EXHIBIT 10
INTERNATIONAL DISTRIBUTION AGREEMENT
Agreement, made and effective as of October
13, 2005 ("Effective
Date") by and
between
(1) ThermoGenesis Corp., a corporation having a place of business at 2711
Citrus Road,
Rancho Cordova, CA 95742, USA ("TGC") and
(2) Amersham Biosciences AB, a GE Healthcare company headquartered at
Bjorkgatan 30,
SE-751 84 Uppsala, Sweden ("GEHC").
RECITALS
Whereas, TGC is developing the Auto
Xpress(TM) (AXP(TM)) System, which automates
the volume reduction process for cord blood
(the "AXP System"). This system
consists of a battery-operated device, a
processing set that has integrated
sampling segments and GMP-compliant
software (XpressTRAK(TM)). In addition TGC
has already commercialized the
BioArchive(R) System, a computer-controlled,
robotic liquid nitrogen cryopreservation
and storage system that enables the
freezing and managing of approximately
3,600 blood component samples (the
"BioArchive System").
Whereas, GEHC has an interest in obtaining,
and TGC has an interest in granting
to GEHC, distribution rights to these two
TGC product lines.
Whereas, the GEHC maintains a competent and
trained sales force for the
marketing and sales of such products and
services in the Territory.
Now therefore, the parties have agreed as
follows:
1
DEFINITIONS
As used in this Agreement the following
terms shall have the meaning given
below:
1.1 "Affiliate" means any company controlling, controlled by or under
common control with
the relevant party
where control means direct or
indirect ownership of
at least 50% of the voting stock or interest in
a company or control of the composition of the board of
directors.
1.2 "Appropriate Regulatory Authorities" means those governmental or
regulatory agencies
within the Territory,
which are responsible
for
(i) approving Products
before they can be sold commercially and ( ii)
regulating the
manufacturing,
packaging,
labelling,
marketing,
advertising,
storage, records
and reports and distribution of
Products.
1.3 "Confidential information" means any information, knowledge or
material of a
confidential or secret
nature of or concerning TGC or
GEHC or their respective activities, which shall include, but not
be
limited
to, information, knowledge or material:
(a) of a technical or
scientific
nature relating to or concerning
know-how, technical data, computer programs and systems,
designs,
databases, inventions,
manufacturing or
engineering
techniques
and procedures,
equipment,
materials,
product designs and
specifications, test
and quality assurance procedures, research
and research projects, and plans for future development;
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(b) of a business
nature such as
marketing plans, product plans,
business strategies,
costs, profits,
formulae, markets,
sales,
lists of customers and suppliers, distributors, agents,
consultants,
information concerning
or relating to any of its
employees, training methods and the like; or
(c) entrusted to TGC
or any of its
Affiliates by third
parties on a
confidential basis.
1.4 "Existing Arrangements" means the Product distribution and service
arrangements described on Schedule 1 hereto.
1.5 "Products" means the BioArchive
Platform products and
the Auto Xpress
Platform products as specified in Schedule 2 hereto, which are or
will
be manufactured
by TGC or its
Affiliates
during the term of this
Agreement. The term
"Products" shall also include all future products
developed by TGC that
evolve from these two product lines during the
term of this
Agreement.
Notwithstanding
anything else
contained in
this Agreement,
pricing
for any such future Products will be
determined by mutual agreement of TGC and GEHC.
1.6 "Territory" means the entire world, subject to the provisions of
Sections 2 and 11.1 below.
2
Representation
2.1 Subject to the terms and
conditions
hereinafter
set out, and TGC's
Existing Arrangements,
TGC appoints GEHC as its exclusive distributor
and service provider for the Products in the Territory;
provided that
the Territory
shall not include any market covered by an Existing
Arrangement until the
expiration
or termination of such Existing
Arrangement. Except as
otherwise provided in this Agreement, GEHC
shall purchase all
Products and
replacement Product
parts from TGC,
which Products and
replacement
Product parts shall thereafter be
resold by GEHC to its
customers. GEHC shall
maintain an inventory of
the Products and replacement Product parts in quantities sufficient
to
adequately service its customers.
