Exhibit 10.1

 

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS
BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY
DISCLOSED, AND THE EXCLUDED TERMS HAVE BEEN MARKED AT THE APPROPRIATE PLACE WITH
THREE ASTERISKS [***].

 

MANUFACTURING AND SUPPLY AGREEMENT

 

This Manufacturing and Supply Agreement (this “Agreement”) is entered into as of
November 11, 2020 (the “Execution Date”) by and between (1) Repro Med Systems,
Inc. d/b/a KORU Medical Systems having offices at 24 Carpenter Road, Chester, NY
10918 (“KORU”), and (2) Command Medical Products, Inc. having corporate offices
at 15 Signal Avenue, Ormond Beach, Florida 32174, U.S.A. (“Command”). KORU and
Command shall hereinafter be individually referred to as a “Party” and
collectively as the “Parties.”

 

RECITALS

A.

KORU is engaged in the research and development, manufacture, distribution, and
marketing of certain medical devices.

 

 

B.

Command is engaged in the contract manufacturing and sale of certain disposable
medical device products.

 

 

C.

KORU desires that Command manufacture and supply the Product (defined below) to
KORU.

 

 

D.

KORU and Command desire to enter into this Agreement governing the supply of the
Product to KORU under the conditions contained herein.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the covenants contained herein, the above
recitals, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Parties hereto agree as follows:

 

1.         DEFINITIONS

 

1.1       “Affiliate” of a Party shall mean any corporation or other business
entity controlling, controlled by, or under common control with such Party.

 

1.2       “Certificate of Conformance” or “COC” shall mean a document prepared
by Command containing at a minimum: Product name, Lot (defined below) number,
lot quantity and a statement indicating compliance to all Specifications. Each
COC shall be signature approved by Command’s Quality Assurance department.

 

1.3       “Control” (including “controlling”, “controlled by” and “under common
control with” of any party, corporation, or other business entity) shall mean
the direct or indirect ownership of at least fifty percent (50%) of the voting
or income interest in such party, corporation, or other business entity,
respectively.

 

1.4       “Current Good Manufacturing Practices” (abbreviated “GMPs” or “cGMPs”)
shall mean the standards established by the United States Food and Drug
Administration (the “FDA”) for current Good Manufacturing Practices, as
specified in FDA 21 C.F.R. §820 Quality Systems Regulations (or its successor
provisions; ISO 13485 Medical Devices – Quality Management Systems and other
sections so designated by the title “Good Manufacturing Practices”;  as
applicable to each respective Product to be manufactured and/or supplied by
Command.

 

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1.5       “Effective Date” shall mean the date of the first binding Purchase
Order under this Agreement.

1.6       “Execution Date” shall have the meaning first set forth above.

1.7       “Facilities” shall mean Command’s manufacturing facilities at 15
Signal Avenue, Ormond Beach, Florida 32174, U.S.A. and Kilómetro Carretera
Norte, Corporación de Zona Franca, Managua Edificios, Nicaragua 16 and 17.

1.8       “Lead Time” shall mean the time period that begins on the day Command
receives a Purchase Order (defined below) for Product from KORU and ends on the
day Command is required to ship the Product from Ormond Beach, Florida to KORU.

1.9       “Lot” shall mean a defined quantity of starting material, packaging
material or product processed in one process or series of processes so that it
could be expected to be homogeneous.

1.10     “NRE Agreement” shall mean that certain Non-Recurring Engineering
Agreement dated as of the Effective Date between the Parties.

1.11      “Product” shall mean the product(s) to be manufactured and supplied by
Command to KORU under Purchase Order(s) issued under this Agreement and as more
specifically detailed in Exhibit A attached hereto.

1.12     “Purchase Order” shall mean a written binding purchase order issued to
Command by KORU for the purchase of Product under this Agreement.

1.13      “Specifications” shall mean the Product specifications attached hereto
as Exhibit B.  The Specifications shall also include all necessary test
protocols, packaging and labeling specifications, bills of material and other
documentation required to describe, control, and assure the quality of the
manufacture of the Product, regardless of whether the foregoing is included as a
part of Exhibit B.

1.14     “Technology”  means all methods, processes, designs, data, software,
apparatus, devices, techniques, formulations, flow charts, block diagrams,
reports, systems, sketches, compositions of matter, discoveries and inventions
(whether or not patentable), works of authorship (whether or not copyrightable),
information, algorithms, procedures, notes, summaries, results and conclusions.

2.         TERM AND TERMINATION

2.1       Term.  This Agreement shall commence on the Execution Date; provided
that, prior to the Effective Date, if any, the Parties hereto shall have no
obligations pursuant to this Agreement except as set forth in Sections 9, 7.10
and 10.11.  This Agreement shall terminate on the fifth (5th) anniversary of the
Effective Date, unless earlier terminated as provided in Section 2.2 (the
“Expiration Date”).

