Exhibit 10.1

 

Certain identified information has been excluded from this exhibit because it is
both (i) not material and (ii) would be competitively harmful if publicly
disclosed.

 

AMENDED AND RESTATED

 

MANUFACTURING AND SUPPLY AGREEMENT

 

 

 

This Amended and Restated Manufacturing and Supply Agreement (the “Agreement”),
effective as of April 26, 2019 (the “Effective Date”), is made by and between
Isoray Medical, Inc., a Delaware corporation with offices at 350 Hills St.,
Suite 106, Richland, WA 99354 (“Isoray”), and GT MEDICAL TECHNOLOGIES, INC., a
Delaware corporation, having its principal place of business at 1809 S. Holbrook
Lane, Suite 107, Tempe, AZ 85281 (“GT MED TECH”). Isoray and GT MED TECH may be
referred to herein individually as a “Party”, and collectively as the “Parties”.

 

RECITALS

 

A.     Isoray and GT MED TECH entered into a Manufacturing and Supply Agreement,
dated January 3, 2018 relating to the manufacture and supply of certain
brachytherapy product incorporating Isoray’s Cesium-131 sources for use and/or
sale for the treatment of certain tumors, as amended December 28, 2018 (the
“Original Supply Agreement”).

 

B.     As Isoray and GT MED TECH have gained experience working together under
both the Collaborative Development Agreement, dated as of March 13, 2017 (the
“Development Agreement”) and the Original Supply Agreement, the Parties desire
to amend specific terms and conditions of the Original Supply Agreement.

 

C.     The Parties now wish to amend and restate in its entirety the Original
Supply Agreement in the manner set forth in this Agreement.

 

NOW THEREFORE, in consideration for the covenants set forth below, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as set forth below.

 

AGREEMENT

 

1.

Definitions.

 

1.1     “Affiliate” means, with respect to a Party, any corporation or other
business entity controlling, controlled by or under common control with such
Party. The term “controlling” (with correlative meanings for the terms
“controlled by” and “under common control with”) as used in this definition
means either (a) possession of the direct or indirect ownership of more than
fifty percent (50%) of the voting or income interest of the applicable
corporation or other business entity, or (b) the ability, by contract or
otherwise, to control the management of the applicable corporation or other
business entity.

 

1.2     “Applicable Law” means all applicable international, national, federal,
state, and local laws, ordinances, and regulations applicable to the
manufacture, supply, marketing, sale and use of Products hereunder, including
without limitation any applicable FDA and other Regulatory Authority
requirements.

 

1.3     “Certificate of Analysis” means a document issued by Isoray verifying
adherence to Product Specification and may also include the patient ID, quantity
of Products, activity level, and implant date.

 

 

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1.4      “Claim” has the meaning set forth in Section 11.1.

 

1.5     “Confidential Information” has the meaning set forth in Section 9.1.

 

1.6     “Control” means, with respect to any patent or other intellectual
property, that the applicable Party owns or has a license to such patent or
other intellectual property and has the ability to grant to the other Party
access to and a license (or sublicense, as applicable) under same without
violating the terms of any agreement with a Third Party.

 

1.7     “Defective Product” has the meaning set forth in Section 4.3(a).

 

1.8     “Disclosing Party” has the meaning set forth in Section 9.1.

 

1.9     “FDA” means the United States Food and Drug Administration or any
successor thereto.

 

1.10     “Forecast” has the meaning set forth in Section 3.2.

 

1.11     “Foreground IP” has the meaning set forth in Section 7.1.

 

1.12     “GammaTiles” means the square or rectangular customizable tile carriers
used to manufacture Product (as defined below).

 

1.13     “GT MED TECH Change Request” has the meaning set forth in Section 3.9.

 

1.14     “GT MED TECH Indemnitees” has the meaning set forth in Section 11.1.

 

1.15     “GT MED TECH Technology” means all patents, patent applications or
other intellectual property rights (including without limitation know-how or
trade secrets) that are Controlled by GT MED TECH as of the Effective Date or
during the Term and that are necessary or useful to manufacture and supply the
Products hereunder.

 

1.16     “Indemnified Party” has the meaning set forth in Section 11.3.

 

1.17     “Indemnifying Party” has the meaning set forth in Section 11.3.

 

1.18     “Isoray Indemnitees” has the meaning set forth in Section 11.2.

 

1.19     “Losses” has the meaning set forth in Section 11.1.