2.2 GEHC shall market and sell the Products
under the TGC product
names
and trademarks
and service marks
described on Schedule
3 hereto and
may hold itself out only as the distributor and service provider for
the Products.
GEHC shall not use any brand names, trademarks or
service marks other
than as may be listed on Schedule 3 in connection
with the Products
without also
indicating in a clear and conspicuous
manner that the Products are manufactured by TGC. For the avoidance
of
doubt and by way of
example, GEHC
shall not market the AXP System
Product using any brand names, trademarks or service marks not
listed
on Schedule 3 unless
such Product
also contains the phrase "Auto
Xpress(TM) by ThermoGenesis".
2.3 The Territory shall be deemed to expand and
include any markets that
are covered by the Existing Arrangements as such arrangements
expire
or are terminated by either party according to their respective
terms.
For the avoidance of doubt, the parties agree and acknowledge that
TGC
shall not be required
to terminate
any such Existing Arrangements
other than in accordance with the terms of such arrangements.
2
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2.4 In
connection the services to be provided by GEHC:
(a) TGC shall use its
best efforts to cause replacement Product parts
to be delivered to GEHC or GEHC's customers, as directed by GEHC
without excessive
delay. GEHC shall be obliged to purchase
all
replacement Product parts from TGC. GEHC should have an option
to
source replacement Product parts from other third party
suppliers
who are not Affiliates of GEHC if negotiated prices are ^Removed
pursuant to Rule 24b-2 under the Securities Exchange Act of
1934^
or more above an alternative firm bid (which price is not met
by
TGC) or quality
standards do not meet
the component or
product
specification
defined in
TGC's technical files for such
replacement Product
parts; provided that
in such event TGC will
have no further indemnification obligations under this
Agreement
with respect to
Products which may include replacement parts
acquired from such
other suppliers.
TGC will supply order
lead
time for all system components to facilitate forecasting
efforts;
(b) GEHC may
integrate the Products with GEHC's service delivery
platforms provided that any such integrated Products comply with
(i)
TGC's QSR (Quality Systems Requisitions) procedures,
including engineering
change notices, and (ii) any Product
regulatory
certifications
then-issued by
all Appropriate
Regulatory
Authorities. Such
Product integrations
may include
integration of tools
for remote service delivery or design
modification of future
generations
of the Products to improve
serviceability;
(c)
subject to the terms of the Existing Arrangements, GEHC shall
have the exclusive
right and obligation to deliver training,
qualification, repair
and other services related to the Products
at commercial
terms in the
Territory with respect to Products
(subject to the next sentence), whether or not such Products
were
sold pursuant
to this Agreement; provided that GEHC shall be
entitled to collect any service payments made by customers for
services performed by
GEHC. For the avoidance of doubt, (i) GEHC
shall provide
warranty repair service for all Products and
replacement Product
parts sold up to one (1) year
prior to or
during the
term of this
Agreement;
provided that TGC shall
provide, at its cost,
any necessary
replacement
Product parts
free and GEHC shall provide, at its cost, any necessary labor
to
perform such
warranty repair service, and (ii) GEHC may sell
service contracts
for Products sold
prior to or during the term
of this Agreement,
provided that GEHC purchases replacement
Product parts for use in connection with such service contracts
pursuant to Section 2.4(a) above;
(d) subject
to the terms of the Existing Arrangements, TGC shall
forward to GEHC
inquiries or other
issues from
customers and
other third parties in the Territory which relate to the
Products
for handling. GEHC
shall promptly
respond to such
inquiries or
other issues and keep TGC advised of contacts with the customers
or potential customers and all developments resulting from these
contacts; and
(e) during the term of
this Agreement, GEHC
will have reasonable and
comprehensive access
to a BioArchive
System and may
acquire a
system for
use in service engineer training and related
activities.
3
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2.5 TGC shall have an option to
exclude GEHC's rights to sell the Products
for use in bone marrow
applications in
writing upon sixty
(60) days
notice in the event that either (i) GEHC notifies TGC that GEHC has
elected not
to market the Products for use in bone marrow
applications, or (ii)
GEHC is not actively marketing the Products for
use in bone marrow
applications
within two years of the Effective
Date.
