DISTRIBUTION AND LICENSE AGREEMENT

 

 

                                                                      EXHIBIT 10

 

                       DISTRIBUTION AND LICENSE AGREEMENT

 

This Distribution and Manufacturing License Agreement ("Agreement") is entered

into as of the 28th day of March, 2005 by and between Asahi Kasei Medical Co.,

Ltd., a Japanese corporation ("ASAHI") with an office and place of business at

9-1, Kanda Mitoshirocho, Chiyoda-ku, Tokyo, 101-8482 Japan, and THERMOGENESIS

CORP., a Delaware corporation, ("THERMO") with an office and place of business

at 2711 Citrus Road, Rancho Cordova, California, 95742.

 

                                   WITNESSETH:

WHEREAS, THERMO represents that it owns certain intellectual property rights

covering certain inventions relating to the design and manufacture of a

"CryoSeal(R) System" and the Products (defined below) for the rapid harvesting

of cryoprecipitate and thrombin from human plasma and has the right to grant the

license herein contained;

 

WHEREAS, THERMO represents that it has filed patent applications specified in

Exhibit A (The "Patent Applications") and is preparing additional patent

applications, all of which either have been and/or will be filed in the

Territory; and

 

WHEREAS, ASAHI desires to obtain, and THERMO is willing to grant certain

manufacturing and distribution rights for the Product (as defined below);

 

WHEREAS, the parties executed the "Distribution and Manufacturing License

Agreement" as of 29th day of May, 1996, as amended by "Amendment to Distribution

and Manufacturing License Agreement" as of June 21, 1999 ("Previous Agreements")

under which THERMO granted to ASAHI the right and license to manufacture or have

manufactured, the Auto-Cryo Kit in Japan (with the exception of the Applicators)

and the unrestricted right to market and distribute the Device, Auto-Cryo Kit

and Applicators in Japan and ASAHI paid to THERMO License and Distribution Fee

equal to ^Removed pursuant to Rule 24b-2 under the Securities Exchange Act of

1934^ under Section 3(a) of the Previous Agreements.

 

WHEREAS, ASAHI purchased common shares of THERMO equivalent to US$700,000 under

Section 3(j) of the Previous Agreements.

 

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WHEREAS, Asahi desires to market and obtain distribution and marketing rights

for the TAD Stand Alone (as defined herein) on a non-exclusive basis within the

territory;

 

WHEREAS, THERMO and ASAHI now desire to unify such "Distribution and

Manufacturing License Agreement" and "Amendment to Distribution and

Manufacturing License Agreement" into one text and make several clarifications

and modifications to the terms and conditions thereof.

 

NOW, THEREFORE, in consideration of the foregoing and for the other good and

valuable consideration, the receipt and sufficiency of which are hereby

acknowledged, the parties, intending to be legally bound, hereby agree as

follows:

 

1.   Definitions.

----------------

 

     As used in this Agreement, the following terms shall have the meanings

hereinafter set forth:

 

     a.   "Applicators" shall mean the hand held devices for mixing and applying

         the cryoprecipitate and thrombin produced by the Processing Disposable

         to the wound site. It is understood each type of applicator listed in

         Exhibit B shall be included in Applicators.

 

      b.   "Asian Pacific Rim Countries" means South and North Korea, Taiwan, the

         Philippines, Thailand, Singapore, India and Malaysia.

 

     c.   "CryoSeal System" shall mean the system for harvesting fibrinogen rich

         cryoprecipitate and activated thrombin simultaneously from human plasma

         which includes the Device, Processing Disposable, Thrombin Reagent and

         Applicators.

 

     d.   "Device" shall mean the thermodynamic device on which the Processing

         Disposable will be placed and which will precisely control and alter

         the temperature of the plasma in order to achieve the separation and

         collection of the cryoprecipitate. It is understood that CS-1 listed in

         Exhibit B shall be included in the Device.

 

     e.   "Hanging Rack" shall mean the rack to hang Processing Disposable for

         the Device.

