Exhibit 10.2
PRIVATE LABEL DISTRIBUTION AGREEMENT
     This PRIVATE LABEL DISTRIBUTION AGREEMENT (“Agreement”) is made effective
this 17th day of May, 2006 (the “Effective Date”) between ROCHESTER MEDICAL
CORPORATION, a Minnesota corporation, on behalf of itself and its subsidiaries
(herein, “RMC”) with offices at One Rochester Medical Drive, Stewartville, MN
55976 and COLOPLAST A/S., a Denmark corporation, on behalf of itself and its
subsidiaries (herein, “COLOPLAST”), with offices at Egevangen 4 2980 Kokkedal,
Denmark.
RECITALS:
     WHEREAS, RMC manufactures a patented all silicone male external catheter
(the “MEC”) in various configurations as more particularly described in this
Agreement.
     WHEREAS, COLOPLAST markets throughout the world a wide variety of urologic
products and accessories.
     WHEREAS, COLOPLAST desires to acquire from RMC, and RMC is agreeable to
granting to COLOPLAST the non-exclusive right to market the MEC throughout the
world, with the exception of the United Kingdom (“UK”), under COLOPLAST’S own
brands and marks upon the terms and conditions, including annual minimum
purchase requirements, as set forth in this Agreement.
     WHEREAS, COLOPLAST also desires to acquire from RMC, and RMC is also
agreeable to granting to COLOPLAST, a first right of negotiation with respect to
future improvements to the MEC in accordance with the provisions of this
Agreement.
          WHEREAS, COLOPLAST intends to acquire from another company
(herein“ADAM”) an additional line of urology products (the “Acquisition”);
     WHEREAS, COLOPLAST and RMC also contemplate the sale by COLOPLAST to RMC or
an affiliate of certain business and assets related to the sale and distribution
of the MEC assets that Coloplast will acquire in the Acquisition in the UK (the
“Divestiture”) in accordance with the directives of the UK Office of Fair Trade;
     WHEREAS, ADAM and RMC are parties to a certain Male External Catheter
License, Sales and Distribution Agreement as amended by a Settlement Agreement
and as further amended by a Supply Agreement (collectively the “MEC Agreement”],

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whereby RMC granted ADAM a certain Patent License and a certain Technology
licenses (collectively, the “Manufacturing Licenses”) more specifically
described in the MEC Agreement, all of which relate to products that are the
subject of this Agreement.
     WHEREAS. ADAM utilizes the Manufacturing Licenses for the manufacture of
all silicone male external catheters at its manufacturing facilities located at
800 Lund Boulevard, Anoka, Minnesota (the “Adam Plant”).
     WHEREAS, RMC contemplates entering into a further agreement with ADAM
concurrently with the RMC’s execution of this Agreement (the “Reconveyance”)
whereby ADAM will (i) reconvey and release to RMC all of Adam’s right, title and
interest in and to the Manufacturing Licenses, (ii) convey and assign to RMC all
of ADAM’s right, title and interest in and to the intellectual property
including specifically, but without limitation, all patent rights and trade
secrets relating to the Manufacturing Licenses, (iii) terminate the MEC
Agreement, (iv) sell or lease all or a portion of the Adam Plant, including
equipment and fixtures, to RMC and (v) deliver to RMC all documentation relating
to silicone male external catheters that ADAM has or maintains for manufacturing
pursuant to the Manufacturing Licenses, along with the relevant regulatory
compliance documents, together with all relevant packaging inventory solely
related to the Manufacturing Licenses located at the Adam Plant.
     WHEREAS, the execution, delivery and consummation of the transactions
contemplated by the Divestiture, the Acquisition and the Reconveyance are each a
necessary condition subsequent to this Agreement.
     WHEREAS, RMC’s ability to supply to COLOPLAST certain configurations of
MECs depends upon RMC’s acquisition from ADAM pursuant to the Reconveyance and
the subsequent relocation of certain equipment located at the Adam Plant and
COLOPLAST’s need for RMC’s supply of MEC products pursuant to this Agreement
depends on the consummation of the Acquisition and Divestiture; and that
therefore the parties desire to provide that the Acquisition, Divestiture and
Reconveyance all become effective prior to the date that RMC becomes obligated
to supply, and COLOPLAST becomes obligated to purchase MECs pursuant to this
Agreement (“Conditions Precedent”).
     WHEREAS, COLOPLAST and RMC desire to acknowledge for avoidance of doubt
that COLOPLAST manufactures, by a process different from RMC’s patented process,
and sells an all silicone male external catheter under the brand name “Conveen
Optima”™; that all references in this Agreement to silicone male external
catheters are intended, to refer to RMC’s male external catheter products and
not to the Conveen

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Optima male external catheter products; and that nothing herein is intended to
limit or restrict COLOPLAST’s freedom to market and sell its Conveen Optima male
external catheter products except as may be otherwise limited by RMC’s rights
under its US Patents described in §7.6.1 hereof by law or otherwise by
enforceable agreement between the Parties.
     NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual promises and consideration provided herein, the parties, intending to be
legally bound hereby, agree as follows:
Section 1 DEFINITIONS:
     Except as otherwise elaborated in this Section 1, the definitions set forth
in the Recitals to this Agreement have the meanings there ascribed to them. In
addition to such definitions, the following words and expressions shall have the
meanings set forth in this Section:
     1.1. Confidential Information. “Confidential Information” means
“Confidential Information” as defined in the Disclosure Agreement, and also
includes all information of a confidential or proprietary nature disclosed by
RMC to COLOPLAST or by COLOPLAST to RMC pursuant to or in connection with this
Agreement or the Disclosure Agreement, and includes information regarding
COLOPLAST’s purchases or sales of, including units, amounts and prices.
     1.2. Delivery Instructions. “Delivery Instructions” mean the instructions
described in §4.5 hereof for delivery of each Order and other purchase orders as
may be made from time to time.
     1.3. Direct Production Costs. “Direct Production Costs” mean the actual
costs paid by RMC for the materials and direct labor used to manufacture MEC.
     1.4. Disclosure Agreement. “Disclosure Agreement” means the Disclosure
Agreement dated November 13, 2001, entered into between RMC and COLOPLAST
     1.5. Effective Date. “Effective Date” means the Effective Date set forth
above in the first paragraph of this Agreement, or as otherwise defined by §
3.1.
     1.6. Extenuating Circumstance. “Extenuating Circumstance” means an event of
force majeure as set forth in §14.3 of this Agreement or any excused failure by
RMC or COLOPLAST to perform under this Agreement as set forth in §8 hereof.