 

1.20     “Pricing Schedule” has the meaning set forth in Section 5.1.

 

1.21     “Product” means (a) GammaTiles incorporating Seeds developed by the
Parties under the Development Agreement, sterilized and packaged in accordance
with Specification (Exhibit A); and/or (b) general accessories, in each case for
the limited purpose of aiding in the use of the Product described in subsection
(a) for brachytherapy for brain cancer treatments. The specifics of the general
accessories for Products identified in subsection (b), including price, shall be
mutually agreed by the Parties from time to time, as set forth in this
Agreement.

 

 

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1.22     “Quality Agreement” has the meaning set forth in Section 4.1.

 

1.23     “Recall” has the meaning set forth in Section 8.5(a).

 

1.24     “Receiving Party” has the meaning set forth in Section 9.1.

 

1.25     “Regulatory Approval” means any and all approvals, including
supplements and amendments, licenses, registrations or authorizations of any
Regulatory Authority that are necessary for the manufacture, distribution, use,
marketing or sale of the Product in a regulatory jurisdiction.

 

1.26     “Regulatory Authority” means any governmental authority, including
without limitation the FDA, or any other national, supra-national, regional,
state or local regulatory agency, department, bureau, commission, or council,
with responsibility, jurisdiction and authority to grant licenses or Regulatory
Approvals or grant pricing and/or reimbursement approvals necessary for the
manufacture, use, importation, packaging, labeling, marketing, or sale of
medical devices in any country or group of countries.

 

1.27     “Regulatory Filings” means all applications, filings, dossiers and the
like submitted to a Regulatory Authority for the purpose of obtaining Regulatory
Approval from such Regulatory Authority.

 

1.28     “Seed” means Isoray’s Cesium-131 source model CS-1

 

1.29     “Specifications” means the product characteristics, processing,
labeling and packaging requirements, and quality standards pertaining to the
commercial manufacture of Product, which is set forth in Exhibit A. The
Specification for a Product may be amended from time to time in accordance with
Section 3.9 or otherwise upon mutual written agreement of the Parties.

 

1.30     “Term” has the meaning set forth in Section 12.

 

1.31     “Third Party” means any entity or individual other than the Parties and
their respective Affiliates.

 

1.30     “Trade Secret” means information, including a formula, pattern,
compilation, program, device, method, technique, or process, that derives
independent economic value, actual or potential, from not being generally known
to or readily ascertainable through appropriate means by other persons who might
obtain economic value from its disclosure or use; and is the subject of efforts
that are reasonable under the circumstances to maintain its secrecy.

 

2.     Exclusivity For the Term of this Agreement, Isoray shall supply
exclusively to GT MED TECH the Seeds as used for the Product in application of
brachytherapy in brain cancer and shall not sell or otherwise provide the
Product to any third-party for brachytherapy in brain tumors. GT MED TECH shall
purchase exclusively from Isoray for the Term of this Agreement the Seeds for
application of brachytherapy in brain cancer. Nothing in this Agreement
prohibits Isoray from continuing to manufacture and supply the Seeds, alone or
in configurations other than the Product, for brain cancer treatments.

 

 

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3.

Manufacture & Supply of Product.

 

3.1     Manufacture and Supply; Territory. Subject to the provisions herein,
Isoray shall, manufacture and supply Product through drop-shipments to end users
designated by GT MED TECH. For clarity, Isoray may use Third Party
subcontractors or vendors for certain aspects of the manufacturing process, such
as sterilization. GT MED TECH shall purchase such Products from Isoray, all in
quantities to be set forth on purchase orders submitted from time to time by GT
MED TECH in accordance with the provisions of Section 3.3. In the event (a)
Isoray is unwilling or unable to supply, in compliance with the terms set forth
in this Agreement, quantities of Product ordered by GT MED TECH in accordance
with Section 3.3 and (b) GT MED TECH is at such time in full compliance with
this Agreement, then GT MED TECH shall be permitted to obtain from a Third-Party
manufacturer (or manufacture itself) those quantities of Product that Isoray is
unwilling or unable to supply. At all times during the Term, any and all of
Isoray’s and GT MED TECH’s obligations under this Agreement shall be subject to
and in accordance with the provisions, limitations and conditions imposed by FDA
in respect of the Products. On an “as needed basis" as the Product is launched
in countries outside the United States, the Parties shall negotiate in good
faith an amendment to this Agreement to include such additional terms as the
Parties shall deem necessary to ensure compliance with applicable laws in such
countries. Notwithstanding this Section 3.1, if GT MED TECH elects to have the
Product manufactured at a non-Isoray facility then GT MED TECH shall give Isoray
six (6) months written notice that GT MED TECH intends to have the Product
manufactured at another facility and shift its purchase to the Seeds, so that
Isoray can have sufficient time to reallocate resources as needed of its staff
and facility. The Seeds shall be sold at prices and pricing adjustments as
provided in Article 5. GT MED TECH shall have sole responsibility for and pay,
or cause to be paid, all costs related to ensure that the new manufacturing
facility has a proper radioactive materials license allowing for the receipt of
Isoray’s Seeds.