2.2       Termination.

(a)       Either Party may terminate this Agreement without any early
termination fee prior to the Expiration Date (i) for material breach by the
other Party of this Agreement or the NRE Agreement upon written notice
specifying the nature of the breach, provided the breaching Party shall have
ninety (90) days to cure such breach for any breach that is curable, (ii) upon
written notice to the other Party if the other Party shall

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formally declare bankruptcy, insolvency, liquidation, or receivership; or shall
have instigated against it bankruptcy, insolvency, liquidation, or receivership
proceedings, and shall fail to remove itself from such proceedings within ten
(10) days from the date of institution of such proceedings, and (iii) as
expressly set forth elsewhere in this Agreement.  For the avoidance of doubt,
KORU may terminate this Agreement without any early termination fee upon notice
to Command in the event any of the completion dates set forth in Section 5 of
the NRE Agreement are not met as specified in Section 3.4 of the NRE Agreement.

(b)       In the event this Agreement is terminated for any reason, Command
shall continue performing any work reasonably requested by KORU for the orderly
close out of the affected Purchase Order(s) and for the fulfillment of
regulatory requirements.

(c)       Without limiting Command’s obligations under the NRE Agreement, within
[***] days following the termination of this Agreement, Command shall deliver to
KORU all data, materials, equipment and other property owned by KORU and/or
provided by KORU to Command for the manufacturing and supply activities under
the impacted Purchase Order(s).

(d)       Termination of this Agreement, for any reason, shall not release
either Party from liability which at said time has already incurred, nor affect
in any way the survival of any rights, duties or obligations of either Party
which are expressly stated elsewhere in this Agreement to survive termination.
 Without limiting the generality of the foregoing, the Parties agree that
Sections 2.2 and 3.2 and Articles 6, 7, 8, 9, and 10 shall survive termination
of this Agreement for any reason.

(e)       Termination of this Agreement prior to the Expiration Date by KORU for
any reason(s) other than as set forth in Section 2.2.(a), will result in an
early termination fee set forth below, which fee shall be as liquidated damages
and not as a penalty.

Contract Year

Early Termination Fee

Year 1

$[***]

Year 2

$[***]

Year 3

$[***]

(f)        Payment terms for this Section 2.2 are Net [***] days.

(g)       Termination of this Agreement, for whatever reason except for material
breach by the other Party, shall not affect the obligation of any Party to make
any payments for which that Party may be liable prior to such termination.

3.         MANUFACTURE AND SUPPLY OF PRODUCT

3.1       Performance Standards.  Command shall manufacture the Product in
accordance with the Specifications and this Agreement, and shall comply with all
applicable cGMPs and all other applicable Federal, state, local laws, standards,
requirements, and regulations (and their foreign counterparts) in connection
with the manufacture, testing, packaging, labeling, shipping, and handling of
the Product.

(a)       Command shall be responsible for normal and daily maintenance of all
consigned equipment provided by KORU. KORU will be responsible for all other
repair and/or replacement costs relating to consigned equipment, except to the
extent resulting from Command’s negligence. This equipment will be

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insured by KORU, while located in Command’s manufacturing plant(s).

3.2       Command Representations.  Command makes the following representations
to KORU:

(a)       Command is duly organized, validly existing and in good standing under
the laws of Florida.  Command has all requisite power and authority to own,
operate and lease its properties and to carry on its business as now conducted.
 Command has full corporate power and authority to execute, deliver and perform
this Agreement; all corporate actions of Command necessary for such execution,
delivery and performance have been duly taken; and this Agreement is a valid and
binding obligation of Command.

(b)       Command shall perform all manufacturing, storage, handling, and
testing of the Product(s) at the Facilities.  Command warrants that the
Facilities have been inspected by the FDA and/or any other required government
agency and are in good standing with said governmental agencies, are fully
compliant with cGMPs and that all employees working on the Product whose
responsibilities involve work, which must be performed under cGMP standards have
been properly trained in the requirements of those standards. Command
additionally warrants that the Facilities hold all necessary licenses and
permits from local, state, and federal, governmental authorities required for
the manufacture and testing of the Product and that all such licenses and
permits are in full force and effect.  Command is not aware of the existence of
any outstanding violations of any such licenses or permits and warrants that no
proceeding is pending or, to the knowledge of Command, threatened, seeking the
revocation or limitation of any such licenses or permits.

3.3       Suppliers.  Command shall use raw materials sourced only by those
suppliers approved in writing by KORU.  Command assumes the responsibility for
interacting with all raw material suppliers as required to deliver the Product
in accordance with the KORU applicable Purchase Order(s), including the
Specifications, and this Agreement.  Command shall not change its raw material
or packaging materials without the prior written consent of KORU, which may be
withheld in KORU’s sole discretion.

3.4       Intellectual Property.  KORU is the sole and exclusive owner of all
Technology relating to, concerning or incorporated in the Products, including
such Technology developed by Command, together with all molds (whether provided
by KORU or Command) and intellectual property relating thereto.  All
intellectual property which has arisen prior to the date of this Agreement or
arises hereafter as a result of work that Command performed or performs in
connection with the Products that is specific to the Products, including,
without limitation, conceptions, innovations, developments, processes,
formulations, improvements or methods, whether or not patentable or susceptible
to any other form of protection, shall be the sole and exclusive property of
KORU.  Command shall not take, omit to take or cause any action that is
inconsistent with or tends to diminish or impair KORU’s rights as set forth in
this Section 3.4, and Command agrees to assist in every proper and legal way to
obtain, maintain and protect KORU’s rights in such property in the United States
and all foreign countries.  Command hereby assigns, and agrees to assign, to
KORU all right, title and interest in the United States and all foreign
countries in and to KORU’s rights set forth in this Section 3.4, including any
and all patents, patent applications, copyright registrations, trade secrets,
rights under international treaties or any other protection available in any
country.