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     1.7. FDA. “FDA” means the United States Food and Drug Administration.
     1.8. First Rights. “First Rights” mean the right of first negotiation
regarding Improvements as are set forth in §7.3 of this Agreement.
     1.9. Improvements. “Improvements” means the Improvements to the MEC agreed
to by the parties in accordance with § 7 of this Agreement.
     1.10 Line Item. “Line Item” means an MEC configuration by size.
     1.11. MEC. “MEC” means RMC’s all silicone male external catheter in its
”UltraFlex ®”, “Wide Band® “Pop On®” and “The Natural® Catheter”,
configurations, and also includes the “Clear Advantage®” and “Freedom Clear®”
configurations and includes Improvements to the extent provided herein.
     1.12. Packaging Specifications. “Packaging Specifications” means the
specifications for packaging MECs, as may be agreed from time to time by RMC and
COLOPLAST in accordance with this Agreement. The current Packaging
Specifications are set forth in Schedule 3 to this Agreement, and are the basis
for the Transfer Price.
     1.13. Product Specifications. “Product Specifications” means the
specifications, quality control tests and inspection procedures for MECs, as
they exist as of the Effective Date, and which may be promulgated from time to
time by RMC with express mutual agreement by COLOPLAST and in accordance with
this Agreement, and may include material modifications that may be agreed upon
from time to time by COLOPLAST. The current Product Specifications are set forth
in Schedule 2 to this Agreement.
     1.14 Technical Contract. “Technical Contract” means the product
specifications, quality requirements and other design and manufacturing
processes and specifications, mutually agreed upon by the Parties and documented
in the Technical Contract appended to this Agreement as Schedule 4.
     1.15. Term. “Term” means the Term provided in §3.1.
     1.16. Territory. “Territory “ means the entire world except the United
Kingdom.

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     1.17. Transfer Price. “Transfer Price” means the initial Transfer Price for
MECs set forth in Schedule 1 to this Agreement and includes Transfer Prices
otherwise established in accordance with this Agreement.
     1.18. Quota. “Quota” means the amount of MECs that COLOPLAST must purchase
from RMC during the Term of this Agreement as set forth in Section 4.1.
Section 2 AGREEMENT FOR MARKETING AND DISTRIBUTION & LICENSE
     2.1. Marketing Rights & License. COLOPLAST shall have a non-exclusive
license and right to package, offer, sell and export the MECs COLOPLAST
purchases from RMC throughout the Territory under COLOPLAST’s own brands and
marks. Pursuant to the Reconveyance and the sale or lease of the Adam Plant and
the documents conveying such between Adam and RMC, to the extent that Coloplast
acquires any Adam employees or knowledge of the Manufacturing Licenses as a
result of the Acquisition, RMC does hereby grant to Coloplast with respect to
any product, technology or other activity excepting those directly connected to
silicone MECs. a limited, worldwide, perpetual, fully paid-up, non-exclusive
right and license to use, copy, create derivative works from, sell and
distribute products, and provide services, based upon the Residuals with respect
to any product, technology or other activity excepting those directly connected
to silicone MECs. Without limiting the foregoing, RMC agrees that neither it nor
any of its Subsidiaries will bring any action or assert any claim against
Coloplast, its Subsidiaries, or their successors alleging that any trade secrets
or other information or materials in the possession of, known to, or used by
Coloplast transferred by and through the Acquisition was or is misappropriated
by Coloplast from RMC, violates RMC’s trade secret rights, or infringes RMC’s
copyrights all with respect to any product, technology or activity other than
those directly connected to silicone MEC products. For the purposes of this
paragraph, “Residuals” shall mean any information or materials that are or were
assets of Adam that have now become assets of Coloplast through the Acquisition,
and which are unintentionally retained now by Coloplast or known to employees
now acquired by Coloplast that have been exposed to such information or
materials. This license shall survive indefinitely any termination or expiration
of this Agreement.
     2.2. CE Mark or other Regulatory Approvals. COLOPLAST shall have the right
to obtain and affix to the MEC COLOPLAST’s own CE Mark or comparable regulatory
approval mark. RMC shall cooperate reasonably with COLOPLAST for that purpose,
and shall share with COLOPLAST, subject only to the Confidential Information
provisions and the provision of Section 4.13 of this Agreement, RMC’s regulatory
compliance technical files. RMC shall also provide other data and