 

3.2     Forecasts. GT MED TECH shall submit to Isoray, no later than the 45 days
before the beginning of every calendar month during the Term, a rolling forecast
of which the first calendar month will constitute a binding purchase order for
Product (“Binding Forecast”) and of which the remaining eleven calendar months
will constitute a non-binding forecast (“Non-Binding Forecast”) setting forth an
estimate of the total quantity of Product GT MED TECH reasonably believes it
will purchase during such twelve calendar months. For the avoidance of doubt,
only the first calendar month will be a Binding Forecast and the remaining
eleven calendar months are Non-Binding Forecasts of quantity of Product which is
to be used by Isoray for manufacturing planning purposes. At the end of each
calendar quarter, GT MED TECH will compare the Binding Forecasts for each of the
previous three months with the invoices for actual Products shipped for each of
the prior calendar months. In the event of a “shortfall” in any given month,
that is fewer actual Products were shipped as compared to the Binding Forecast
for that calendar month, then no later than the 15th day of the second month
following the end of a calendar quarter GT MED TECH shall pay Isoray the
equivalent of the price of the Seeds times the shortfall in Product units
shipped.

 

 

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3.3     Purchase Orders. GT MED TECH shall provide to Isoray written ‘blanket’
purchase order for Product(s) for the current calendar month with each Binding
Forecast, and then from time to time throughout the calendar month, Isoray shall
be provided specific GammaTile™ product order form from an end user, each of
which shall specify the quantity of each Product to be delivered, the
anticipated implant date, the loading configuration for the Product, the date of
delivery and one or more delivery locations (each of which must be an end user
facility with an appropriate license for receiving the Product). Within one (1)
business day after its receipt of a specific purchase order that complies with
the foregoing requirements, Isoray shall acknowledge in writing its receipt and
acceptance of such order, and shall confirm the date(s) for delivery of Product;
provided, however, that Isoray shall not be obligated to supply any quantities
of Products hereunder to the extent (a) the amount ordered in any calendar
quarter exceeds 120% of the quantity forecasted for such calendar quarter in the
most recent Forecast; or (b) the delivery date is less than five (5) business
days after the date of Isoray’s receipt of the order, but in either case ((a) or
(b)), Isoray shall use good faith efforts to attempt to fill such orders to the
extent it is reasonably able to do so. In addition, Isoray shall not be
obligated to accept an order if the delivery location is not appropriately
licensed for receiving the Product. Any purchase orders submitted hereunder
shall reference this Agreement and shall be governed exclusively by the terms
contained herein. Any term or condition in any purchase order, confirmation, or
other document furnished by GT MED TECH or Isoray that is in any way
inconsistent with the terms and conditions set forth in this Agreement is hereby
expressly rejected.

 

3.4     Order Cancellations. GT MED TECH may cancel any purchase order prior to
shipment of the Product; provided, however, that GT MED TECH shall be obligated
to pay the price per the Pricing Schedule for any such cancelled order, along
with any shipping costs (both outbound and inbound), if applicable.

 

3.5     Storage and Handling. Isoray shall store and handle the Products as
required by the Specifications, Applicable Law, and all established safety
practices for the Products and in accordance with all Quality Control
Procedures.

 

3.6     Packaging and Labeling. All Products manufactured by Isoray shall be
packaged and labeled in accordance with the Specifications and Applicable Law.
Any changes to the label and/or the text of any written inserts for the Product
will require the prior written consent of GT MED TECH.

