for making and selling the Instrument
for Aastrom. Similarly, at all times
8
Exhibit 10.41
"Confidential Treatment Requested"
SeaMED shall not use, or enable others to use, any of Aastrom's proprietary
information as further described in Section 9 below.
8.2 "*"
8.3 No Use of Aastrom's Proprietary Information. "*", SeaMED shall
-------------------------------------------
not thereafter render any services or make or sell any product for any other
party which services or products use or arise out of technology developed or
owned by Aastrom or developed by SeaMED on behalf of Aastrom. Such methods or
systems shall include, without limitation, those presently in the course of
development by Aastrom and those which shall be developed by SeaMED and/or
Aastrom and/or the other design contractors in furtherance of this Agreement.
SeaMED acknowledges and agrees that Aastrom has a legitimate business purpose in
precluding SeaMED from divulging or otherwise using any and all information
derived by SeaMED in the course of performing this Agreement, and that Aastrom
intends to use the Instrument and related methods and systems for its own
business purpose and competitive advantage in the marketplace.
9. Proprietary Information.
-----------------------
9.1 Aastrom's Property; Use of Property by SeaMED. SeaMED recognizes
---------------------------------------------
the proprietary interest of Aastrom in the techniques, designs, specifications,
drawings and other technical data now existing or developed during the term of
this Agreement relating to the System. SeaMED acknowledges and agrees that such
techniques, designs, specifications, drawings and technical data relating to the
System, whether developed by SeaMED alone, in conjunction with others, or
otherwise, shall be and is the property of Aastrom. SeaMED shall cooperate
fully in communicating to Aastrom or its agents the property described above.
SeaMED hereby waives any and all right, title and interest in and to such
proprietary information. SeaMED shall have the right to use any technology,
information, samples, documents and other proprietary information of Aastrom
provided in connection with the manufacturing activities described herein solely
and exclusively for the purpose of manufacturing the Instrument for Aastrom and
for no other purpose.
9.2 Inventions. As to any improvement to the Instrument, any
----------
component thereof or any disposable used in connection therewith, which is made
by SeaMED's employees or agents in the course of SeaMED's work for Aastrom, or
as a result thereof, which improvement constitutes a patentable invention,
SeaMED hereby agrees to promptly disclose the same to Aastrom, and SeaMED hereby
agrees to assign to Aastrom, and SeaMED hereby agrees to cause the
inventor/employee to assign to Aastrom, all ownership rights in the invention;
and SeaMED shall cause said inventor/employee to sign appropriate patent
applications prepared at the expense of Aastrom.
9.3 Nondisclosure. SeaMED acknowledges and agrees that Aastrom is
-------------
entitled to prevent Aastrom's competitors from obtaining and utilizing Aastrom's
trade secrets. SeaMED agrees during the term hereof and thereafter to hold
Aastrom's trade secrets and other confidential or proprietary information in
strictest confidence and not to use them for purposes other than performance
hereunder, and not to disclose them or allow them to be disclosed, directly or
indirectly, to any other person or entity, other than to persons engaged by
SeaMED for
9
Exhibit 10.41
"Confidential Treatment Requested"
the purpose of performance hereunder, without Aastrom's prior written consent.
SeaMED acknowledges the confidential nature of its relationship with Aastrom and
of any information relating to the Instrument, Aastrom, or its distributors,
agents, clients or customers which SeaMED may obtain during the term hereof.
SeaMED also agrees to place any persons to whom said information is disclosed
for purposes of performance hereunder under a legal obligation to treat such
information as strictly confidential.
9.4 Confidentiality. The provisions and arrangements made under
---------------
this Agreement are confidential between parties. Each party shall protect
confidential information in the same manner it protects its own confidential
materials. Neither party shall make any reference to this Agreement or any
provision hereof in any publicly disseminated literature, printed matter, or
other publicity issued by or for it, except (i) as required by law, (ii) in
connection with a public or private offer or sale of securities, a business
collaboration or transaction, or a governmental or industry regulatory
communication, or (iii) in a fashion and at a time mutually agreed upon by both
parties after the execution of this Agreement. After Aastrom has sold an
Instrument in the ordinary course of business, SeaMED may add Aastrom to
SeaMED's list of customers and may show external product photographs for
marketing purposes but may not disclose the other business terms of this
Agreement to other third parties.
10. Term. The term of this Agreement shall commence on the
----
Effective Date and shall continue in full force and effect until "*" after the
date of shipment by SeaMED of an initial Instrument unit pursuant to this
Agreement. The term of this Agreement shall be renewed automatically after the
initial term for an indefinite continuous term unless (i) SeaMED gives Aastrom
written notice of its intent not to renew at least "*" prior to expiration of
the initial term; or (ii) Aastrom gives SeaMED written notice of its intent not
to renew at least "*" prior to expiration of the initial term. The renewed term
of this Agreement may be terminated at any time by SeaMED giving Aastrom a "*"
written notice of termination, or by Aastrom giving SeaMED a "*" written notice
of termination.