2.6 In the event that GEHC intends to sell the Products into a country
that will require
modification of such
Products by TGC,
GEHC shall
provide written notice
of the required
modifications, along
with an
estimate of projected
sales, not less than
ninety (90) days prior to
the initiation of
marketing activities
into such country.
Provided
that the costs of the required modifications are reasonable in light
of the projected
revenues to be
received by TGC in
connection with
such sales,
TGC shall work with GEHC in an attempt to modify the
Products to comply with any such requirements within a reasonable
time
frame.
3
PURCHASE OF PRODUCTS AND PROJECTIONS
3.1 GEHC shall place orders with TGC
for its requirements
of the Products
in compliance
with the projections for the calendar quarter ended
December 31, 2005 and on quarterly basis for the year ended
December
31, 2006 attached as Schedule 4 hereto, and TGC shall deliver any
such
ordered Products
to GEHC or GEHC
customers,
as directed by GEHC,
within thirty
(30) days of receipt
of the order for the
BioArchive
System Products
and fifteen (15) days for the AXP System
Products
(once the AXP Product is validated and production thereof has
commenced). For
subsequent years, TGC
shall maintain these same lead
times provided the quantities ordered are within ^Removed
pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934^ of the
projected
orders for the
second, third and fourth quarters of the rolling
forecasts described in Section 3.3 below. In the event that TGC
cannot
deliver the quantity
ordered within such
lead times, then TGC
shall
notify GEHC thereof
writing three (3) working days and suggest an
alternate delivery schedule.
3.2 GEHC shall not remove or change
trademarks,
trade names, signs or
other marks on any Product or its packaging or make any alterations
in
the construction or design of any Product.
3.3 Before the end of October of each
calendar year during the term of
this Agreement
beginning in 2006,
GEHC and TGC shall
negotiate and
agree on revised quarterly projections for the sale of Products by
TGC
to GEHC for the coming
calendar year (together with the projections
described in
Section
3.1 above, the "Sales Projections").
Notwithstanding
anything else contained in this Agreement, the total
value of the Sales
Projections for each calendar year during the term
of this Agreement
shall not be less than
^Removed pursuant to Rule
24b-2 under the Securities Exchange Act of 1934^ of the total value
of
the Sales Projections during the previous calendar year.
4
DELIVERY AND TITLE
4.1 TGC shall deliver the Products and
replacement
Product parts to
GEHC
or GEHC's customers, as directed by GEHC, FOB, Rancho Cordova,
California.
4
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4.2 Risk in and title to the Products
and replacement
Product parts shall
pass to GEHC on delivery.
4.3 GEHC shall be responsible for:
(a) obtaining all
necessary importation
and exportation
licenses or
other permits for the Products and replacement Product parts;
(b)
making suitable
arrangements for the importation of the Products
and replacement
Product parts into countries other than the
United States;
(c) making
suitable shipping arrangements for the Products and
replacement Product parts from Rancho Cordova, California to the
customers' locations; and
(d) minimizing
the risk of any loss
in activity or
perishing of the
Products resulting
from importation
and inland
transportation
procedures.
4.4 During the period there are
Existing Arrangements outstanding, TGC
reserves the right to
allocate available
Products and replacement
Products parts in
times of shortages
by any method it, in its sole
discretion, deems fair
and appropriate,
provided that GEHC's minimum
purchase obligation shall be waived for as long as the shortage
lasts.
5
FEES, PRICES AND PAYMENT
5.1 In consideration of the rights to
distribute and service the Products
exclusively in the
Territory GEHC shall
pay to TGC a fee of ^Removed
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934^ in
three installments with
(a) Removed pursuant
to Rule 24b-2 under the Securities Exchange Act
of 1934^ to be paid on the date hereof;
(b) Removed pursuant
to Rule 24b-2 under the Securities Exchange Act
of 1934^ to be paid on or prior to 10th January, 2006; and
(c) Removed pursuant
to Rule 24b-2 under the Securities Exchange Act
of 1934^ to be paid on or prior to 10th January, 2007.