 

3.7     Delivery. Isoray shall promptly report to GT MED TECH the occurrence of
any event within or beyond its control which is likely to affect delivery of any
ordered Products. Isoray shall deliver the ordered Product directly to the end
user at the delivery location specified by GT MED TECH in its purchase order,
along with the following documentation: (a) the batch number and order number of
the delivered Product(s); (b) a Certificate of Analysis, as described in Section
1.3; (c) any information and documentation set forth in the Specifications or
reasonably requested by GT MED TECH or the end user; and (d) any documentation
that Isoray customarily includes in shipments of Seed-type products that it
manufactures. The Parties acknowledge all shipments of Product will be routed
from Isoray to a Third-Party sterilization facility as an intermediate
destination prior to delivery to end user(s).

 

 

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3.8     Shipping; Risk of Loss. All shipments of Products will be EXW
(Incoterms 2010) Isoray’s manufacturing facility with GT MED TECH’s selected
shipping carrier (which carrier shall be reasonably acceptable to Isoray). GT
MED TECH agrees to separately pay expenses incurred by Isoray in the shipment
and delivery of ordered Products, including without limitation freight charges,
import duties and insurance premiums, provided such expenses are listed
individually in Isoray’s invoice to GT MED TECH. Except as provided herein with
respect to Defective Products, risk of loss as to Products shipped shall pass to
GT MED TECH or the recipient designated by GT MED TECH (as applicable) upon
delivery of such Products to GT MED TECH’s carrier at Isoray’s manufacturing
facility.

 

3.9     Changes/Engineering Change Orders. If Isoray finds it necessary or
desirable to change Specifications (including packaging, labeling and written
insert) for a Product, or to change manufacturing process, raw materials, or
components used by Isoray in the manufacture of Products in a manner that
affects the Specifications or the form, fit, function, or performance of a
Product, Isoray will deliver notice to GT MED TECH and will not implement any
such change without GT MED TECH’s prior written consent. If GT MED TECH finds it
necessary or desirable to change Specifications for any Product, GT MED TECH may
deliver a request for such change to Isoray (“GT MED TECH Change Request”),
Isoray shall promptly inform GT MED TECH of any changes to the Commercial
Pricing Schedule that would result from implementing such change. Subject to
pricing adjustments (under Section 5.1), Isoray shall use commercially
reasonable efforts to make any change identified in a GT MED TECH Change Request
that is in response to a regulatory, sterilization methods or safety issue
pertaining to the applicable Product, and will consider in good faith any other
reasonable change identified in a GT MED TECH Change Request. In the event a GT
MED TECH Change Request includes a major design change in the sterilization
method of the Product (a “Major Sterilization Change Request”) and requires
investment in Isoray’s operation, GT MED TECH has agreed to cover the cost of
such investment. Isoray will consider making such adjustments in its operation
to accommodate such Major Sterilization Change Request. In the event Isoray does
not agree to a Major Sterilization Change Request proposed by GT MED TECH
reasonably and in good faith, GT MED TECH may seek a Third Party manufacturer of
the Product under the Major Sterilization Change Request without further
liability to Isoray. Unless the Parties otherwise agree in writing, capital
equipment purchased by Isoray in order to implement a Major Sterilization Change
Request that is paid for by GT MED TECH investment shall be GT MED TECH’s sole
property and shall not be encumbered or disposed of in any way by Isoray, except
with GT MED TECH’s written consent. Isoray shall, at its expense, maintain such
capital equipment in accordance with its typical practices.

 

3.10     Process Improvement Projects. GT MED TECH has established and is
working toward specific process improvement projects to improve various aspects
of the manufacture and delivery of the Product (Exhibit E). For each process
improvement project, GT MED TECH will provide a scope of work including desired
personnel qualifications, estimated hours, and timeline. Isoray will review the
scope of work and notify GT MED TECH of either its acceptance or proposed
modifications based on Isoray’s understanding of the work being requested and
Isoray’s availability of resources. Once agreed upon by the Parties, any scope
changes to a project will be agreed to by both Parties in writing, prior to the
work relative to the scope change being performed. The work on each process
improvement project will be billed each month on a time and materials basis. GT
MED TECH will revise its process improvement projects on a yearly basis.

 

 

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3.11     Key Performance Indicators. GT MED TECH has established specific key
performance indicators (“KPIs”) related to the manufacture and delivery of the
Product (Exhibit F).