11. Default and Termination.
-----------------------
11.1 Breach. The occurrence of any one or more of the following
------
events shall constitute an event of default hereunder, and upon the expiration
of any applicable time period for a cure, shall constitute a breach of this
Agreement, giving rise to the rights identified in Section 11.2 hereof:
(a) If Aastrom shall default hereunder in the payment of funds
when due and such default continues for a period of thirty (30) days after
written notice thereof;
(b) If either party fails to faithfully perform or observe any
agreement or condition to be performed by such party and if such default
continues for a period of thirty (30) days after written notice thereof,
specifying the nature of such default;
(c) If any proceeding is commenced by or for either party under
any of the bankruptcy laws, or if either party is adjudged insolvent by any
court, makes an assignment for the benefit of creditors, or enters into a
general extension agreement with creditors that either
10
Exhibit 10.41
"Confidential Treatment Requested"
Party reasonably determines has materially impaired the other Party's ability to
perform under this Agreement;
(d) If SeaMED shall breach its obligation to timely repair any
defective Instrument unit pursuant to Section 1.7 or Section 5.2; or
(e) If SeaMED shall breach its obligations of "*"
confidentiality set forth in Sections "*" hereof.
(f) SeaMED breach shall not include events that are design
changes, software or other factors under the primary control of Aastrom or as
set forth in Section 12.2.
11.2 Remedy In addition to all rights and remedies provided under
------
law, the non-defaulting party shall have the right, in the event of default, to
terminate this Agreement and any obligations imposed on such non-defaulting
party hereunder subject to Section 11.3 below.
11.3 Obligations Upon Termination. Upon any termination of this
----------------------------
Agreement, (i) both parties shall fully perform all of their obligations
accruing up through the date of termination and "*"complete any work in process
if so requested by Aastrom upon termination of this Agreement.
12. Miscellaneous
-------------
12.1 Independent Contractors The relationship between Aastrom and
-----------------------
SeaMED hereunder shall be that of independent contractors, and nothing in this
Agreement shall be deemed to constitute a joint venture, partnership, agency or
employer/employee arrangement between the parties. Neither party shall have any
authority or power to bind the other party or to contract in the name of, or
make any representations or warranties, express or implied, on behalf of the
other party, or otherwise create any liability against the other party in any
way for any purpose.
12.2 Causes Beyond Control The parties hereto shall not be
---------------------
responsible for any loss or breach due to delay in delivery or performance
hereunder caused by governmental regulations, controls or directions, outbreak
of a state of emergency, hostilities, civil commotion, riots, epidemics, acts of
God, other natural casualties, fires, strikes, walkouts or other similar cause
or causes beyond the control of the parties. In the event that any party shall
be delayed in, or prevented from, performing its obligations under this
Agreement as a result of any of the foregoing, such party shall promptly notify
the other party of such delay or cessation in performance. "*"
12.3 Successors and Assigns The rights and remedies of Aastrom under
----------------------
this Agreement shall inure to the benefit of the successors, assigns and
transferees of Aastrom. "*"
12.4 Applicable Law. The construction of this Agreement, and the
--------------
rights and liabilities of the parties hereto, shall be governed by the laws of
the State of Michigan.
11
Exhibit 10.41
"Confidential Treatment Requested"
12.5 Severability Each term, condition or provision of this
------------
Agreement shall be viewed as separate and distinct, and in the event that any
such term, condition or provision shall be held by a court of competent
jurisdiction to be invalid, the remaining provisions shall continue in full
force and effect.
12.6 Entire Agreement; Modification and Waiver This Agreement
-----------------------------------------
contains the entire agreement and understanding between the parties and
supersedes all prior agreements and understandings between them relating to the
subject matter hereof, including but not limited to any terms contained in the
Development Agreement pertaining to the commercial manufacture by SeaMED of
Instrument units for Aastrom. This Agreement may not be amended or modified
except by an instrument in writing, signed by duly authorized representatives of
both parties. The waiver, express or implied, by any party of any right
hereunder or of any failure to perform or breach hereof by any other party shall
not be deemed to constitute a waiver of any other right hereunder or of any
claim in respect of any other failure to perform or breach.
12.7 Counterparts This Agreement may be executed in counterparts all
------------
of which together shall constitute one and the same instrument.