4.         PRICING AND PAYMENT

4.1       Product Prices.  Pricing for the Product ordered is set forth in
Exhibit A attached hereto.  Subsequent modifications to pricing shall be subject
to mutual agreement by the Parties and captured in a revised Exhibit A signed by
both Parties. Modifications to pricing may be related to but not limited to
changes in raw material pricing, production processes or design changes. Any
increase in pricing must be substantiated and presented in writing to KORU for
review and shall be subject to KORU’s written approval prior to implementation.
 Command shall make all reasonable efforts to incorporate any efficiency gains
and/or reduced

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raw material pricing and to reflect resulting price reductions negotiated in
good faith in an updated Exhibit A signed by both Parties.

4.2       Payment KORU.  Unless otherwise agreed to by Command in writing,
Command shall invoice KORU for Product ordered at the time of shipment and,
except for any amounts disputed by KORU in good faith, KORU shall pay each
invoice within [***] days of KORU’s receipt of Product Each invoice shall set
forth, in U.S. Dollars, the applicable price for the shipment properly
determined in accordance with the provisions of this Agreement and the
calculation thereof, as well as a reference to the Purchase Order, carrier name,
bill of lading number, tracking information, and any other information necessary
for identification and control of the shipment.  If KORU disputes any portion of
an invoice received from Command, then KORU shall so notify Command in writing
of the disputed amounts, and the Parties shall use good faith efforts to
reconcile the disputed amounts as soon as practicable.  Invoices should be sent
to the address as specified in writing by KORU in the applicable Purchase Order.
 KORU’s failure to dispute an invoiced amount shall not relieve Parties of any
obligations or warranties under this Agreement.

4.3       Cost Saving Methods.  Both KORU and Command shall meet, at a minimum
once annually, to review cost savings opportunities for the manufacture of the
Product.  All such cost saving efforts shall be agreed upon by the Parties in
writing prior to the commencement of any changes required to implement the
savings.  From the time the cost savings referenced in this Section 4.3 are
implemented to the termination of this Agreement, the cost savings shall be
allocated as agreed upon by the Parties depending upon origin of cost savings
method.

5.         FORECASTS, PURCHASE ORDERS AND DELIVERY

5.1       Forecasts.  Together with the blanket Purchase Orders referenced in
Section 5.2, KORU shall provide Command with a [***] month non-binding forecast
of the estimated quantities of Product believed to be required by KORU.

5.2       Purchase Orders.  KORU shall provide Command blanket Purchase Orders
for product demands with a minimum balance of [***] month demands to ensure raw
materials and capacity planning is in place to support demands. All Product
ordered by KORU shall be in the form of a firm written Purchase Order.  Each
Purchase Order shall contain at a minimum, the following information:
 description of the Product and quantity ordered, price, freight carrier
information, requested ship date, and Purchase Order number for billing
purposes.  Command shall accept or reject KORU’s Purchase Order in writing
within five (5) business days.   If otherwise compliant with the terms of this
Agreement, Purchase Orders may be rejected by Command only if the requested Lead
Time is less than [***] weeks from the date of the Purchase Order or if the
quantity of the Product ordered exceeds [***]% of the quantity set forth in the
forecast provided pursuant to Section 5.1.  At Command’s request, KORU shall
provide Command with such raw materials as reasonably necessary for Command to
meet the requested production delivery schedule in the first Purchase Order(s)
for bulk packed Products provided under this Agreement, the cost of which will
be credited to KORU on the invoice for such Purchase Order.  In the event
Command does not notify KORU of acceptance within five (5) business days after
receipt of such Purchase Order, the Purchase Order shall be deemed accepted by
Command.  Such accepted Purchase Order shall be binding, except that ship dates
may be moved ahead or back by mutual written agreement of Command and KORU.

5.3       Delivery.  Unless expressly provided otherwise in the applicable
Purchase Order, shipping to KORU for the Product shall be [***].  The Product
will be packaged and shipped non- sterile per the Specifications, and each
delivery shall be accompanied by COC with respect to the Product contained
therein. Title to such Product shall pass to KORU upon Command’s receipt of a
bill of lading from the carrier per the Specifications.  In the event that any
delivery of the Product is anticipated to be late, Command will promptly

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notify KORU Executive Team of the circumstances for the delay and propose a
revised ship plan.  Command will make all reasonable efforts to minimize the
delay. KORU is entitled to terminate this Agreement upon notice to Command
without any early termination fee in the case delivery within the reasonable
control of Command is delayed by more than [***] days.

6.         WARRANTIES

6.1       Product Warranty.  Command warrants that all Product supplied under
this Agreement shall, when it leaves Command’s possession and control, conform
with the Specifications and with all applicable laws and regulations, and shall
be free from defects in workmanship. Command further warrants that the Product
shall be manufactured in accordance with applicable cGMPs and with all
applicable laws and regulations.

6.2       Acceptance, Rejection, and Claims.  KORU may inspect any or all
shipments of Product for proper labeling, packaging and count within [***] days
of KORU’s receipt of each shipment; however, any such inspection shall not
relieve Command of any obligations or warranties under this Agreement.  KORU has
the right to reject, via written notification to Command within this [***] day
period, any or all of a shipment of Product that fails to satisfy any warranty
in this Agreement and may reject all of a given Lot of Product if a statistical
sample does not meet the Specifications.  Upon confirmation of defective
condition by Command, KORU shall be entitled to the immediate replacement, free
of charge (including shipping charges), of any Product supplied by Command in
breach of any warranty under this Agreement.