 

3.12     Obsolete Materials. As a result of a requested design change by GT MED
TECH, certain materials may become obsolete, meaning that such materials are no
longer used to manufacture Products and/or cannot be cost-effectively reworked
to be used under the design change. At mutually-agreeable times, Isoray shall
provide GT MED TECH with an invoice for the purchase costs of such obsolete
materials, and GT MED TECH shall pay such invoice within sixty (60) days after
receipt thereof. At GT MED TECH’s option, Isoray shall either return or destroy
such obsolete materials at GT MED TECH expense.

 

3.13     Reporting.   Following the format shown in Exhibit C, Isoray shall
provide a monthly report summarizing inventory of components, work-in-progress
and scrap rates of Product manufacturing.

 

4.

Quality Control; Acceptance and Rejection.

 

4.1     Quality Control. Isoray and GT MED TECH shall concurrently with this
Agreement enter into a quality agreement to designate the roles and
responsibilities of the Parties relative to a quality control process (the
“Quality Agreement”).

 

4.2     Licensure and Standards. At its own expense, Isoray represents and
warrants it shall maintain throughout the Term of this Agreement, registered
facilities, appropriate licensure and/or certifications, and applicable controls
in connection with the manufacture and supply of Product hereunder, all in
compliance with Applicable Laws and those quality standards as specified in the
Quality Agreement. Isoray shall notify and keep GT MED TECH informed of any
government or regulatory inspections of Isoray’s facilities that are relevant to
the manufacture and supply of the Products hereunder. Other obligations relative
to such inspections will be specified in the Quality Agreement.

 

4.3     Acceptance and Rejection of Product.

 

(a)     GT MED TECH may reject any Product delivered under this Agreement that
does not comply with the warranties set forth in Section 10.2(a) (in all cases,
a “Defective Product”) by giving written notice of such Defective Product to
Isoray within seventy two (72) hours after receipt of the Product shipment,
which notice shall specify in reasonable detail the grounds for such rejection.

 

(b)     GT MED TECH shall return Defective Products to Isoray at Isoray’s
expense using Isoray’s then-standard return material authorization (“RMA”)
procedures. Exhibit D describes Isoray’s RMA procedures as of the Effective
Date, and Isoray shall provide GT MED TECH with written notice of any
modifications to such RMA procedures. Subject to Section 4.3(c), Isoray shall
replace any returned Defective Products as quickly as possible, and GT MED TECH
shall pay Isoray for such replacement Product in accordance with Section 4.1, or
in the event that GT MED TECH has already paid for the returned Defective
Products, Isoray shall replace such Defective Products at its own expense.

 

 

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(c)     If Isoray disagrees with GT MED TECH’s determination that certain units
of Product are Defective Product, the Parties will first use good faith efforts
to settle such dispute within thirty (30) days of GT MED TECH’s notice of such
alleged defects. If the Parties are unable to resolve such dispute within this
thirty (30) day period, such Product shall be submitted to a mutually acceptable
Third Party testing service. Such Third Party testing service shall determine
whether such Product meets the Specifications, and the Parties agree that such
testing service’s determination shall be final and binding on the Parties. The
Party against whom the Third Party laboratory rules shall bear all costs of the
Third Party testing.

 

(d)     A warranty from the manufacturer is in place for the collagen products
which states that it shall be in compliance with the collagen product
specifications. If it is determined that the collagen product does not meet
acceptance criteria during visual inspection, a non-comformance report (NCR)
shall be initiated and the collagen product lot shall be quarantined as
appropriate. During this time, the collagen product shall remain in the sealed
packaging. GT MED TECH shall be notified within 24 hours in order to determine
how to best handle the non-conforming collagen product and Isoray will work with
GT MED TECH in order to appropriately return product back to the manufacturer.

 

5.

Prices and Payment.

 

5.1     Supply Price. The price for the Seeds and the Products manufactured by
Isoray and supplied to GT MED TECH shall be as set forth in Exhibit B (the
“Pricing Schedule”). Such pricing shall be periodically adjusted in accordance
with Sections 5.1(a)-(c) and reflected in a written amendment to the Agreement,
signed by authorized representatives of both Parties.