 

     f.   "Intellectual Property Rights" means the Licensed Patents and the

         Know-How.

 

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      g.   "Know-How" shall mean all technical information, secret processes,

         formulae, designs and data relating to the manufacture of the Product

         presently owned by THERMO or acquired by it during the term of this

         Agreement and clinical data and any other technical information

         provided by THERMO to ASAHI hereunder.

 

     h.   "Licensed Patents" shall mean; (i) the Patent Applications and any

         corresponding national and regional patent applications with respect to

          the Product in the Territory; (ii) any patent applications with respect

         to the Product in the Territory that are or will be owned or controlled

         by THERMO during the term of this Agreement; (iii) any patent issued on

         the patent applications stated in (i) and (ii); and (iv) any patent

         maturing from (i), (ii) and (iii) including all extensions,

         continuations, continuations-in-part or divisions, reexaminations and

         reissues; or equivalent, if any, related to the Product.

 

     i.   "Point of Shipment" means THERMO's Rancho Cordova, California

         manufacturing facilities, Kawasumi's manufacturing facility in Thailand

         or the manufacturing facilities designated by THERMO and agreed by

         ASAHI.

 

     j.   "Processing Disposable" shall mean the sterile blood processing

         disposable for harvesting fibrinogen rich cryoprecipitate and/or

         activated thrombin from plasma (not including Thrombin Reagent). It is

         understood that CP-3 Disposable, a sterile blood processing disposable

         with TAD, listed in Exhibit B shall be included in the Processing

         Disposable.

 

     k.   "Product" shall mean Applicators, Device, Hanging Rack, Processing

         Disposable, TAD, TAD Stand Alone, Thrombin Reagent, and/or Warming

         Tray, including those which are improved or modified. It is understood

         that CryoSeal System shall be included in the Product.

 

     l.   "TAD" (Thrombin Activation Device, formerly known as ATAK) shall mean

         the sterile disposable apparatus for the extraction of activated

         thrombin from human plasma except for TAD Stand Alone.

 

     m.   "TAD Stand Alone" shall mean the TAD in the form of a product designed

         for stand-alone use or any form other than a part of the Processing

         Disposable. It is understood that TAD Stand Alone includes Thrombin

         Processing Device (TPD) and IC TAD listed in Exhibit B, of which

         specification shall be determined by the parties.

 

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     o.   "Territory" shall mean the country of Japan.

 

     p.   "Thrombin Reagent" shall mean the reagent for production of thrombin to

         be injected into the TAD or TAD Stand Alone disposables.

 

     q.   "Warming Tray" shall mean the device to warm syringes of

         cryoprecipitate and/or thrombin in the sterile field.

 

2.   Appointment of Exclusive Distributor.

-----------------------------------------

 

     THERMO hereby appoints ASAHI as THERMO's exclusive distributor to market,

     distribute and sell the Product except for TAD Stand Alone to be supplied

     by THERMO to all existing and potential customers for any purpose

     including, but not limited to, surgical procedures and regeneration medical

     treatment within the Territory. During the term of this Agreement, THERMO

     may not directly or indirectly market, distribute or sell the Product

     except for TAD Stand Alone within the Territory. ASAHI may appoint one or

     more sub-distributors within any portion of the Territory.

 

3.   Appointment of Non-Exclusive Distributor.

--------------------------------------------

 

     THERMO hereby appoints ASAHI as THERMO's non-exclusive distributor to

     market, distribute and sell the TAD Stand Alone to be supplied by THERMO to

     all existing and potential customers for any purpose including, but not

     limited to, surgical procedures and regeneration medical treatment within

     the Territory. ASAHI may appoint one or more sub-distributors within any

     portion of the Territory.