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information reasonably necessary to any governmental agency or to Coloplast for
purposes of assisting COLOPLAST to obtain any regulatory license or approval for
the private-labeled product.
     2.3 Limited License. COLOPLAST grants to RMC during the term of this
Agreement a non-exclusive, royalty-free, limited license (“Aloe Patent License”)
to US Patent 6,805,690 (“Aloe Patent”). The Aloe Patent License shall not be
transferable by RMC except in connection with the sale of all or substantially
all of RMC’s male external catheter business line or in case of merger,
conveyance to a subsidiary or similar reorganization. RMC shall not, and shall
not permit its employees, representatives or agents to sell, assign, lease,
sublicense, transfer or disclose to any third party, or allow any third party to
use the Aloe Patent License and associated technology, except as specifically
permitted by this Agreement. The Aloe Patent License shall survive termination
or expiration of this Agreement, unless the terms of the Aloe Patent License set
forth in this Section 2.3 are violated, in which case COLOPLAST may terminate
this limited license and/or this Agreement. Any sublicense and pass through
license granted pursuant to this Section 2.3 must contain the same license terms
and other limitations as contained in this Agreement.
Section 3 TERM; TERMINATION; EXTENSION
     3.1. Term. Subject to the Conditions Precedent and other provisions of this
Section 3, the Term of this Agreement shall commence on June 1, 2006, and
continue thereafter for a period of five (5) years (“Initial Commitment Period”)
unless terminated in accordance with the provisions hereof. Provided, however,
in the event that each Conditions Precedent identified in Section 3.2 shall have
not occurred by June 1, 2006 but shall have occurred prior to August 31, 2006,
then the Term of this Agreement shall be deemed to have commenced on the first
day of the month following the month in which the last of such Condition
Precedents shall have occurred (“Effective Date”).
          3.1.1. Successive Commitment Periods. After the expiration of the
Initial Commitment Period, the Agreement shall renew automatically for an
additional one-(1) year period (the “Successive Commitment Period”)unless either
party gives the other party written notice of that party’s intent not to renew
at least one-hundred eighty (180) days prior to expiration of the Initial
Commitment Period .
          3.1.2 Failure of Good Faith Negotiations. Upon failure of the parties
to arrive at terms commercially reasonable and agreeable to each as provided in
Section 3.3 hereof, then either party may terminate this Agreement without cause
upon one-hundred eighty (180) days written notice.

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          3.1.3 Failure of ConditionsPrecedent. If each of the Conditions
Precedent identified in Section 3.2 and in the Recitals of the Agreement cannot
or shall not have occurred by August 31, 2006, this Agreement shall
automatically terminate without necessity of notice or further action by either
party; in which event all rights and obligations of the parties created by this
Agreement, shall become and be void ab initio.
     3.2 Conditions Precedent. Nothing in this Agreement to the contrary
withstanding, the Term of this Agreement shall not commence until and unless
each Condition Precedent identified with respect to the Acquisition, the
Divestiture and the Reconveyance described in the Recitals to this Agreement
shall have occurred.
     3.3 Good Faith Negotiations. At least ninety (90) days prior to the
expiration of the Initial Commitment Period and each Successive Commitment
Period, the Parties shall undertake good faith negotiations for the purpose of
reaching agreement regarding Quotas and Transfer Prices for the next Successive
Commitment Period. Any Agreement reached by the Parties shall apply to the Next
Successive Commitment Period or, if agreement is not reached until after
commencement of such Period, shall be retroactive to its commencement. Nothing
herein shall be deemed to require (i) any more than the exercise of good faith,
(ii) the successful conclusion of any such negotiations, or (iii) the reaching
of any final agreement regarding Quotas, Transfer Prices, or any other matter
the Parties may wish to discuss or negotiate. In the event such good faith
negotiations have not resulted in agreement, this Agreement shall continue in
effect in accordance with the then applicable terms and conditions until and
unless terminated in accordance with § 3.1.2 of this Agreement.
     3.4. Termination for Cause. A non-breaching party may terminate this
Agreement upon ninety (90) days written notice to the other in case of a
material breach of this Agreement that is not cured to the reasonable
satisfaction of the notifying party within such period.
Section 4 PURCHASES; PRICE; ORDERS; FULFILLMENT
     4.1. Quota. COLOPLAST shall purchase from RMC during each year of the
Initial Commitment Period during the Term of this Agreement the number of MECs
set forth below for such year.
          4.1.1 Initial Commitment Period. The Quota for each year of the
Initial Commitment Period shall be set forth on Schedule 1; provided however,
COLOPLAST shall receive an abatement of such Quotas for years 1 and 2 of the
Initial Commitment

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Period as described herein. RMC and COLOPLAST shall commence good faith
negotiations within ninety (90) days following the Effective Date in order to
abate the Quotas for Years 1 and 2 by an amount not exceeding seven hundred
fifty thousand (750,000) units in total to be abated evenly over both years to
take into account the excess inventory that COLOPLAST may acquire from ADAM in
the Acquisition. If the Parties do not reach agreement on this abatement within
thirty (30) days after good faith negotiations commence, COLOPLAST shall be
entitled to take the full 750,000 unit abatement on the Quotas to be spread
evenly over Years 1 and 2 of this Agreement.
          4.1.2 Quarterly Purchases. COLOPLAST shall purchase no less than
twenty percent (20%) of the applicable annual Quota in each calendar quarter.
     4.2 Additional Purchases. COLOPLAST may purchase MECs in excess of its
Quota during any year, but the same shall not alter or abate COLOPLAST’S Quota
obligation for any other year.
     4.3. Price. COLOPLAST shall pay RMC the applicable Transfer Price for MECs,
FOB RMC, as defined in Section 4.5 below, properly packaged and delivered in
accordance with the Delivery Instructions. The initial Transfer Prices for MECs
are set forth on Schedule 1 to this Agreement. The applicable Transfer Price
shall also be adjusted for changes in Packaging Specifications requested or
directed by COLOPLAST.
     4.4 Firm Pricing. Subject to § 4.3, the Initial Transfer Prices for MECs
shall remain firm until the second (2nd) anniversary of the Effective Date of
this Agreement, and shall thereafter be adjusted in accordance with § 4.4.1.
4.4.1. Price Adjustment. Commencing for the twelve-month period beginning on the
2rd anniversary of the Effective Date, and for each following year of the
Initial Commitment Period (the “First, Second and Third Price Adjustment Years”,
respectively) the Transfer Price will be subject to annual adjustments pursuant
to good faith negotiations between COLOPLAST and RMC. RMC and COLOPLAST will
commence such negotiations no later than ninety (90) days prior to the
commencement of each Price Adjustment Year. Absent agreement from such good
faith negotiations by thirty (30) days prior to the commencement of a Price
Adjustment Year, RMC may increase or decrease the Transfer Price to be effective
at the commencement of that Price Adjustment Year by an amount calculated as
follows:
     4.4.1.1 For increases, One Hundred Sixty percent (160%) of the actual
increase for direct labor and material costs exceeding five percent (5%) over
the 2006 Base Index since the latest of (i) the commencement of

