EXHIBIT 10.10 EXECUTION COPY
DISTRIBUTION AGREEMENT
COBE BCT, INC.
AASTROM BIOSCIENCES, INC.
Dated as of October 22, 1993
TABLE OF CONTENTS
----------------- Section Page
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ARTICLE I
DEFINITIONS
1.01 Definitions....................................................... 1
ARTICLE II
APPOINTMENT AS DISTRIBUTOR
2.01 Appointment and Acceptance; Products;
Exclusivity; Affiliate Sales...................................... 11
2.02 Relationship; Subdistributors..................................... 14
2.03 Purpose; Development Programs..................................... 15
2.04 Review of Programs and ACL........................................ 19
2.05 Annual Customer Review; Change of Use............................. 21
ARTICLE III
SUPPLIER'S UNDERTAKINGS
3.01 Product Development Program; Diligence............................ 23
3.02 Product Specifications............................................ 23
3.03 Training by the Supplier.......................................... 23
3.04 Sole Distributor.................................................. 24
3.05 Enforcement of Intellectual Property Rights....................... 24
3.06 Manufacturing and Labeling; Product Name; Parts................... 25
3.07 Regulatory Approvals.............................................. 26
3.08 Intellectual Property Indemnification............................. 26
3.09 Insurance; Indemnification for Product Liability.................. 26
3.10 Forecasting Unit Demand........................................... 28
ARTICLE IV
DISTRIBUTOR'S UNDERTAKINGS
4.01 Market Development Program; Diligence............................. 28
4.02 Training by the Distributor....................................... 29
4.03 Advertising....................................................... 29
4.04 Warranties; Service............................................... 29
4.05 Notice of Infringement............................................ 30
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4.06 License........................................................... 30
4.07 Regulatory Approvals.............................................. 30
4.08 Competitive Products.............................................. 31
4.09 Insurance......................................................... 31
4.10 Solutions and Growth Medium....................................... 32
4.11 Information Concerning Pricing.................................... 33
4.12 Indemnification for Product Liability............................. 34
ARTICLE V
DISTRIBUTOR PURCHASES OF THE PRODUCTS
5.01 Orders............................................................ 34
5.02 Purchase Price; Periodic Adjustments.............................. 34
5.03 Monthly Report; Monthly Payment; Distributor Fee.................. 37
5.04 Deliveries........................................................ 38
ARTICLE VI
TRADEMARKS AND TRADE NAMES
6.01 License........................................................... 38
6.02 Licenses to Third Parties......................................... 38
6.03 Effect of Use..................................................... 38
6.04 Cessation of Use.................................................. 39
ARTICLE VII
TERM; TERMINATION
7.01 Term.............................................................. 39
7.02 Notice of Breach.................................................. 39
7.03 Cure Period....................................................... 39
7.04 Objection; Negotiation............................................ 40
7.05 Remedy; Partial Termination; Termination Upon Bankruptcy.......... 40
7.06 Other Remedies.................................................... 42
7.07 Effect of Termination by Distributor.............................. 42
7.08 Attorney's Fees and Costs......................................... 43
7.09 Interest.......................................................... 43
7.10 Transition Upon Termination....................................... 43
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ARTICLE VIII
CONFIDENTIALITY
8.01 Confidentiality................................................. 44
8.02 Survival of Covenants to Keep Secret............................ 44
8.03 No License...................................................... 44
ARTICLE IX
FORCE MAJEURE
9.01 Force Majeure................................................... 45
ARTICLE X
MISCELLANEOUS PROVISIONS
10.01 Amendment; Alteration........................................... 45
10.02 Notice.......................................................... 46
10.03 Arbitration..................................................... 46
10.04 Governing Law................................................... 47
10.05 Waiver.......................................................... 47
10.06 Entire Agreement; Assignment.................................... 47
10.07 Parties in Interest............................................. 47
10.08 Severability.................................................... 48
10.09 Headings........................................................ 48
10.10 Counterparts.................................................... 48
10.11 Approvals....................................................... 48
SCHEDULES
Schedule A -- Product Development Program Schedule B -- Market Development Program Schedule C -- Annual Commitment List
EXECUTION COPY
DISTRIBUTION AGREEMENT
----------------------
DISTRIBUTION AGREEMENT dated as of October 22, 1993 between AASTROM BIOSCIENCES, INC., a Michigan corporation (the "Supplier"), and COBE BCT, INC.,
-------- a Colorado corporation (the "Distributor").