 

4.   Clinical Trials and Governmental Approval.

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     a.    Clinical   Trial(s) and Governmental   Approval in the Territory.   ASAHI

          shall have sole responsibility for conducting preclinical and clinical

          trial(s) and shall make all regulatory submissions for the approval by

          Ministry of Health, Labor and Welfare of Japan ("MHLW") and supplement

          and amendment of such   approval   necessary for the sale of the Product

          for the   application   for which ASAHI   intends to sell the Product and

          for   approval by MHLW to receive the   reimbursement   of the Product in

          the Territory if available. THERMO shall cooperate with ASAHI for such

          trial(s) and regulatory submissions upon reasonable requests by ASAHI.

 

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          ASAHI shall   purchase   the Product   from   THERMO for   preclinical   and

          clinical   trial(s) in the   Territory at market   pricing   provided upon

          request,   if necessary   and THERMO shall provide such   materials   upon

          ASAHI's   reasonable   request   for   shipment to ASAHI as   scheduled   by

          THERMO.   All shipping   costs and any other   special costs arising from

          the express request of ASAHI will be paid by ASAHI.

 

     b. FDA Approval.

        -------------

 

         (1)   THERMO shall make its best efforts to obtain the United States

              Food and Drug Administration ("FDA") approval to market the

              CryoSeal System and shall submit periodic reports to show the

              status to ASAHI at least once every calendar quarter, beginning

              with the first full calendar quarter following execution of this

              Agreement.

 

         (2)   THERMO shall submit to FDA an application to market the CryoSeal

              System promptly upon completion of clinical trials and review of

              trial outcomes and preparation of submission.

 

     c.   THERMO shall provide to ASAHI, when and as available, all test data,

         clinical trial studies (including, but not limited to, all information

         exchanged with FDA, within two weeks of receipt from FDA or submission

         to FDA) and related information available to THERMO in order to assist

         ASAHI in obtaining governmental approvals for the CryoSeal System.

 

5.   Supply of the Product for Distribution.

-------------------------------------------

 

     a.    After obtaining regulatory approval by MHLW set forth in Section 4(a),

          ASAHI shall   purchase from THERMO and THERMO shall supply to ASAHI the

          Product which is listed in Exhibit B for distribution in the Territory

           at pricing to be   separately   agreed by the parties and to be shown in

          Exhibit B, provided that the parties   acknowledge that such prices set

          forth in   Exhibit B are   based on the   estimate   of the   reimbursement

          prices to be approved by MHLW and agree to review and adjust the price

          set forth in Exhibit B after obtaining the   reimbursement   approval by

          MHLW. THERMO may have Kawasumi   Laboratories,   Inc. with its principle

          office   of   business   at   3-28-15,   Minami-Oi,    Shinagawa-ku,    Tokyo

          140-8555,   Japan   manufacture   the   Product to be   supplied   to ASAHI,

          provided that, it is understood   that this provision shall not release

          THERMO from its obligations hereunder.

 

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     b.    (1)   Upon agreement of pricing described in Section 5(a), ASAHI agrees

               to project,   and then purchase the minimum quantity of Processing

               Disposable,   Applicators and Thrombin   Reagent from THERMO as set

               forth   on   Exhibit   C for   each   YEAR.   For the   purpose   of this

               Section,   "YEAR"   shall mean one (1) year   period   commencing   on

               April 1st that comes after the date of reimbursement   approval on

               Processing   Disposable,   Applicators and Thrombin Reagent by MHLW

               and each one (1) year period   thereafter.   In   addition,   for the

               purpose of this Section,   Processing Disposable,   Applicators and

               Thrombin Reagent shall be considered   purchased upon the delivery

               under Section 5(d).

 

         (2)   The parties acknowledge that the minimum purchase quantity for

              each YEAR set forth in Exhibit C are based on the prices listed

              Exhibit B and agree to review and adjust the minimum purchase

              quantity set forth in Exhibit C if the prices are adjusted.

 

         (3)   If ASAHI manufactures by itself Processing Disposable, Applicators

              and/or Thrombin Reagent pursuant to Sections 7(a) and/or 7(f), the

              minimum purchase quantity for a YEAR set forth in Exhibit C shall

              be deducted by the number of units of Processing Disposable,

               Applicators and/or Thrombin Reagent manufactured and sold by ASAHI

              in such a YEAR. For the purpose of this Section, Processing

              Disposable, Applicators and/or Thrombin Reagent shall be

              considered manufactured and sold upon the shipment thereof.