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the Term or (ii) the latest price adjustment to the Transfer Price, except
adjustments for packaging changes directed or requested by COLOPLAST. RMC is to
provide full documentation of such increases to COLOPLAST’S reasonable
satisfaction before such price increase shall be effective.

  4.4.1.2   For decreases, One Hundred Sixty(160%) of the actual decrease for
direct labor and material costs decreasing more than five percent (5%) below the
2006 Base Index since the latest of (i) the Effective Date or (ii) the latest
price adjustment to the Transfer Price, except adjustments for packaging changes
directed or requested by COLOPLAST.

     4.4.1.3 Any adjustment to the Transfer Price will thereafter take effect at
the beginning of the Price Adjustment Year to which the adjustment relates, and
shall be then payable by COLOPLAST; except adjustments resulting from packaging
changes requested or directed by COLOPLAST, which shall be effective immediately
upon implementation.
     4.4.1.4 For purposes hereof, “2006 Base Index” means RMC’s actual costs for
material and labor at the Effective Date of this Agreement as demonstrated from
RMC’s business records maintained in the ordinary course of its business.
     4.5. Passage of Title and Risk of Loss. It is understood that “FOB RMC”
means that upon delivery of MECs by RMC to a common carrier all title and risk
of loss shall pass immediately to COLOPLAST
     4.6. Forecasts. Thirty days prior to the expiration of each calendar
quarter, during the Term of this Agreement, COLOPLAST shall provide to RMC a
nonbinding, rolling forecast of COLOPLAST’s projected requirements for the four
(4) next succeeding calendar quarters.
     4.7. Delivery Instructions. All MECs will be placed for delivery to the
destination or destinations specified by COLOPLAST.
     4.8. Minimum Order Size. COLOPLAST shall use commercially reasonable
ordering procedures with a view to placing purchase orders for MECs in minimum
aggregate amounts of at least One Hundred Thousand (100,000) units and with Line
Item minimums of at least Twenty Thousand (20,000) units per Line Item ordered.

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RMC acknowledges that there may be circumstances under which COLOPLAST may place
orders of lesser quantities.
     4.9. Order Fulfillment. RMC will endeavor to ship MECs ordered by COLOPLAST
within seven (7) weeks following receipt of order, and RMC will use commercially
reasonable efforts to accommodate any earlier delivery date requested by
COLOPLAST for unusual requirements.
     4.10. Invoice and Payment. RMC shall invoice COLOPLAST, thirty-five
(35) days net for MEC shipments . COLOPLAST shall pay each such invoice within
thirty-five (35) days following the date of the invoice.
     4.11. Non-Payment. If COLOPLAST is more than sixty (60) days in arrears for
payment of any invoice from RMC, then in addition to any other right or remedy
RMC may have at law or in equity, RMC shall be entitled upon thirty (30) days
notice to withhold delivery of MECs until COLOPLAST has paid all such amounts in
arrears.
     4.12. Country of Origin. RMC shall provide at COLOPLAST’s request a signed
Affidavit of Country of Origin for MECs delivered to COLOPLAST pursuant to this
Agreement.
     4.13. Regulatory Registration & Device Licensing. Each party shall bear its
own costs and expenses for preparation of all documents necessary for
registration and sale of MECs. The parties shall cooperate with each other and
furnish each other such information as each may reasonably require from the
other, including, where required by any government agency, the actual chemical
compounds (excluding formulations and brands to the extent not reasonably
required by the government agency) to effect such registration and with copies
of any and all filings for review upon request.
     4.14 Obsoleted Packaging. Upon a change in Packaging Specifications
requested or directed by COLOPLAST, COLOPLAST shall pay RMC an amount equal to
RMC’s out-of-pocket expense for packaging materials made obsolete by such
change; provided, however, said amount (i) shall be consistent with COLOPLAST’s
forecasts pursuant to §4.6 and (ii) shall not in any case exceed the amount of
packaging materials that would be reasonably consumed during a period of six (6)
months. RMC shall notify COLOPLAST of the amount payable and furnish COLOPLAST
with reasonable documentation substantiating RMC’s out-of-pocket expense. That
amount shall be due and payable against invoice.