 

(a)     Open Book Pricing Formula. The price(s) for the Products and Seeds shall
be set using the open-book pricing formula as set forth in Exhibit B. Initial
pricing shall be based on: (i) best-available bill of material ("BOM") cost data
by volume, (ii) current labor standards including assembly as developed during
pilot builds of the Products, (iii) estimated scrap rates, (iv) overhead and (v)
gross profit margin. Pricing may be adjusted up or down annually as a result of
fluctuations in materials costs, or as a result of deviations in actual labor,
scrap or warranty costs, if any, provided that any annual adjustment for costs
of the Product or the Seeds is limited to a maximum increase of three percent
(3%). Any engineering change order (“ECO”) occurring during the Manufacturing
Term which impacts the BOM costs or the manufacturing process will be reviewed,
and pricing shall be adjusted accordingly upon implementation of the ECO as
mutually agreed upon by Isoray and GT MED TECH.

 

(b)     Quantity Dependence. The open-book pricing formula described above shall
be based on a package of 3 or 6 GammaTiles configurations, and the price shall
be based on the quantity of Products manufactured and supplied under GT MED
TECH’s purchase orders. Isoray shall allocate direct and indirect labor
resources and negotiate supply agreements with vendors for material quantities
to meet such quantity purchase orders of GT MED TECH.

 

(c)     Price for the Product. Notwithstanding anything to the contrary set
forth herein, Isoray shall have no obligation to provide to GT MED TECH any
details of its costs associated with production of Seeds. The price for Product
shall be equal to the sum of (i) the Seed price and (ii) the pricing for the
assembly of the Seed into the GammaTile and other steps in the Product
manufacturing process (in the case of subsection (ii), as determined and
included in accordance with the open-book process above).

 

 

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5.2     Audit. From time to time, but with at least thirty (30) business days
advanced written notice and not more than once per calendar year, GT MED TECH
may, at its sole expense, conduct an audit of Isoray’s books and records
relative to the manufacture, shipment, purchase price, and open book pricing
formula for the Product as reflected in Exhibit B (but excluding all books and
records relative to the production costs of Seeds or other Isoray business not
related to the Product).

 

5.3     Invoice and Payment. Upon shipment of Product, Isoray shall issue to GT
MED TECH a written invoice for such shipment. If applicable, costs and expenses
incurred by Isoray with such shipment, and agreed to be paid by GT MED TECH
under this Agreement, shall be included as line-items on such invoice. All
undisputed payments due to Isoray shall be paid in U.S. Dollars not later than
forty-five (45) days following the receipt of the invoice, which shall be no
earlier than the date on which the applicable Product is delivered to GT MED
TECH’s carrier by Isoray. Unless otherwise agreed by the Parties, all payments
under this Agreement shall be paid by wire transfer or electronic funds transfer
of immediately available funds to a U.S.-based account designated in writing by
Isoray.

 

5.4     Taxes. Any taxes now or hereafter imposed with respect to the
transactions contemplated under this Agreement (with the exception of income
taxes or other similar taxes imposed upon Isoray and measured by the gross or
net income of Isoray) shall be the responsibility of GT MED TECH, and if paid or
required to be paid by Isoray, the amount thereof shall be added to the
applicable invoice and become a part of the amounts payable by GT MED TECH for
such shipment.

 

6.     Tooling. Tools for the manufacture of Products shall be paid for or
furnished by GT MED TECH, shall be GT MED TECH’s sole property, and shall not be
encumbered or disposed of in any way by Isoray (“Tools”). The Tools shall be
marked in such a way to clearly identify GT MED TECH’s ownership and shall be
separated from property that does not belong to GT MED TECH. GT MED TECH shall
be responsible for purchasing new Tools specifically required in connection with
manufacture of the Product(s), upon request. Isoray, at its expense, shall
maintain such Tools in good working condition subject to normal wear and tear
and when requested shall provide GT MED TECH copies of all repair and
maintenance records for such Tools. The Tools shall be used exclusively for
Isoray’s performance of its obligations under this Agreement.

 

7.

Intellectual Property.

 

7.1     Ownership. Each Party (and its Affiliates or subcontractors) will retain
all right, title and interest in any inventions, ideas, concepts, know-how, work
product, and other intellectual property owned or controlled by such Party prior
to or independent of the Parties’ activities under this Agreement. It is not
anticipated that any new intellectual property will be created in the course of
activities under this Agreement. However, in the event that a Party or its
respective employees or agents develop, invent, or conceive any inventions,
ideas, concepts, know-how, work product, or other intellectual property in the
course of their activities under this Agreement (“Foreground IP”), such
Foreground IP shall be owned by Isoray if invented solely by employees or agents
of Isoray, and by GT MED TECH if invented solely by employees or agents of GT
MED TECH or if jointly invented by employees or agents of Isoray and GT MED
TECH.