 

         (4)   The parties understand that any failure to meet the minimum

              purchase quantity in each Year set forth in Exhibit C due to any

              cause not attributable to ASAHI including, but not limited to,

              THERMO's rejection of ASAHI's order or failure to deliver all or

              part of the Product in accordance with an accepted order shall not

              be deemed ASAHI's breach of this Section and in such case THERMO

               shall have no right to terminate this Agreement pursuant to

              Section 20(e).

 

     c.   Order and Acceptance. All orders for the Product to be supplied by

         THRMO to ASAHI shall be by means of a signed written purchase order, in

         a form to be furnished by THERMO, which shall be submitted to THERMO at

         THERMO's address for notice purposes set forth in Section 27, and shall

         request a delivery date. Orders may be placed by fax. THERMO shall make

 

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         its best effort to accept ASAHI's purchase order. THERMO shall notify

         ASAHI in writing of its acceptance or rejection of an order within

         seventy-two (72) hours of receipt. THERMO shall have no liability to

         ASAHI with respect to purchase orders that are rejected by THERMO

         despite its best effort in accordance with the foregoing, provided

         that, THERMO shall accept a purchase order placed ninety (90) days

         before the delivery date.

 

     d.   Delivery Term. The delivery term for the Product to be delivered by

         THERMO to ASAHI shall be F.O.B. THERMO Point of Shipment. THERMO shall

         render ASAHI documents and cooperation necessary for the exportation

         and importation of the Product.

 

     e.   Invoicing; Payment. THERMO shall submit an invoice to ASAHI with each

         shipment of the Product ordered by ASAHI. Each invoice shall be due and

         payable net thirty (30) days from the date of ASAHI's receipt of the

         Product at ASAHI's facility. All invoices shall be sent to ASAHI's

         address for notice purposes set forth in Section 27, without regard to

         the actual shipping address for the Product. Each such invoice shall

         state ASAHI's aggregate and unit purchase price for the Product in the

         relevant shipment. ASAHI shall make all payments to a bank account

         designated by THERMO.

 

     f.   All Product delivered by THERMO to ASAHI pursuant to this Agreement

         shall be suitably packed for surface or air shipment, in ASAHI's sole

         discretion, in THERMO's standard shipping cartons, marked for shipment

         to such location or locations as ASAHI may designate. The Product

          listed in Exhibit B except for Device, Hanging Rack and Warming Tray

         delivered by THERMO to ASAHI pursuant to this Agreement shall be

         sterilized in accordance with applicable laws and regulations within

         ninety (90) days before the delivery. For such sterilization to occur

         on a timely basis, ASAHI acknowledges that the purchase order should be

         placed to THERMO not later than ninety (90) days before the delivery.

 

     g.   The specification of any Product to be supplied to ASAHI by THERMO

         shall be agreed on by the parties and provided to ASAHI by THERMO. The

         specification of such Product or any part of it and the manufacturing

         process for such Product including sterilization process shall not be

         changed unless otherwise agreed by the parties.

 

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     h.   Payment Currency. All payments for the price of the Product due or

         payable under this Agreement shall be made in United States Dollars

         ("USD"). The parties will meet to negotiate a new price for items

         listed in Exhibit B annually or upon either party's request.