-----------
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Supplier wishes to create, develop and manufacture and supply Products (as defined below) and to have the Products marketed worldwide;
WHEREAS, the Distributor wishes to sell, market and distribute the Products worldwide; and
WHEREAS, the Supplier wishes that the Distributor distribute the Products worldwide;
NOW, THEREFORE, in consideration of the premises and mutual covenants and agreements hereinafter set forth, the Supplier and the Distributor agree as follows:
ARTICLE I
-----------
SECTION 1.01. Definitions. As used in this Agreement, the following
----------- terms shall have the following meanings:
"ACL" has the meaning specified in Section 2.04(b).
---
"Actual International Direct Sales" means for any Direct Sales Country
--------------------------------- the unit Sales of any of the Products other than Spare Parts by the Distributor to Stem Cell Therapy Customers in such Direct Sales Country in which the purchase price is due and payable in cash from the purchaser of such Products substantially contemporaneously with (i.e., within 60 days of) such Sales in
---- such Country expressed in the official currency unit of such Country.
"Actual International Direct Sales Amount" for any Product in any
---------------------------------------- Direct Sales Country for any calendar month means the Actual International Direct Sales of such Product during such month in such Country multiplied by the greater of (a) the Average International Direct Selling Price for such Product for such Country and (b) the Minimum International Direct Selling Price for such Product for such Country expressed in the official currency unit of such Country.
"Actual Subdistributor Sales" means the unit Sales of the Products
--------------------------- other than Spare Parts by the Distributor to Subdistributors outside the United States (other than Direct Sales Countries) in which the purchase price is due and payable in cash from the purchaser of such Products substantially contemporaneously with (i.e., within 60 days of) such Sales.
----
"Actual Subdistributor Sales Amount" for any Product for any calendar
---------------------------------- month means the Actual Subdistributor Sales of such Product during such month multiplied by the greater of (a) the Average Subdistributor Selling Price for such Product and (b) the Minimum Subdistributor Selling Price for such Product.
"Average Subdistributor Selling Price" means, for any Product for any
------------------------------------ calendar month, the aggregate selling price, net of any applicable discounts, less any payments made to Subdistributors, of Actual Subdistributor Sales divided by the quantity of such Product sold during such calendar month.
"Affiliate" means (a) with respect to the Distributor, any Person
--------- other than the Distributor (i) that is controlled, either directly or indirectly, by Investment AB Cardo, (ii) for which a Person controlled, either directly or indirectly, by Investment AB Cardo is the principal manager, or (iii) in which Investment AB Cardo has an equity ownership interest of ten percent or more; and (b) with respect to the Supplier, any Person other than the Supplier (i) that is controlled, either directly or indirectly, by the Supplier, (ii) for which the Supplier is the principal manager or (iii) in which the Supplier has an equity ownership interest of ten percent or more.
"Affiliate Sales" has the meaning specified in Section 2.01(d).
---------------
"Agreement" or "this Agreement" means this Distribution Agreement
--------- -------------- dated as of October 22, 1993 between the Supplier and the Distributor (including the schedules hereto) and all amendments, modifications and supplements made in accordance with Section 10.01 hereof.
"Average International Direct Selling Price" means, for any Product in
------------------------------------------ any Direct Sales Country for any calendar month, the aggregate selling price, net of all applicable discounts, less any payments made to Subdistributors (all expressed in the offficial currency of such Country), of all Actual International Direct Sales of such Product in such Country during such calendar month, divided by the quantity of such Product sold during such calendar month in such Country expressed in the official currency unit of such Country.