6.3       Spoilage Due to Change or Obsolescence. KORU shall not be liable to
Command for any printed packaging components, work in progress or finished
Product which is damaged, destroyed or which become obsolete or otherwise
spoiled and cannot be sold or distributed, other than due to the acts or
omissions of KORU. KORU shall be liable to Command for any printed packaging
components, purchased raw materials, work in progress or finished Product which
becomes obsolete as a result of a specification or drawing change.

6.4       Third Party Claims.  Command represents and warrants that it has, and
will have during the term of this Agreement, all rights necessary for the
manufacture of Product, without interfering with or infringing upon any patents,
copyrights, trademarks, or other intellectual property rights of any third
party.

7.         REGULATORY AND QUALITY

7.1       Compliance.  Command agrees that its work under this Agreement will be
conducted in compliance with all applicable laws, rules and regulations, and
with the standard of care customary in the industry.  If requested by KORU,
Command shall provide KORU with a certificate evidencing its accreditation by
the appropriate accrediting body.  Such accreditation shall remain in force
during the term of this Agreement.  Command agrees that all Product shipments to
KORU shall be in accordance with KORU’s instructions and all applicable laws and
regulations governing the shipment, labeling, and packaging of the Product.

7.2       Product Complaints/Reports.  Except as otherwise noted below, in the
event that Command receives any complaint, claim or adverse reaction report
regarding any Product, including, but not limited to, notices from the FDA
regarding any regulatory non-compliance of Product, Command shall provide KORU
with all information contained in such complaint, report, or notice and such
additional information regarding the Product as may be reasonably requested.
 Command shall comply with FDA requirements for complaint handling.  If Product
contains a defect which could or did cause death or serious bodily injury,
Command shall immediately provide KORU with a complete description of all
relevant details known to Command concerning any such incident, including but
not limited to, a description of any defect and such other information which may
be necessary to report the incident to the FDA or any other Ministry of Health.
KORU is responsible for filing any/all MDR Reports as required by the FDA.

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7.3       Recalls.  KORU shall have the right to reasonably declare any recall
of, or field corrective action to, any Product supplied to KORU under this
Agreement.  Command agrees to cooperate with KORU in connection with any such
recall. Command shall bear rework and/or replacement expenses (including
shipping charges for returned and replacements) of Product(s) associated with
the recall if non-conformity was a result of Command’s non-compliant workmanship
to the product Specifications.

7.4       Government Inquiries.  Without limiting the generality of Section 7.2,
Command shall use its best efforts to:

(a)       Respond fully and accurately to all inquiries directed to it by the
FDA or any government agency with respect to the manufacture and testing of the
Product.

(b)       Assist KORU in responding to inquiries directed to KORU by the FDA or
any government agency with respect to the manufacture and testing of the
Product.

(c)       Promptly inform KORU of the existence and substance of any inquiry,
investigation or inspection initiated by the FDA or any government agency,
department or body relating to the Product or its manufacture.  The existence of
any such inquiry, investigation or inspection shall not alone constitute a
breach of this Agreement or excuse any performance due under this Agreement,
except as set forth in Section 7.6.  Command shall immediately provide KORU with
copies of any and all inspection reports, letters, documents or similar
instruments submitted or received from the FDA or other government agency
related to the Product or its manufacture, testing or use.

7.5       Inspection of Manufacturing Facilities.

(a)       Command shall permit KORU and its agents, during business hours and
upon notice to Command, to inspect the Facilities where the Product is
manufactured, handled, stored or tested, as well as all processes relating to
the manufacture, handling, storage, or testing of the Product, as well as all
test records regarding the Product.

(b)       Command shall extend the same inspection privileges set forth above to
agents of the FDA as required, and shall promptly notify KORU of any such
inspection.  Command shall provide KORU with copies of any and all inspection
reports from the FDA regarding that specifically detail any non-conformance
relating to the manufacture of the Product within [***] working days of receipt
of such reports.

7.6       Command warrants and agrees that it will correct within a reasonable
amount of time from the date of notification, all deficiencies and/or
non-conformances found during a KORU or FDA audit at its own expense.  For the
avoidance of doubt, failure by Command to adequately respond and satisfactorily
close out an FDA “warning letter” shall constitute a material breach of this
agreement.

7.7        Control Testing.  Command shall perform quality control testing in
accordance with the Specifications for release of each Lot of Product to KORU.
 Quality control testing shall include testing associated with the production of
the Product, including, but not limited to, incoming component and raw material
testing, in process testing, and final release testing as agreed upon between
KORU and Command.  

7.8       Specifications and Change Control.

(a)       The Specifications may not be changed without prior written approval
by KORU.

(b)       Command shall not make any changes to any validated manufacturing
process, Facilities, or equipment used in the manufacture that affects the form,
fit or function of the Product without KORU’s prior

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written approval, which may be withheld in KORU’s sole discretion.