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     4.15. Rebate. COLOPLAST shall be entitled to receive a Rebate from RMC in
the amount(s) and upon the conditions set forth on Schedule 1 for purchases of
MECs in excess of Quota. RMC shall pay the Rebate to COLOPLAST as a credit
against COLOPLAST’s future purchases with the balance of the Rebate, if any,
payable in cash upon termination of this Agreement. Rebates shall be calculated
at the end of each anniversary date of the Effective Date.
Section 5 CONFORMING AND NON-CONFORMING GOODS
     5.1. Conforming Goods. RMC warrants that, when delivered, MECs that
COLOPLAST purchases from RMC, (i) shall have been manufactured in accordance
with Quality System Regulations and current Good Manufacturing Practices
codified at 21 CFR Part 820, Canadian Medical Devices Conformity Assessment
System (“CMDCAS”) and ISO 13485:2003 (ii) shall be manufactured in accordance
with applicable European Union Medical Device Directives permitting affixation
of a CE Mark (iii) shall be manufactured in accordance with, and shall conform
to, the then current Product Specifications, (iv) shall be packaged in
accordance with the applicable Packaging Specifications, (v) shall not be
misbranded or adulterated, and (iv) shall conform to the Technical Contract. No
warranty is given hereunder for misuse, misbranding or adulteration occurring
after delivery to COLOPLAST.
     5.2. Non-Conforming Goods. COLOPLAST may reject and shall not be obligated
to pay for any MECs that COLOPLAST may purchase from RMC, that do not conform to
any of the warranties given by RMC in Section 5.1 of this Agreement.
          5.2.1. Apparent Defects. Subject to the provisions of §5.2.2 hereof,
COLOPLAST shall promptly give written notice (herein, “Notice of Rejection”) to
RMC of any MECs delivered to COLOPLAST that are being rejected as defective or
as non-conforming. To be effective, a Notice of Rejection (i) shall be in
writing, (ii) shall specify the shipment or lots being rejected, (iii) shall be
accompanied by relevant information substantiating the claim that such MECs were
defective or failed to conform to the applicable Product Specifications at the
time of their delivery, and (iv) shall be accompanied by a RMC Returned Goods
Authorization Number. COLOPLAST shall be deemed to have accepted MECs delivered
to it unless COLOPLAST gives Notice of Rejection within thirty (30) days from
the date of delivery to COLOPLAST of the MECs that are being rejected.
          5.2.2. Non-Apparent Defects. If the defect or nonconformity is not
readily apparent by physical inspection or revealed by the applicable quality
control tests at the time MECs are delivered to COLOPLAST (“Non-Apparent
Defects”), then COLOPLAST

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may revoke its acceptance thereof. COLOPLAST may revoke its acceptance of the
MECs by notice (herein “Notice of Revocation”) given promptly upon discovery of
any Non-Apparent Defect not later than one (1) year following the date of
delivery to COLOPLAST of the MECs which are being rejected. Notwithstanding the
foregoing, COLOPLAST may provide to RMC a Notice of Revocation of MECs with
Non-Apparent Defects that have been returned by any of COLOPLAST’s customers up
to three (3) years following delivery by RMC to COLOPLAST of the MECs that are
being rejected. To be effective, any Notice of Revocation must (i) be in
writing, (ii) specify the shipment or lots for which acceptance is being
revoked, and (iii) be accompanied by relevant information substantiating that
the defects or non-conformities were Non-Apparent Defects.
          5.2.3. Testing and Inspection. COLOPLAST shall adopt and follow the
criteria and procedures set forth in the Technical Contract for the acceptance
or rejection of MECs upon receipt from RMC.
     5.3. Replacement. At RMC’s cost and expense, COLOPLAST shall ship to a
destination specified by RMC any MECs that are rejected or for which their
previous acceptance has been revoked. RMC shall promptly replace at its own cost
and expense any MECs that are rejected by COLOPLAST or the previous acceptance
of which COLOPLAST has revoked in accordance with this Agreement.
     5.4. Product Recalls. RMC and COLOPLAST shall reasonably cooperate and
advise and consent with each other prior to any market withdrawal or recall of
MECs, or with respect to any device notification or safety alert given at the
request of the FDA, any comparable regulatory body, or otherwise (herein
collectively, “Product Recall”). RMC shall bear all costs and expense incurred
by either of the parties in connection with such Product Recall (the “Recall
Costs”), including without limitation any expenses or obligations to third
parties and any costs associated with the shipment of recalled MECs from
customers to COLOPLAST or RMC. Provided, however, that COLOPLAST shall bear all
of the Recall Costs incurred by either of the parties that result from any act,
error or omission of COLOPLAST. COLOPLAST shall maintain complete and accurate
records, as may be required by applicable law, of MECs sold by COLOPLAST.
     5.5. Customer Complaints. COLOPLAST shall be responsible for notifying
appropriate regulatory authorities in the Territory of any customer complaints
from its own customers or other occurrences regarding the MECs that COLOPLAST
has sold as may required by law to be so reported. COLOPLAST shall promptly
provide to RMC all information that COLOPLAST has received regarding any such
complaints or occurrences that require review, action or investigation by RMC.

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     5.6. Quality Assurance or other Product Modifications. RMC shall not
materially modify any quality control test and/or compliance procedure relating
to MECs, or any other aspect of the Product, the manufacturing processes or the
supplies and components embodied therein respectively without (i) proper
compliance with Quality System Regulations (21 C.F.R. Part 820) and ISO
13485:2003 requirements and (ii) notification to COLOPLAST. RMC shall give
COLOPLAST no less than ninety (90) days prior notice of RMC’s intent to make
such a material change. Any changes that may require regulatory filings, updates
or general documentation, RMC shall reasonably cooperate with COLOPLAST and
provide the required documentation to effect such regulatory filing or update or
to otherwise properly document Coloplast’s files.
     5.7. Audits and Inspections. Subject only to the provisions of this
Agreement respecting Confidential Information, COLOPLAST shall have the right
from time to time, but not more often than annually, upon reasonable notice to
audit and inspect RMC’s manufacturing facilities and records, including
technical files, relating to MECs. All such audits and inspections shall be
conducted during RMC’s ordinary business hours. If any of COLOPLAST’s audits or
inspections reveal material findings or noncompliances, COLOPLAST may re-audit
and/or re-inspect more often than annually for follow-up audits and inspections.
Section 6 CONFIDENTIAL INFORMATION
     6.1. Confidential Information; Disclosure Agreement. All Confidential
Information as defined in the Disclosure Agreement shall be maintained in
confidence in accordance with the requirements of the Disclosure Agreement and
of this Agreement. It is understood and agreed, however, that, notwithstanding
anything herein to the contrary withstanding, RMC’s proprietary information
viewed or reviewed by COLOPLAST during an audit or inspection of RMC’s
manufacturing facilities shall be treated as Confidential Information.
     6.2. Confidential Information — Disclosure. Subject to the provisions of
the Disclosure Agreement and Section 11.3.1 of this Agreement, neither party
shall disclose any Confidential Information of the other to any person except an
employee or attorney who (i) needs to know the Confidential Information for a
proper purpose under this Agreement and (ii) acknowledges in writing that the
Confidential Information may not be used or disclosed except in conformance with
the requirements of this Agreement.