12.8 Dispute Resolution. Any controversy or claim arising out of or
------------------
relating to this Agreement, or the breach or interpretation hereof, shall be
resolved through good faith negotiation between the principals of the parties
hereto. Any controversy or claim not resolved by mutual agreement shall be
submitted to binding arbitration in Ann Arbor, Michigan, in accordance with the
rules of the American Arbitration Association ("AAA") as then in effect; and
judgment upon the award rendered in such arbitration shall be final and may be
entered in any court having jurisdiction thereof. Notice of the demand for
arbitration shall be filed in writing with the other party to this Agreement and
with the AAA. In no event shall the demand for arbitration be made after the
date when institution of legal or equitable proceedings based on such claim,
dispute or other matter in question would be barred by the applicable statute of
limitations. This agreement to arbitrate shall be specifically enforceable under
the prevailing arbitration law. The party most prevailing in said arbitration,
as determined by the arbitrator based upon the parties' respective claims and
positions, shall be entitled to recover from the non-prevailing party all
attorneys' fees and other costs incurred in connection with the arbitration
proceeding.
12.9 Notices. All notices and other communications permitted or
-------
required under this Agreement shall be in writing and shall be deemed to have
been given when received at the addresses set forth on the signature page
hereof, or at such other address as may be specified by one party in writing to
the other. Said written notice may be given by mail, telecopy, rush delivery
service, personal delivery or any other means.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AASTROM:
AASTROM BIOSCIENCES, INC.
12
Exhibit 10.41
"Confidential Treatment Requested"
a Michigan corporation
By:
---------------------------------------
Name: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Ph.D.
Title: President and CEO
▇.▇. ▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Ph.D.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
SEAMED:
SEAMED CORPORATION
a Washington corporation
By:
---------------------------------------
Name: W. ▇▇▇▇▇▇ ▇▇▇▇
Title: President and CEO
▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: W. ▇▇▇▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
13
Exhibit 10.41
"Confidential Treatment Requested"
EXHIBIT A
General Description of the System and the Instrument
1.1 The Aastrom Cell Production System represents technology for the ex vivo
growth and expansion of human stem and hematopoietic progenitor cells as
well as other human cells and tissues. In stem cell therapy, the system is
intended to provide cells in sufficient volume and with the necessary
characteristics to complete a stem cell transplantation or a nadir
prevention/rescue resulting from therapies such as high dose chemotherapy
or radiation. These cells are grown from a small starting population of
cells normally obtained from the bone marrow, umbilical cord blood or
peripheral blood. The use of Cell Production System provides for
production of cells that can be safely infused in a patient to augment
recovery of a compromised hematopoietic system.
1.2 The Aastrom Cell Production System consists of (1) a disposable Cell
Cassette cartridge where the growth and expansion of cells takes place, (2)
an Incubator unit and companion System Manager module that monitors the
expansion process, (3) Processor unit that facilitates the initial filling
and inoculation of cells into the Cell Cassette as well as the final
harvest of cells at the completion of the expansion process from the Cell
Cassette, (4) growth medium as required by the cell culture (to which
specified growth factors and glutamine are added), (5) harvest reagents
which facilitate the removal of the expanded cells from the Cell Cassette,
(6) a system Rack will be available to conveniently integrate multiple
Incubator units.
1.2.1 The disposal Cell Cassette contains the cell and medium contact
components for the incubation period and provides a functionally
closed environment in which the cell expansion can occur. The
Cell Cassette is provided fully assembled in a sterile package.
In addition to a Cell Culture Chamber, the medium contact
components include a reservoir for medium supply, a pump
mechanism for delivery of the medium to the growth chamber,
valves to facilitate filling and harvesting, a reservoir for the
collection of waste medium exiting the growth chamber, and a
reservoir for the collection of harvested cells.
The Cell Cassette also includes a gas chamber which is supplied
with a controlled mixture of gases for pH stability and
oxygenation of the growth chamber through a gas permeable,
hydrophobic membrane that separates the two ▇▇▇▇▇▇▇▇.
An Identification key containing a non-volatile memory device is
attached to the Cell Cassette at the beginning of use and
accessed by the System electronics during the cell expansion
process to record pertinent data. The Identification Key is
detached after cell harvest, and can be archived as part of the
patient specific cell expansion record.
A-1
Exhibit 10.41
"Confidential Treatment Requested"
1.2.2 The Incubator unit provides the biological and physical
environment to support the cell growth process. The Cell Cassette
is inserted into the Incubator unit after inoculation is complete
and controls: the flow of medium to the Cell Culture Chamber; the
temperature of the growth medium supply compartment; the
temperature of the growth chamber compartment; and the
concentration and flow rate of gases delivered to the gas
chamber. The Incubator unit provides various safety/alarm
parameters to ensure that the cell expansion process is
proceeding as expected.
The Incubator unit receives commands from keys on its front panel
and communicates with the operator through a central System
Manager. An integral Incubator display also provides information
to the operator. Up to fifty Incubator units can be connected to
the System Manager. Each Incubator has its own micro-processor
controlled systems and operates independently of the System
Manager. As such, it will continue to function in the event of
failure of the System Manager.