(c)       KORU shall use commercially reasonable efforts to provide Command with
sufficient written notice of any instructions or requirements of a government
regulatory agency that may require a change of the Specifications.  Command
shall immediately notify KORU if any such changes in the Specifications shall
render Command unable to supply the Product in accordance with the term and
conditions of this Agreement.

7.9       Technical Assistance.  Command shall provide KORU with certain
technical support regarding the Product as reasonably requested by KORU,
including, but not limited to, analytical test methods, manufacturing process
development, and validation support. Command may assess charges for such
requests and will provide a formal written quote prior to execution of requested
tasks for approval by KORU.

7.10     Quality Agreement.  Within 30 days following the Execution Date,
Command and KORU shall review and update as necessary to reflect the Products,
the existing written Quality Agreement between the Parties (the “Quality
Agreement”).  Upon review and update, the Quality Agreement shall be executed by
the Parties and attached hereto as Exhibit C and shall be incorporated herein.
 The Quality Agreement may be updated from time to time upon the mutual written
agreement of the Parties.  

8.         INDEMNIFICATION, LIMITATION OF LIABILITY AND INSURANCE

8.1       Indemnification by KORU.  KORU agrees to indemnify, defend and hold
harmless Command, its officers, agents, and employees from any and all
liability, loss (including reasonable attorneys’ fees) or damage they may suffer
as the result of claims, demands, costs or judgments against them arising out of
the negligence, recklessness or willful misconduct on the part of KORU, its
officers, agents, employees, contractors or consultants in connection with this
Agreement.

8.2       Indemnification by Command.  Command agrees to indemnify, defend and
hold harmless KORU, its officers, agents, and employees from any and all
liability, loss (including reasonable attorneys’ fees), or damage they may
suffer as the result of claims, demands, costs or judgments against them arising
out of:

(a)       a failure by Command, its officers, agents, employees, contractors or
consultants to adhere to this Agreement or the KORU Purchase Order received from
KORU;

(b)       negligence, recklessness or willful misconduct on the part of Command,
its officers, agents, employees, contractors or consultants; or

(c)       a breach of any applicable Federal, state or local law or of this
Agreement by Command, its officers, agents, employees, contractors or
consultants.

8.3       General Conditions of Indemnification.  Each Party’s agreement to
indemnify, defend and hold the other harmless is conditioned on the indemnified
Party (i) providing written notice to the indemnifying Party of any claim,
demand or action arising out of the indemnified activities within thirty (30)
days after the indemnified Party has knowledge of such claim, demand or action;
(ii) permitting the indemnifying Party to assume full responsibility to
investigate, prepare for and defend against any such claim or demand; (iii)
assisting the indemnifying Party, at the indemnifying Party’s reasonable
expense, in the investigation of, preparation for and defense of any such claim
or demand; and (iv) not compromising or settling such claim or demand without
the indemnifying Party’s written consent; provided, however, that the failure of
the indemnified Party to undertake any of the foregoing actions shall not
relieve the indemnifying Party of any obligation it may have under this Article
8, except to the extent that the indemnifying Party’s ability to fulfill such
obligation has been materially prejudiced thereby.

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8.4       Limitation of Liability.  EXCEPT FOR BREACHES OR VIOLATIONS OF ARTICLE
9, OR INDEMNITY LIABILITIES ARISING UNDER THIS ARTICLE 8, OR CASES OF GROSS
NEGLIGENCE, MATERIAL BREACH OR WILLFUL MISCONDUCT, IN NO EVENT SHALL EITHER
PARTY BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL,
INCIDENTAL OR PUNITIVE DAMAGES INCLUDING LOSS OF USE, REVENUES OR PROFITS,
INTERRUPTION OF BUSINESS OR CLAIMS AGAINST EITHER PARTY OR ITS CUSTOMERS BY ANY
THIRD PARTY, WHETHER SUCH CLAIM IS BASED IN CONTRACT, TORT (INCLUDING
NEGLIGENCE), STRICT LIABILITY OR OTHERWISE, EVEN IF THE PARTY IS ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.

8.5       Insurance.  Command, at its sole cost and expense, will maintain
appropriate insurance including, but not limited to, Commercial General
Liability Insurance with Broad Form Contractual Liability; premises, operations
coverage including products and completed operations  and Personal
Injury/Property Damage Coverage, with limits of not less than $[***] per
occurrence.  A Certificate of Insurance indicating such coverage will be
delivered to KORU upon request.  The Certificate will (a) indicate that the
policy will not change or terminate without at least fifteen (15) days prior
written notice to KORU, (b) KORU shall be listed as an additional insured on the
commercial general liability policy.

9.         CONFIDENTIALITY AND NON-COMPETITION

9.1       Confidential Information.  For purposes of this Agreement,
“Confidential Information” shall mean all information (i) identified in written
or oral format by the disclosing Party as confidential, trade secret or
proprietary information and, if disclosed orally, summarized in written format
within thirty (30) days of disclosure, or (ii) the receiving Party knows or
should reasonably be expected to know is confidential, trade secret or
proprietary information of the disclosing Party, including but not limited to
the Specifications and information set forth on Exhibits A and A-1.
 Notwithstanding the foregoing, “Confidential Information” shall not include any
information which the receiving Party can show: (i) is now or subsequently
becomes legally and publicly available without breach of this Agreement by the
receiving Party, (ii) was rightfully in the possession of the receiving Party
without any obligation of confidentiality prior to receiving it from the
disclosing Party, (iii) was rightfully obtained by the receiving Party from a
source other than the disclosing Party without any obligation of
confidentiality, (iv) was developed by or for the receiving Party independently
and without reference to such information as shown by documentary evidence, or
(v) is required to be disclosed by applicable law (including but not limited to
securities laws applicable to public companies).