5.2 In addition to the foregoing, GEHC shall pay to TGC a technology
access fee of ^Removed
pursuant to Rule 24b-2
under the Securities
Exchange Act of 1934^ on or prior to 10th January, 2006.
5.3 In addition to the foregoing, GEHC shall purchase the Products and
replacement Product
parts from TGC for the purchase prices described
on Schedule 5 hereto,
provided that such prices may be adjusted by
mutual agreement
of TGC and GEHC as
needed with respect to
specific
customers. Such
purchase prices shall be discussed on an annual basis
and, if mutually agreed to by TGC and GEHC, shall be adjusted
annually
such that GEHC shall
resell such Products
and replacement Product
parts on the basis of an anticipated average gross margin of no
less
than ^Removed pursuant to Rule 24b-2 under the Securities Exchange
Act
of 1934^ averaged
across all of the
Territory and the
Products. In
case GEHC can produce records that show that such a margin is
unlikely
to be achieved based on the minimum purchase price offered by TGC,
TGC
5
<PAGE>
shall not charge a higher purchase price than the prior
year's prices
increased by the producer price index inflation rate only.
5.4 In the event that GEHC's
annual (or with
respect to the quarter ended
December 31, 2005,
quarterly) purchases of the Products should exceed
the applicable Sales Projections target by more than ^Removed
pursuant
to Rule 24b-2 under the Securities Exchange Act of 1934^,
GEHC will
pay TGC an additional
^Removed pursuant to Rule 24b-2 under the
Securities Exchange
Act of 1934^ of the TGC sale price to GEHC on the
excess sales.
Such amount
shall to be payable to
TGC on or prior to
the last day of each
January with respect
to the excess sales during
the previous calendar
year (or, with respect to the quarter
ended
December 31, 2005, quarter).
5.5 Payment for the Products and other charges shall be made in full in
United States
dollars ($) by GEHC to
TGC net of any Swedish or other
applicable withholding, sales, use or other taxes and
fees. GEHC will
be responsible for
paying all VAT and import fees, charges, tariffs
and assessments
attributed
to amounts
payable to TGC. GEHC shall
furnish TGC upon
request with duly obtained sales tax exemption
certificates to the
effect that all sales made to distributor by TGC
are for resale, and such other certificates, permits and documents as
TGC may request for tax purposes.
5.6 GEHC will make payment to TGC of all amounts due
pursuant to
Section
5.3 above within forty-five (45) days after delivery and receipt of
an
invoice. Invoices should be sent to the Accounts Payable Department
at
the address for GEHC set forth in Section 20.1 below.
5.7 In the event of a failure to make
any payment on the due
date agreed
hereunder interest
compounded
quarterly
shall be paid on the
outstanding balance at
the rate of three
percent (3%)
above three
month LIBOR for the
currency of payment
from the day next
following
the due date up until the day of payment. In the event of a failure
to
make any payment
within forty-five
(45) days of the due
date agreed
hereunder, TGC shall
have the option to terminate this Agreement at
any time thereafter upon sixty (60) days written notice to
GEHC.
5.8 GEHC agrees to (i) accurate and
uniform sales and
financial records
regarding the
Products, which
records shall be preserved during the
term of this Agreement
and for a period of
two (2) years
thereafter
and (ii) submit to TGC, from time to time as TGC may reasonably
request, complete and
accurate information
concerning the sales
and
service of the Products and the other activities of GEHC pursuant to
this Agreement.
In addition, at any time during the term of this
Agreement, but not
more frequent than once every calendar year, and
for a period of one (1) year thereafter, TGC shall have the right to
have GEHC's sales and
financial records
examined by an
independent
public accountant
reasonably acceptable
to GEHC for the sole purpose
of resolving a dispute
regarding GEHC's margins stated in Section 5.3
above, at the place
where GEHC
maintains such records and during
GEHC's usual
business hours, in order to verify the information
provided by GEHC pursuant to the preceding sentence.
6
GEHC S