"Base Term" has the meaning specified in Section 7.01.
---------
"BIU" has the meaning specified in Section 2.01(a)(i).
---
"Change of Use" has the meaning specified in Section 2.04(a).
-------------
"Co-Marketing Arrangement" has the meaning specified in Section
------------------------ 7.05(b).
"Competitive Product" means any product (other than the Distributor's
------------------- Products) that competes with the Products for use by the same Customer such that the Customer might use such product instead of any of the Products.
"Complete System Sale" means the Sale by the Distributor to one or
-------------------- more Stem Cell Therapy Customers of all of the Products specified in (i), (iii), (vii), (x) and (xi) of Section 2.01(a) at such time as all of the Products specified in (ii), (v), (vi), (viii) and (ix) of Section 2.01(a) are generally available for purchase by Customers and have been delivered to the Distributor or in the Distributor's reasonable judgment, are available for delivery, to the Distributor.
"Confidential Information" means all confidential or secret data,
------------------------ reports, interpretations, forecasts, records, marketing, sales and other commercial data or reports, trade secret information, know-how methods, procedures, designs, technology, inventions, ideas, specifications, plans, patent applications and related correspondence, or other information that the parties hereto provide to each other in connection with this Agreement, together with analyses, compilations, studies or other documents, whether prepared by their respective agents or attorneys, which contain or otherwise reflect such information; provided, however, that the following shall not constitute
-------- ------- Confidential Information for purposes of this Agreement:
(a) information which was in one of such parties' possession prior to
its receipt from the other of such parties;
(b) information which is obtained by one of such parties from a third
person who, insofar as is known to such party, is not prohibited from
transmitting the information to such party by a contractual, legal or
fiduciary obligation to the other of such parties; and
(c) information which is or becomes publicly available through no
fault of either of such parties.
"Control" (including the terms "controlled by" and "under common
------- ------------- ------------ control with"), with respect to the relationship between or among two or more - ------------ Persons, means the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise, including, without limitation, the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person.
"Customer" means any party to whom Products are sold or reasonably are
-------- expected to be sold. Different units within a single Person (e.g., a blood
---- bank, an apheresis center, a transplant center) will be considered separate Customers for purposes of this Agreement if each such unit has the primary decision-making authority for the purchase of the Products, notwithstanding the fact that payment for the Products may be issued by the same Person.
"Customer License" has the meaning specified in Section 2.01(a).
----------------
"Customer Service Information" has the meaning specified in Section
---------------------------- 2.04(b).
"Deductible" has the meaning specified in Section 3.09(b).
----------
"Deemed International Direct Sales" means, for any Product (other than
--------------------------------- Spare Parts) in any Direct Sales Country for any calendar month, the aggregate unit sales of such Product by the Distributor to Stem Cell Therapy Customers, other than Actual International Direct Sales.
"Deemed International Direct Sales Amount" for any Direct Sales
---------------------------------------- Country calendar month means the Deemed International Direct Sales of each Product in any Direct Sales Country during such calendar month multiplied by the greater of (a) the Average International Direct Selling Price for such Product in such Direct Sales Country and (b) the Minimum International Direct Selling Price for such Product for any Direct Sales Country expressed in the official currency unit of such Country.
"Deemed Subdistributor Sales" means, for any Product (other than Spare
--------------------------- Parts) for any calendar month, the aggregate unit Sales of such Product by the Distributor, other than Actual Subdistributor Sales.
"Deemed Subdistributor Sales Amount" for any calendar month means the
---------------------------------- Deemed Subdistributor Sales of each Product during such calendar month multiplied by the greater of (a) the Average Subdistributor Selling Price for such Product and (b) the Minimum Subdistributor Selling Price for such Product.