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Section 7 IMPROVEMENTS; INFRINGEMENTS
     7.1 First Negotiation. RMC shall offer to negotiate with COLOPLAST an
agreement, on terms generally similar to the terms of this Agreement, providing
for RMC’s manufacture and COLOPLAST’s purchase of any Improved MEC (the
“Improvement ” or “Improved Product”) that RMC may develop in the future. Such
negotiations shall be conducted in good faith by the parties for a period of
ninety (90) days exclusively between the parties following the date upon which
RMC’s notifies COLOPLAST of the Improvement with a view to entering such an
agreement, but nothing herein shall be deemed to require any more than the
exercise of (i) exclusivity during this ninety (90) day period; (ii) good faith,
(ii) the successful conclusion of any such negotiations, or (iii) the reaching
of any final agreement regarding RMC’s manufacture and sale and COLOPLAST’s
purchase of any Improved Product. In addition, nothing herein shall be deemed to
require RMC to develop an Improved Product or to conduct any development
activities therefor except as may be determined by RMC in its sole and exclusive
judgment. The right of first, exclusive negotiation granted herein shall expire
at the earlier of (i) RMC and COLOPLAST reaching an agreement for RMC’s
manufacture and sale and COLOPLAST’s purchase of an Improved Product or (ii) the
expiration of the specified ninety (90) days.
     7.2. Limitations. Until the expiration of the right of exclusive good-faith
negotiation set forth in § 7.1, RMC shall not offer the Improved Product to any
person other than COLOPLAST permitting such person to sell the Improved Product
. Upon expiration of such right, RMC shall be immediately free to market and the
Improved Product on any terms deemed appropriate by RMC; provided, however, to
the extent RMC markets the Improved Product on terms that may be considered more
favorable than those offered to COLOPLAST, RMC shall thereupon offer the
Improved Product to COLOPLAST on substantially equivalent terms. Nothing herein
shall be deemed to limit RMC’s right to market and sell any Improved Product at
any time under RMC’s own brand and marks, either before, during or after the
period for good faith negotiations set forth in § 7.1.
     7.3. Infringement by Others. Should any actual or possible infringement or
other violation by any third party of any patents, Confidential Information, or
other intellectual property rights referenced herein and pertaining in whole or
in part to the MECs, or the manufacture thereof, come to the attention of either
party to this Agreement, such party shall promptly notify the other party of the
alleged infringement or violation. The parties hereto shall consult with one
another with a view to reaching agreement as to the best means of eliminating
the infringement or violation; provided, RMC shall have the sole right
unilaterally to commence, to not commence or to

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commence and discontinue any claim or suit for infringement of any patent or
other intellectual property belonging to it at its own expense.
     7.4. Non-Infringement; Availability. RMC represents and warrants that:
          7.4.1. RMC is not aware of any infringement upon any patent or other
intellectual property rights belonging to any other person or entity caused by
the present or presently intended manufacture, sale or use of MECs by RMC.
          7.4.2. The manufacture, sale or use of the MECs by RMC do not infringe
any U.S. patent.
          7.4.3. This Agreement and its performance by RMC, will not, breach any
agreement executed by RMC.
          7.4.4. RMC is generally knowledgeable with respect to the patent
rights of third parties relating to urinary catheters, and has conducted such
inquiry and investigation as it deemed reasonably necessary for the purpose of
determining whether the present or presently intended manufacture, sale or use
of the MECs infringes any patent or technology of any third party. To the best
of RMC’s knowledge, based upon such inquiry and investigation, the present or
presently intended manufacture, sale and/or use of the MEC by RMC does not
infringe any foreign patent or technology of any third party.
          7.4.5. Except as otherwise expressly stated herein, RMC makes no other
warranty or representation (i) respecting the scope or enforceability of patent
protection or the availability of patent protection in any jurisdiction, foreign
or domestic, or (ii) respecting infringement of any patent or other intellectual
property rights of others.
     7.5. Patent Maintenance.
          7.5.1 RMC will make all filings and periodic payments necessary to
maintain the following Patents which cover MEC products that are the subject of
this Agreement:
7.5.1.1 US Patents
5,176,666
5,376,085
5,334,175

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7.5.1.2 Corresponding Patents

         
 
  Australia   659117
 
  Canada   2,095,030
 
  Germany   DE 691 07 470 T2
 
  EP   0 556 325 B1
 
  France   0 556 325 B1
 
  Great Britain   0 556 325 B1
 
  Japan   3409070

          7.5.2 COLOPLAST will make all filings and periodic payments necessary
to maintain the Aloe Patent described in Section 2.3 of this Agreement.
     7.6. Regulatory Compliance. RMC warrants that MECs are presently eligible
for sale in interstate commerce in accordance with applicable rules and
regulations of the FDA and the European Union, and of comparable authorities.
Section 8 EXCUSED PERFORMANCE
     8.1. RMC’s Performance Excused. RMC’s obligation to provide MECS to
COLOPLAST under this Agreement shall be excused for the duration of any event of
force majeure preventing RMC’s performance of such obligation or for the
duration of any event of non payment in accordance with §4.10 of this Agreement.
     8.2. COLOPLAST’s Performance Excused. COLOPLAST’s obligation to RMC under
this Agreement shall be excused for the duration of any event of force majeure
preventing COLOPLAST performance of such obligation.
Section 9 MUTUAL WARRANTIES AND REPRESENTATIONS
     9.1. Corporate Standing; Authority. RMC and COLOPLAST each represent and
warrant to each other that it is a duly organized and validly existing
corporation in good standing under the laws of the state in which it is
incorporated, and that it has full corporate power and authority to carry on the
business presently being conducted by it and to enter into and to perform its
obligations under this Agreement.
     9.2. Due Authorization. RMC and COLOPLAST each represent and warrant to
each other that it has taken all action necessary to authorize the execution and
delivery of this Agreement.