 

6.   Warranty and Liability.

---------------------------

 

     The   warranty   for the   Product   supplied   by   THERMO to ASAHI   under   this

     Agreement shall be as provided below:

 

     a. Specific Warranties. THERMO warrants that:

 

         (1)   Title. The title to the Product supplied to ASAHI from THERMO,

              when conveyed to ASAHI, shall be good and transferred rightfully

              except in circumstances where (a) ASAHI has reason to know that

              THERMO does not claim title, or (b) an agreement between the

              parties otherwise provides; and they shall be delivered free from

              any security interest or other lien or encumbrance except as

              otherwise expressly agreed upon by ASAHI;

 

         (2)   Workmanship. The Product shall, upon the tender of delivery, be

              free from defects in (a) the composition or substance of materials

              and (b) in THERMO's workmanship or in materials arising from

              THERMO's workmanship;

 

         (3)   Conformity. The Product supplied to ASAHI by THERMO shall, upon

              tender of delivery conform to all applicable specifications and

              drawings which are a part of any contractual documents which

              incorporate this clause and to any express representations or

              descriptions contained in such contractual documents; and

 

         (4)   Unless otherwise provided herein, THERMO does not warrant the

              result of various possible uses or purposes for the Product or

              warrant that the Product is fit or intended for any particular use

              or intended purpose.

 

     b.    Notice:   Breach of Warranty:   Remedy. Upon notice from ASAHI to THERMO

          of a breach of the   Warranty in Section   6(a)(l),   above   THERMO shall

          promptly secure removal of any encumbrance on the title. Except as set

          forth   in   Section   19   below,   ASAHI's   remedy   for a   breach   of the

          warranties   set forth in   Sections   6(a)(2)   and   6(a)(3)   above,   and

          THERMO's obligation and liability   therefor,   are expressly limited to

 

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          the repair,   rework or replacement of any non-conforming   Product,   or

          parts,   or   components   thereof,   not   including,   however,   any costs

          occasioned by the removal or reinstallation   of such materials,   parts

          or   components.   At   THERMO's   request,   ASAHI   shall   return any such

          non-conforming   Product   to THERMO at its   manufacturing   facility   in

          Rancho Cordova, CA, USA, at THERMO's expense.   Replacement or repaired

          or reworked supplies shall be returned to ASAHI at THERMO's expense.

 

     c.    In case of the Device,   THERMO's   obligation   under   Section 6(b) with

          respect to the breach of Section 6(a)(2) and (3) is limited to defects

          becoming apparent within the shorter of (i) two years from the date of

          delivery   of the Device   from THERMO to ASAHI or (ii)one (1) year from

          the date of installation of the Device at the customer's premises.

 

     d.    THERMO's   obligation   under Section 6(b) with respect to the breach of

          Sections 6(a)(2) and 6(a)(3) is limited to defects   becoming   apparent

          within the usable   period of the   Product   approved by MHLW in case of

          the   Product   which   is   required   to be   sterilized   pursuant   to the

          applicable law in the Territory.

 

     e.    THERMO's   obligation   under Section 6(b) with respect to the breach of

          Sections 6(a)(2) and 6(a)(3) is limited to defects   becoming   apparent

          within   twelve (12) months from the date of delivery of the Product in

          case of any Product   other than Device and the   Product   mentioned   in

          Section 6(d).

 

     f.    ASAHI shall notify of written notification stating such particulars as

          may   reasonably   be   necessary   to notify   THERMO of the nature of the

          asserted   non-conformance promptly after such defect becomes apparent,

          but in no event later than fifteen (15) days   following   expiration of

          each period stated in Sections 6(c), (d) and (e). The Product or parts

          or components thereof repaired,   reworked, or furnished in replacement

          pursuant to this Section 6(b) shall,   upon installation or delivery to

          ASAHI,   also be subject to the   provisions   of this clause to the same

          extent as Product initially delivered or installed.

 

     g.    Agreement   on   Warranties.   THERMO and ASAHI agree that   Section 6 has

          been the subject of discussion and is fully understood by the parties,

          and that the express   warranties,   the limitation of ASAHI's remedies,

          the exclusion of and waiver by ASAHI of all other warranties, remedies

          and damages, all as set forth in this paragraph,   are in consideration

          of the price of the Product   and the other   mutual   agreements   of the

          parties set forth in any contractual   documents which incorporate this

          clause; provided, however, that this Section 6 shall not apply in case

 

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          of product   liability   claims and the   provision   for   indemnification

          found in Section 19.