9.2       Nondisclosure.  Each Party agrees not to use the Confidential
Information of the other Party for any purpose, including trading in the
financial instruments of the other Party, except in its performance under this
Agreement.  In addition, the receiving Party shall treat and protect such
Confidential Information in the same manner as it treats its own information of
like character, but with not less than reasonable care.  The receiving Party
agrees to take appropriate measures by instruction and/or written agreement
prior to disclosure of Confidential Information to its employees and contractors
to prevent unauthorized use or disclosure, and shall be responsible for any such
unauthorized use or disclosure by its employees and contractors.  Confidential
Information may be disclosed to the extent necessary to comply with an order of
an administrative agency or court of competent jurisdiction provided, however,
that the Party so required to disclose Confidential Information shall provide
prior written notice thereof to the other Party in sufficient time to enable
that Party to seek a protective order or otherwise prevent such disclosure.  The
receiving Party’s confidentiality obligations under this Article 9 shall survive
the termination of this Agreement and shall remain binding on the Parties hereto
until the Confidential Information falls within one of the exceptions stated in
Section 9.1. Previously executed non-disclosure agreements between the Parties
will remain in effect in conjunction with the Agreement until the termination
dates specified in those agreements. Disclosure of Confidential Information
under this Agreement will create no license, right, interest, or ownership in
any such information in a receiving

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Party.

9.3       Injunctive Relief.  In the event of a breach of any of the foregoing
provisions, the receiving Party agrees that the harm suffered by the disclosing
Party would not be compensable by monetary damages alone and, accordingly, that
the disclosing Party shall, in addition to other available legal or equitable
remedies, be entitled to an injunction against any unauthorized use or
disclosure of its Confidential Information.

9.4       Return of Confidential Information.  Upon the termination of this
Agreement, or at any time the disclosing Party so requests, the receiving Party
shall return to the disclosing Party any written, printed or other materials
embodying the disclosing Party’s Confidential Information, including all copies
or excerpts thereof, or shall destroy such information pursuant to the
disclosing Party’s request.

9.5       Export Controls.  Command hereby acknowledges and agrees that all of
KORU’s Confidential Information, including materials, disclosed hereunder is
subject to United States export controls, under the export administration
regulations, 15 C.F.R. parts 730-774.  Command shall strictly comply with all
such United States export controls applicable to KORU’s Confidential Information
or materials, and, without limiting the generality of this Article 9, Command
shall not (i) utilize any of such Confidential Information or materials for any
purpose whatsoever, except as specifically authorized in this Agreement; or (ii)
export, transfer, divert or disclose any of such Confidential Information or
materials. Koru is responsible for supporting Command with necessary Product
details and classifications to support Import/Export of devices between
Facilities.

9.6       Non-Competition.  From and after the Execution Date through the
expiration or earlier termination of this Agreement, Command shall not accept a
new sizeable customer without KORU’s written consent to develop, manufacture,
supply, distribute or market any subcutaneous mechanical pump delivery system or
products that directly compete with KORU’s Products covered in this Agreement.
For the avoidance of doubt, sizable is defined as equal to or more than [***]%
of Command’s annual sales revenues.  Command shall not use any equipment or
other materials provided by KORU for such competitor.

10.       GENERAL PROVISIONS

10.1     Export Control.  Command shall comply with all applicable export and
import control laws and regulations.

10.2     Integration / Modification.  This Agreement, together with all Exhibits
attached hereto, and Purchase Orders issued hereunder, the Business Continuity
Plan and the NRE Agreement (together, the “Ancillary Documents”), contain the
entire understandings of the Parties with respect to the subject matter herein,
and supersedes all prior and contemporaneous agreements (other than any
confidential disclosure agreement entered into between the Parties) and
communications, whether oral, written or otherwise, concerning any and all
matters contained herein.  In the event of a conflict between this Agreement and
any Ancillary Document, the terms of this Agreement shall prevail.

10.3     Relationship Between the Parties.  In fulfilling its obligations
pursuant to this Agreement, each Party shall be acting as an independent
contractor.  Neither Party is granted any right or authority to assume or to
create any obligation or responsibility, express or implied, on behalf of or in
the name of the other Party.

10.4     Assignment:  This Agreement is binding upon and inures to the benefit
of the Parties to it, and to their successors and assigns.  Neither Party shall
have the right to assign or subcontract this Agreement or any of its rights or
obligations hereunder without the prior written consent of the other Party;
provided, however, that KORU shall have the right to assign this Agreement to
any Affiliate.

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10.5     Non-Waiver.  The failure of a Party to insist upon strict performance
of any provision of this Agreement or to exercise any right arising out of this
Agreement shall neither impair that provision or right nor constitute a waiver
of that provision or right, in whole or in part, in that instance or in any
other instance.

10.6     No Third-Party Beneficiaries.  This Agreement is neither expressly nor
impliedly made for the benefit of any party other than those executing it.