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Section 10 COVENANTS
     10.1. Covenants of RMC. RMC makes the following covenants:
          10.1.1. For the Term of this Agreement and for one (1) year
thereafter, RMC shall maintain product liability insurance (containing both a
Vendor’s Additional Insured Endorsement and a Products Contractual Liability
Endorsement) on MECs with minimum limits of one million ($1,000,000) first
dollar coverage per occurrence and two million dollars ($2,000,000) in the
aggregate and five million dollars ($5,000,000) of corporate umbrella public
liability insurance. COLOPLAST shall be named as an additional named insured in
each policy of insurance required to be maintained by RMC hereunder. The issuer
of each such policy shall be a standard company licensed to issue insurance in
the State of Minnesota having a Best’s rating of A or higher and a policy holder
surplus of not less than thirty five million ($35,000,000). Each such policy
shall provide for (a) the issuance of a reporting or tail coverage endorsement
upon the earliest of termination of (i) the base policy, (ii) the marketing and
sale of MECs by COLOPLAST and (b) for not less than thirty (30) days prior
written notice to COLOPLAST of any proposed change in the nature, scope or
amount of coverage. RMC shall provide COLOPLAST with certificates of such
insurance and evidence of the payment of premiums therefor, promptly upon
COLOPLAST’s request.
     10.2. Covenants of COLOPLAST. COLOPLAST makes the following covenants:
          10.2.1 COLOPLAST covenants (i) not to make any express warranties or
other claims with respect to the MECs that have not been authorized by RMC, and
(ii) not to misbrand or adulterate any MECs acquired from RMC and resold by
COLOPLAST.
     10.3. Mutual Covenants. RMC and COLOPLAST each covenant to each other that:
          10.3.1. COLOPLAST and RMC will maintain all Confidential Information
of the other in confidence in accordance with the provisions of this Agreement
and the Disclosure Agreement. Notwithstanding the foregoing, COLOPLAST and RMC
may disclose such Confidential Information as required by law; provided that the
disclosing party shall (i) immediately notify the other party of the
Confidential Information to be disclosed and the legal requirement for the
disclosure of such Confidential Information; and (ii) use its commercially
reasonable efforts to maintain the confidentiality of the

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Confidential Information to the maximum extent possible, using in every case no
less than the efforts the party would use to protect its own confidential
information, for example, by seeking a protective order. Provided, however, RMC
shall not be required to seek confidential treatment for, or to take other
affirmative steps to attempt to limit the dissemination of, information
routinely required to be filed by RMC in accordance with RMC’s reporting
requirements pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, and the Rules and Regulations of the Securities and Exchange Commission
promulgated thereunder.
          10.3.2. Each party shall furnish to the other such information that is
maintained by the furnishing party in the ordinary course of its business that
the other party reasonably requests for the purpose of verifying the furnishing
party’s compliance with the terms and conditions of this Agreement, including a
complete and correct copy of any notice, report or other communication that it
receives from the FDA or from any other governmental agency materially
concerning the MEC.
          10.3.3. Each Party shall keep books and records in sufficient detail
to permit verification of its compliance with the terms and conditions of this
Agreement, and all such books and records shall be available for inspection upon
prior written notice by the other party or its designated representative at the
principal place of business of the party keeping such books and records at
reasonable times during regular business hours. This obligation is in addition
to any other record keeping obligation under this Agreement.
Section 11 INDEMNIFICATION
     11.1. Indemnification by RMC. RMC shall defend, indemnify and hold
COLOPLAST, its officers, directors, employees, and agents free and harmless from
and against any and all claims, demands, actions and causes of action which are
hereafter made or brought against COLOPLAST, its officers, directors, employees,
agents or distributors by any person, firm, corporation or association for
recovery of damages to property, or damages for injury, illness and/or death of
any person which is alleged to be caused by or attributable to (i) an error,
omission, act, failure or regulatory noncompliance by RMC in the manufacturing
and production of MECs; or (ii) infringement of the MECs on any third-party’s
rights; or (iii) a breach by RMC of any warranty, or covenant given by RMC under
this Agreement; provided that the obligations of RMC hereunder shall not extend
to claims for damages that are found to be solely attributable to the acts,
omissions or negligence of COLOPLAST; and provided further that COLOPLAST shall
make no settlement of any claim for which it seeks indemnity from RMC without
the written approval of RMC.