1.2.3 The Processor performs the initial setup of the Cell Cassette
with growth medium (supplemented with growth factors) and the
inoculation of cells. The same unit also performs the removal of
the cells from the Cell Cassette at the completion of the cell
expansion process. The System design provides for the appropriate
level of sterility assurance during the inoculation and harvest
procedures.
1.2.3.1 During initial set up and fill, the operator loads the
Cell Cassette onto the Processor, connects the medium
supply (supplemented with growth factors) to the Cell
Cassette and transfers the medium to an internal
reservoir. The operator is prompted to manually and
aseptically inject the cells into the Cell Cassette at
the appropriate time. The process then continues under
software control until the Cell Cassette is ready to be
placed in the Incubator unit for cell expansion.
1.2.3.2 At the completion of the expansion process, the
operator loads the Cell Cassette back into the
Processor, attaches the harvest reagents, and
harvesting of the expanded cells proceeds under
software control. At the completion of the harvest
process, the expanded cell product is contained in a
single container to facilitate washing and preparation
for direct infusion or cryopreservation.
1.2.4 The Growth Medium for the expansion of hematopoietic cells will
be distributed as a separate item in packaging that will
facilitate the addition of growth factors and glutamine followed
by sterile connection to the Cell Cassette just prior to use.
A-2
Exhibit 10.41
"Confidential Treatment Requested"
1.2.5 The Harvest Reagents needed for the process will be
distributed as separate items in packaging that will
facilitate an aseptic connection to the Cell Cassette for
cell harvest.
1.2.6 The system Rack conveniently integrates several Incubators
and the System Manager. The Rack organizes connections to
the facility and the inter connections between the various
modules.
1.2.7 The Application Key is preprogrammed to contain the
instructions required for automatic control of the Processor
and Incubator operation. It is inserted into the Cell
Cassette at the clinical site prior to inoculation of the
Cell Cassette and used by the Processor and Incubator to
record normal and abnormal processing events, as well as the
current state of cell production in the devices. It is the
procedure stored on the Application Key that determines the
controlled culture conditions needed to allow different
types of cells to survive, replicate and differentiate.
The Instrument consists of the components described in paragraphs 1.2.2
(Incubator and System Manager), 1.2.3 (Processor), 1.2.6 (Rack) and 1.2.7
(Application Key).
A-3
Exhibit 10.41
"Confidential Treatment Requested"
EXHIBIT B
Specifications for the Instruments
Instrument Specifications are defined in the following SeaMED documents
Document No. Description
------------ -----------
"*" Specification HDW Requirements Incubator Argonaut
"*" Specification HDW Requirements Processor Argonaut
"*" Specification HDW Requirements Rack Argonaut
"*" Specification HDW Requirements System Manager Argonaut
To be Determined Specification HDW Requirements Application Key Argonaut
B-1
Exhibit 10.41
"Confidential Treatment Requested"
EXHIBIT C
Document Change Control Agreement
1. Purpose and Scope of This Agreement.
-----------------------------------
1.1 The objective of this agreement is to define the document change
control process for documents involved in SeaMED's manufacture of Instruments
for Aastrom.
1.2 "*"
1.3 "*"
1.4 "*"
2. "*"
2.1 "*"
2.2 "*"
2.2.1 "*"
2.2.2 "*"
2.2.3 "*"
2.2.4 "*"
2.3 "*"
3. "*"
3.1 "*"
3.2 "*"
3.3 "*"
3.4 "*"
3.5 "*"
3.6 "*"
3.7 "*"
C-1
Exhibit 10.41
"Confidential Treatment Requested"
4. "*"
4.1 "*"
4.2 "*"
5. Document Change Authorization.
-----------------------------
Aastrom Biosciences, Inc. designated representatives with authority to
approve/disapprove proposed changes. Aastrom Biosciences, Inc. is responsible
for providing SeaMED with updated names of designated representatives.
Name (printed) Signature Initial
-------------- --------- -------
Representative ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------- ----------------------- ---------
Alternate ▇▇▇▇▇ ▇▇▇▇▇
-------------------------- ----------------------- ---------
Alternate ▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------- ----------------------- ---------
Agreed to, for Aastrom Biosciences, Inc.
-------------------------- -----
Name Date
Agreed to, for SeaMED Corp.
-------------------------- -----
Document Control Supervisor Date
-------------------------- -----
Project Director Date
C-2
Exhibit 10.41
"Confidential Treatment Requested"
EXHIBIT D
Pricing
I. Purchase Price. The following formula schedule is used to calculate
--------------
the Purchase Price for the Instrument.
"*"
D-1