10.7     Severability.  If, for any reason, any part of this Agreement or any
Purchase Order is adjudicated invalid, unenforceable or illegal by a court of
competent jurisdiction, such provision will be changed and interpreted to
accomplish the objectives of such provision to the greatest extent possible
under applicable law and the remaining provisions of this Agreement or Purchase
Order (as the case may be) will continue in full force and effect.

10.8     Notices.  Any notice to be given under this Agreement must be in
writing and delivered either in person, by (i) any method of mail (postage
prepaid) requiring return receipt, or by overnight courier, or (ii) by email, in
each case to the Party to be notified at its address(es) given below, or at any
address such Party has previously designated by prior written notice to the
other.  Notice shall be presumptively deemed to be sufficiently given for all
purposes upon the earlier of:  (x) in the case of mail or overnight courier, (a)
the date of actual receipt; (b) if mailed, three (3) calendar days after the
date of postmark; or (c) if delivered by overnight courier, the next business
day the overnight courier regularly makes deliveries.  

If to Command:

Command Medical Products, Inc.

15 Signal Ave

Ormond Beach, FL 32174

Attention:  Jim Carnall

Email: [***]

If to KORU:

Repro Med Systems, Inc. d/b/a KORU Medical Systems

24 Carpenter Road

Chester, NY 10918

Attention:  Chief Financial Officer

Email: [***]

10.9     Legal Fees.  The prevailing Party in any litigation between the Parties
relating to this Agreement will be entitled to recover its reasonable attorneys’
fees and court costs, in addition to any other relief that it may be awarded.

10.10   Governing Law and Venue. Notwithstanding its place of execution or
performance, this Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, USA, irrespective of its laws regarding
choice or conflict of laws.  Prior to filing a lawsuit, the Parties agree to
attempt to resolve the dispute in good faith through discussions among their
respective executives within sixty (60) days following notice of the dispute by
one Party to the other. Any dispute arising under or relating to this Agreement
that is not resolved through such discussions shall be submitted for resolution
to a state or federal court of competent jurisdiction in Delaware, USA, and the
Parties hereby agree to submit to the jurisdiction and venue of such court.

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10.11   Crisis Management and Business Continuity Planning.  Throughout the term
of this Agreement, Command will maintain and follow a written disaster recovery
plan (the “KORU’s Business Continuity Plan”) in order to ensure the supply of
Products and Services to KORU in the event of a business disruption including
but not limited to: hurricanes, tornadoes, flooding, pandemic and facility
downtime. An outline of all material terms of KORU’s Business Continuity Plan
shall be attached as Exhibit D to this Agreement and incorporated herein.  A
final copy of the KORU’s Business Continuity Plan detailing the terms of the
outline and addressing customary business continuity plan elements as set forth
in Exhibit E will be submitted to KORU within thirty (30) days after the
Execution Date of this Agreement. An annual review of this plan may be
incorporated into scheduled Business Reviews as desired by either Party.  For
the avoidance of doubt, failure to comply with the Business Continuity Plan
shall constitute a material breach of this Agreement.

10.12   Interpretation.

(a)       Captions & Headings.  The captions and headings of clauses contained
in this Agreement preceding the text of the articles, sections, subsections and
paragraphs hereof are inserted solely for convenience and ease of reference and
shall not constitute any part of this Agreement, or have any effect on its
interpretation or construction.

(b)       Capitalized Terms.  Capitalized terms not specifically outlined in
Article 1 shall have the respective meanings ascribed to them in this Agreement.

(c)       Singular & Plural.  All references in this Agreement to the singular
shall include the plural where applicable, and all references to gender shall
include both genders and the neuter.

(d)       Articles, Sections & Subsections.  Unless otherwise specified,
references in this Agreement to any article shall include all sections,
subsections, and paragraphs in such article; references in this Agreement to any
section shall include all subsections and paragraphs in such sections; and
references in this Agreement to any subsection shall include all paragraphs in
such subsection.

(e)       Days.  All references to days in this Agreement shall mean calendar
days, unless otherwise specified.

(f)       Ambiguities.  Ambiguities and uncertainties in this Agreement, if any,
shall not be interpreted against either Party, irrespective of which Party may
be deemed to have caused the ambiguity or uncertainty to exist.

10.13   Counterparts; Facsimile and Electronic Signatures. This Agreement may be
executed by exchange of signature pages by facsimile and/or or other “electronic
signature” (as defined in the Electronic Signatures in Global and National
Commerce Act of 2000) in a manner agreed upon by the Parties hereto; and/or in
any number of counterparts, each of which shall be an original as against any
Party whose signature appears thereon and all of which together shall constitute
one and the same instrument.

10.14   No Drafter.  Neither Party shall be deemed to be the drafter of this
Agreement, or of any particular provision or provisions, and no part of this
Agreement shall be construed against a Party on the basis that the particular
Party is the drafter of any part of this Agreement.

10.15   Further Assurances.  Each Party to this Agreement shall, at its own
expense, furnish, execute, and deliver all documents and take all actions as may
reasonably be required to effect the purposes of this Agreement.

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
Execution Date.

Repro Med Systems, Inc.

Command Medical Products, Inc.