"Direct Sales Countries" has the meaning specified in Section 2.02(c).
----------------------
"Disposables" has the meaning specified in Section 2.01(a).
-----------
"Distributor" has the meaning set forth in the preamble to this
----------- Agreement.
"Distributor Customer Service Information" has the meaning specified
---------------------------------------- in Section 2.04(b).
"Distributor Indemnified Person" has the meaning specified in Section
------------------------------ 4.12.
"Distributor's Notice of Breach" has the meaning specified in Section
------------------------------ 7.02.
"Distributor's Products" means (i) the Spectra Apheresis System, (ii)
---------------------- the 2991 Blood Cell Processor, (iii) stem cell freezing solutions and protocols, (iv) immunological tumor purging systems that do not provide for positive selection of stem cells, (v) all improvements or enhancements to any of the foregoing and (vi) any
successor product to any of the foregoing that is not a Competitive Product.
"Equipment" has the meaning specified in Section 2.01(a).
---------
"Excess Payments" has the meaning specified in Section 4.09.
---------------
"Exchange Rate" means, with respect to any Direct Sales Country for
------------- any calendar month the average monthly market rate at which the official currency unit of such Country is exchangeable into one U.S. dollar.
"FDA" means the United States Food & Drug Administration.
---
"Fiscal Year" means any fiscal year ended June 30.
-----------
"Growth Medium" has the meaning specified in Section 2.01(a).
-------------
"Infringement" has the meaning specified in Section 3.05.
------------
"Intellectual Property Rights" means any rights to any patents, patent
---------------------------- rights, copyrights, trademarks, service marks, trade names, trademark rights, trade name rights or trade secrets.
"International Direct Monthly Purchase Price" has the meaning
------------------------------------------- specified in Section 5.02(c).
"International Direct Products" means the Products other than Spare
----------------------------- Parts sold by the Distributor to Stem Cell Therapy Customers in Direct Sales Countries.
"IP Enforcement Actions" has the meaning specified in Section 3.05.
----------------------
"IP Enforcement Costs" has the meaning specified in Section 3.05.
--------------------
"Joint Registration" has the meaning specified in Section 4.07.
------------------
"License" has the meaning specified in Section 7.07(a).
-------
"Market Development Program" means the program attached hereto as
-------------------------- Schedule B, to promote and market the Products, as such program may be modified and amended from time to time in accordance with Section 2.04 hereof.
"Milestone Fees" has the meaning specified in Section 5.03(c).
--------------
"Minimum Direct International Selling Price" means, for each Product
------------------------------------------ in each Direct Sales Country, the minimum direct international selling price for such Product in such Country expressed in the official currency unit of such Country.
"Minimum Subdistributor Selling Price" means, for each Product, the
------------------------------------ minimum selling price to Subdistributors for such Product.
"Monetary Breach" has the meaning specified in Section 7.03.
---------------
"Monthly Parts Purchase Price" has the meaning specified in Section
--------------------------- 5.02(e).
"Monthly Purchase Price" means the sum of the U.S. Monthly Purchase
---------------------- Price, the International Direct Monthly Purchase Price for each Direct Sales Country, the Monthly Parts Purchase Price and the Subdistributor Purchase Price.
"Monthly Report" has the meaning specified in Section 5.03.
--------------
"Notice of Breach" has the meaning specified in Section 7.02.
----------------
"Objection" has the meaning specified in Section 7.04.
---------
"Party" means a party to this Agreement.
-----
"Permitted Clinical Research Applications" means any clinical or
---------------------------------------- therapeutic use of the Products for any clinical research or trial that is expected to result in a new application of, or a new FDA-approved indication for, the Products.
"Person" means any individual, partnership, firm, corporation,
------ association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.
"Plan" has the meaning specified in Sections 2.03(e) and (f).
----
"Policy" has the meaning specified in Section 3.09(a).
------
"Premiums" has the meaning specified in Section 3.09(a).
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