 

7.   Grant of Exclusive License and Manufacturing.

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     a.   Grant of Exclusive License. THERMO hereby grants ASAHI the exclusive

         right and license under the Intellectual Property Right, with the right

         to sublicenses, (i) to use, market, distribute and sell the Product

         (except for TAD Stand Alone, which are provided for in Section 8 below

         on a non-exclusive basis) within the Territory, (ii) to manufacture and

         have manufactured the Processing Disposable and Thrombin Reagent and

         any improvement and modification thereof within the Territory, for any

         purpose including, but not limited to, surgical procedures. During the

         term of this Agreement, THERMO may not grant to any third party a right

          or license that conflicts with the right and license granted to ASAHI

         under this Section 7(a) within the Territory.

 

     b.    ASAHI agrees that it shall conform to the good manufacturing practice

          and performance standards and other requirements of the MHLW that are

          applicable to the manufacture and distribution of the Product in the

          Territory. ASAHI will deliver to THERMO the following information and

          corroborative data on their manufacturing and testing of Processing

          Disposable and Thrombin Reagent manufactured by ASAHI:

 

     o     Materials   used   in   Processing   Disposable   and   Thrombin   Reagent  

     o     Biocompatibility   testing that   complies   with   Tripartite   Guidance

     o     Labeling  

     o     Intended   Use

     o     Characterization   of the   Cryoprecipitate

          and/or thrombin

     o     Sterilization Data

 

     c.   Sell Back of Products. ASAHI agrees, upon terms and other standard

         conditions to be agreed upon by the parties, to sell Processing

         Disposable, Thrombin Reagent and Applicators manufactured by ASAHI to

         THERMO at a price which is equivalent to ASAHI's manufacturing cost and

         transportation and insurance charges plus ^Removed pursuant to Rule

         24b-2 under the Securities Exchange Act of 1934^.

 

     d.   Technical Support. THERMO shall make available to ASAHI, all technical

         and other information in its possession at any time during the term of

         this Agreement relating to the manufacture of the Processing Disposable

         and Thrombin Reagent, including specifications and quality control

 

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         information. THERMO shall, during the period from the date of ASAHI's

         request to the date twelve (12) months thereafter, make available to

         ASAHI the services of such personnel of THERMO as THERMO deems

         necessary, or as reasonably requested by ASAHI, provided however, that

         such time shall not exceed sixty (60) hours of time during any calendar

         quarter and provided that ASAHI gives THERMO at least thirty (30) days

         advance notice of the need for such time and provides THERMO with a

         report of the work assistance needed. Thereafter, during the term of

         this Agreement, in order to reasonably assist ASAHI in its efforts to

         manufacture or have manufactured Processing Disposable and Thrombin

         Reagent, THERMO shall provide technical assistance as the parties may

         agree. All technical support to be provided pursuant to this Section

         shall be at ASAHI's expense at THERMO's then standard rates and

         charges, including living and travel expenses from the U.S. to Japan,

         and back to the U.S., if requested by ASAHI.

 

     e.   Manufacturing Information. Under Joint Escrow Agreement dated 8th day

         of June 2000, executed by THERMO, ASAHI and Tashiro Patent Office,

         located at 2-16, Toranomon 1-chome, Minato-ku, Tokyo 105-0001 Japan

         ("Tashiro Patent Office")(such agreement shall be referred to as

         "Escrow Agreement"), THERMO shall deposit in Tashiro Patent Office in

         Japan a certified duplicate copy of all technical and other information

         relating to the manufacture of the Device and Applicators, including

         specifications, drawings and quality control information ("Technical

         Documentation"), which shall in turn be delivered by the Tashiro Patent

         Office to ASAHI upon the occurrence of events stated in Section 7(f),

         as certified by the parties. The Technical Documentation shall be

         updated by additional certified copies of current information by THERMO

         immediately after the execution hereof, annually on or before August 30

         of each year. ASAHI shall pay for all storage and holding fees charged

         by Tashiro Patent Office for holdi