 

 

d/b/a KORU Medical Systems

 

 

 

By: /s/ Karen Fisher

By: /s/ James D. Carnall

 

 

Name: Karen Fisher

Name: James D. Carnall

 

 

Title: Chief Financial Officer

Title: President & COO

- 13 -

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EXHIBIT A

Page 1 of 2

KORU PRODUCT PRICING – BULK PACKED

KORU Product

Bulk Price

[***]

[***]

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EXHIBIT A

Page 2 of 2

KORU PRODUCT PRICING – FINAL PACKED

Non-Sterile Finished Good Pricing

KORU Product

Year 1 Qty

Year 1

Year 2

Year 3

Year 4 and 5

[***]

[***]

[***]

[***]

[***]

[***]

 

 

 

 

 

 

 

 

 

 

 

 

Contract Pricing Details:

•

Pricing shall be subject to increase in the event raw material pricing exceeds
costs outlined on attached matrix Exhibit A-1.

 

 

•

If the aggregate dollar amount of Purchase Orders placed in Year 1 is less than
$[***], Command reserves the right to assess a price penalty of [***]% increase
on piece price for units shipped in that year.

 

 

•

Years 2, 3, 4&5 prices set forth above are based on [***]% year over year
increases in the aggregate dollar amount of Purchase Orders.  If such [***]%
year over year increase in not met, Command reserves the right to prior year
tier pricing.

 

 

•

Year 1 means from the Effective Date to the first anniversary of the Effective
Date; Year 2 means from the first anniversary of the Effective Date to the
second anniversary of the Effective Date; etc.

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EXHIBIT A-1

KORU RAW

KORU Product

Costed Raw Material BOM

[***]

[***]

 

 

RAW Pricing Details:

•

Pricing does not reflect [***]% cost reduction for new KORU [***].

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

EXHIBIT B

PRODUCT SPECIFICATIONS MATRIX

(ATTACHED HERETO)

[***]

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

EXHIBIT C

QUALITY AGREEMENT

(TO BE ATTACHED)

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EXHIBIT D

BUSINESS CONTINUITY PLAN - OUTLINE

Command Medical Products, Inc. & KORU

[command_medical-logo.jpg]

 

The purpose of this document is to provide an outline for the specific risk
management approach for
sustaining/reinstating operations of KORU’s manufacturing lines located at
Command Medical Products Nicaragua
manufacturing facility in the event of a business interruption.  As contemplated
by the Manufacturing and Supply
Agreement to which this document is attached as an exhibit (MSA), a detailed
final Business Continuity Plan
materially consistent with this document will be established by both Command and
KORU.

 

 

 

Command Medical – Florida

15 Signal Avenue, Ormond Beach, FL

32174 U.S.A

Phone: 386-672-8116

 

Kilometro 12.5 Carretera Norte

Corporacion de Zona Franca,

Edificio 16 Managua, Nicaragua

Phone: [***]

 

 

 

Command will maintain [***] months of raw materials on-hand and a [***]-month
minimum of finished devices on-hand at
Command’s [***] facility.

 

KORU will maintain [***] months of finished devices at KORU’s warehouse(s).

 

Based on the above, this strategy provides [***] months of finished devices
inventory stock to draw from during a business
interruption without impact to supply chain.

 

The finished devices and raw material inventory levels in the Business
Continuity Plan will be reviewed periodically and
adjusted based on mutual agreement between KORU and Command; if necessary, to
mitigate perceived risks.

 

Raw Material

 

●

Subject to the requirements set forth above, raw material inventory may be
maintained in two sites (US and Nicaragua)
at varying levels depending on environmental conditions. Material concentration
may be shifted or adjusted based on
order surges, suspected risk and/or impending obsolescence as agreed to by both
parties.

 

Finished Devices

 

●

Command will maintain designated stock of finished devices products in their US
[***] warehouse and all orders will be
fulfilled from that facility and replenished with production units manufactured
in Nicaragua.  This inventory will
supplement any on -hand inventory maintained at KORU.

 

Second Site Manufacturing

 

●

In the event of a significant business interruption in Command’s Nicaragua
facility not within the reasonable control of
Command that necessitates cease of manufacturing for at least [***] months, and
if requested by KORU, manufacturing
of KORU’s Products will promptly be transferred from Nicaragua to Command’s
[***] facility to ensure supply chain is
intact and KORU’s inventory is replenished.  Upon any such transfer, (i) pricing
for Products shall be as set forth on
Schedule I to this document in lieu of as set forth on Exhibit A to the MSA, and
(ii) KORU may terminate the MSA
thereafter without early termination penalty.

 

 

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BUSINESS CONTINUITY PLAN - OUTLINE

Command Medical Products, Inc. & KORU

[command_medical-logo.jpg]

SCHEDULE 1

KORU PRODUCT PRICING – FINAL PACKED @ [***]

KORU Product

Unit Price

[***]

[***]

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EXHIBIT E

BUSINESS CONTINUITY PLAN ELEMENTS

1.   Risk Assessment

2.   Business Impact Analysis (BIA)

3.   Business Continuity Plan

a.   Initial Response

b.   Relocation

c.   Recovery

d.   Restoration

4.   Strategy and Plan Development

a.   Purpose and Scope

b.   Goals and Objectives

c.   Assumptions

d.   Key Roles and Responsibilities

e.   Business Impact Analysis (BIA) Results

f.   Risk Mitigation Plans

g.   Business Recovery (BR) & Continuity Strategies

5.   Plan Testing & Maintenance

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