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     11.2. Indemnification by COLOPLAST. COLOPLAST shall defend, indemnify and
hold RMC, its officers, directors, employees and agents free and harmless from
and against any and all claims, demands, actions and causes of action which are
hereafter made or brought against RMC, its officers, directors, employees,
agents or distributors by any person, firm, corporation or association for
recovery of damages to property, or damages for injury, illness and/or death of
any person which is alleged to be caused by or attributable to (i) an error,
omission, act, failure or regulatory noncompliance by COLOPLAST in the marketing
of the MECs; or (ii) a breach by COLOPLAST of any representation, warranty or
covenant given by COLOPLAST under this Agreement. Provided however, that the
indemnification obligation of COLOPLAST hereunder shall not extend to claims for
damages that are found to be attributable solely to the acts, omissions or
negligence of RMC; and provided further that RMC shall make no settlement of any
claim for which it seeks indemnity from COLOPLAST without the written approval
of COLOPLAST.
Section 12 DAMAGES
     12.1. Damages for Breach. Except as may be otherwise expressly provided in
this Agreement, nothing in this Agreement shall be construed to relieve a
defaulting party from liability to the other, or to limit the amount of such
liability, at law or in equity on account of a breach by the defaulting party of
its duties and obligations under this Agreement. Neither party, however, shall
be liable to the other for any consequential or incidental damages resulting
from a breach, notwithstanding that the possibility thereof was known to the
party in breach.
Section 13 GENERAL PROVISIONS
     13.1. Notices. All notices permitted or required under this Agreement shall
be in writing and shall be deemed to have been given and received immediately
(i) when personally delivered or when transmitted by telefacsimile machine to
the party for whom intended at the telefacsimile number below, with a confirming
copy sent by U.S. mail, addressed to the party for whom intended at the address
set forth below or (ii) on the second business day after the date on which
mailed by certified or registered mail, return receipt requested, postage
prepaid, addressed to the party for whom intended at the address set forth below
or such other address or telefacsimile number as provided by the parties in
writing:
Anthony J. Conway, President
Rochester Medical Corporation

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One Rochester Medical Drive
Stewartville, Minnesota 55976
Telefacsimile Number: (507) 533-9725
Henrik Norup Riecke, Vice President — Contract
Manufacturing
COLOPLAST A/S
Egevangen 4 2980
Kokkedal, Denmark.
Telefacsimile Number: +45 49 11 11 60
With a copy to:
Peter Volkers, Legal Affairs Director
Coloplast A/S
Holtedam 1, DK-3050
Humlebæk Denmark
Fax +45 49 11 24 10
     13.2. Resolution of Disputes. Any controversy, dispute or claim in
connection with, arising out of or relating to this Agreement or the
performance, enforcement, breach, termination, application or validity hereof
shall be submitted to arbitration. Such arbitration proceedings shall be held in
Minneapolis, Minnesota, in accordance with the rules then obtaining of the
American Arbitration Association, except that: (i) the arbitrators shall furnish
the parties with a written decision setting forth findings of fact, conclusions
of law and an order; (ii) if the issue in dispute involves matters of patents,
licensing or technology, the arbitration panel shall be composed of persons who
are knowledgeable in such matters; (iii) a stenographic record shall be made of
the arbitration proceedings; and (iv) the award of the arbitrators shall be
subject to review by a court of competent jurisdiction, which court shall apply
the same standard of review that an appellate court would apply in reviewing the
decision of a trial court. Each arbitrator shall be neutral, impartial and
independent of the parties and others having any known interest in the outcome,
shall abide by the Canons of Ethics of the American Bar Association for neutral,
independent arbitrators, and shall have no ex parte communications about the
case. In addition to any monetary award that may be given, the arbitrators may
order or direct either party to do any act required of it by this Agreement or
to refrain from the doing of any act or practice that is contrary to this
Agreement. This Agreement to arbitrate shall be specifically enforceable. Each
party shall bear its own costs and expense in any such proceedings, but the
arbitrators may, in their discretion and consistent with this Agreement, award
costs and attorneys’ fees to either or both of the parties.

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     13.3. Force Majeure. Neither of the parties shall be liable to the other
for any delay or default in performing its obligations hereunder if such delay
or default is caused by force majeure, such as wars or insurrection, strikes,
fires, vandalism, floods, work stoppages, embargoes, lack of materials or other
circumstances beyond the reasonable ability of the party affected thereby to
control provided that the party so affected resumes the performance of its
obligations with due diligence as soon as practicable after the effects of any
such event have been alleviated.
     13.4. Binding on Successors. This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and legal representatives of each of
the parties hereto. Neither party may assign this Agreement, in whole or in
part, without the express prior written consent of the other, and any whole or
partial assignment without such written consent shall be entirely void, except
in connection with the sale of all or substantially all of RMC’s male external
catheter business line or in case of merger, conveyance to a subsidiary or
similar reorganization.
     13.5. Amendment. No amendment or modification of this Agreement shall be
valid or binding upon either of the parties hereto unless made in writing and
signed by such party or its duly authorized officer or representative.
     13.6. Governing Law. This Agreement shall be construed in accordance with
the laws of the state of Minnesota without giving effect to its conflicts of law
provisions.
     13.7. Captions. Captions appearing in this Agreement are intended solely
for convenience of reference and are not to be deemed a part of this Agreement.
     13.8. Entire Agreement. This Agreement constitutes the entire understanding
of the parties with respect to its subject matter, and supersedes any prior
agreement or agreements in principle between the parties.
Section 14 Survival
     The provisions of §§ 6, 10, 11, 12 and 13 shall survive the termination of
this Agreement.
SECTION 15. Attachments.
     The following attachments are appended to and made part of this Agreement:

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  Schedule 1   Transfer Prices
 
  Schedule 2   Product Specifications
 
  Schedule 3   Packaging Specifications
 
  Schedule 4   Technical Contract

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
by its duly authorized representatives as of the day and year first above
written.

                      ROCHESTER MEDICAL CORPORATION,       COLOPLAST A/S     a
Minnesota corporation       a Denmark corporation    
 
                   
By:
  /s/ Anthony J. Conway
 
Anthony. J. Conway       By:   /s/ Sten Scheibye
 
Sten Scheibye    
 
  President and Secretary           Its Chief Executive, CEO    
 
                    ATTEST:       ATTEST:    
 
                   
By:
  /s/ Martyn R. Sholtis
 
Martyn R. Sholtis       By:   /s/ Peter Volkers
 
Peter Volkers    
 
  Its Vice President           Its Legal Affairs Director    

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