 

 

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7.2     License to Isoray. GT MED TECH hereby grants to Isoray a non-exclusive,
royalty-free license to use and practice the GT MED TECH Technology and if
appropriate, GT MED TECH Foreground IP solely and exclusively to manufacture the
Product exclusively for GT MED TECH during the Term and in accordance with the
provisions of this Agreement. For the avoidance of doubt, this license permits
Isoray to manufacture the Products as square or rectangular Gamma Tiles with
Seeds solely for GT MED TECH. No other use of this license by Isoray is
permitted.

 

7.3     License to GT MED TECH. Isoray hereby grants to GT MED TECH a
non-exclusive, royalty-free license to use and practice any intellectual
property related to the Product and Controlled by Isoray including any Isoray
Foreground IP, solely to the extent necessary for GT MED TECH to sell and offer
for sale Product manufactured by Isoray during the Term and in accordance with
the provisions of this Agreement. For the avoidance of doubt, this license
permits GT MED TECH to sell the Products manufactured by Isoray. No other use of
this license by GT MED TECH is permitted.

 

7.4     Trademarks. GT MED TECH shall be responsible for the selection,
registration, maintenance, and defense of all trademarks for use in connection
with GT MED TECH’s sale or marketing of the Products, as well as all expenses
associated therewith. As between the Parties, GT MED TECH shall exclusively own
all such trademarks.

 

7.5     No Implied Licenses. Neither Party grants (or agrees to grant) to the
other Party any right or license to use any of its intellectual property,
know-how or other proprietary information, materials or technology, or to
practice any of its patent, trademark or trade dress rights, except as expressly
set forth in this Agreement.

 

8.

Regulatory.

 

8.1     Regulatory Approvals. Ownership of the Regulatory Approval of the
Product in the United States, as well as the ownership of related regulatory
data and regulatory documents, is governed by terms and conditions of Article 5
of the Development Agreement. Maintenance of the Regulatory Approval for the
Product in the United States shall be the responsibility of the Party that owns
such Regulatory Approval, at such Party’s sole cost, unless the Parties
otherwise agree.

 

8.2     Inspections; Regulatory Action. The transfer of the 510(k) Clearance
from Isoray to GT MED TECH as contemplated under the Original Agreement has been
completed. During the Term of this Agreement, GT MED TECH may periodically (but
no more frequently than once per calendar year absent an inspection ‘for cause’)
conduct an audit of Isoray’s manufacturing facility for the Product and quality
systems relating to the manufacture of the Product in order to verify the
adherence of Isoray to the Quality Agreement and this Agreement. Any such audit
shall be during normal business hours and at GT MED TECH’s cost and expense, and
GT MED TECH shall provide a minimum of thirty (30) days written notice prior to
scheduling of any such audit. Additionally, Isoray shall cooperate with any
inspection by a Regulatory Authority relating to the Products and, to the extent
practicable, shall give GT MED TECH advance notice of any such inspection. Each
Party shall notify the other Party promptly in writing in the event such Party
learns that any action has been taken or threatened by a Regulatory Authority
relating to the use, sale, manufacture or storage of Products. To the extent
permitted by applicable law, Isoray shall provide GT MED TECH copies of
communications with any Regulatory Authority relating to the Products; provided,
however, Isoray may redact from such copies proprietary information not yet
disclosed to GT MED TECH. To the extent permitted by applicable law, GT MED TECH
shall provide Isoray copies of communications with any Regulatory Authority
relating to the Products, solely to the extent such communications relate to
Seeds or manufacturing activities undertaken by or on behalf of Isoray;
provided, however, GT MED TECH may redact from such copies any proprietary
information relating to GT MED TECH products other than the Product.

 

 

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

 

 

8.3     Compliance with Laws. Isoray shall supply Products that are manufactured
in compliance with all Applicable Laws, including without limitation all
Applicable Laws relating to the transportation, storage, use, handling and
disposal of hazardous materials. Isoray represents and warrants to GT MED TECH
that Isoray shall obtain and maintain all site licenses and government permits,
including without limitation health, safety and environmental permits, necessary
for the conduct of the actions and procedures undertaken to manufacture the
Products in accordance with Applicable Laws and the Quality Control Procedures.

 

8.4     Records and Samples. Isoray shall keep, or cause to be kept, complete,
accurate and authentic accounts, notes, data and records pertaining to the
manufacture, processing, testing, labeling, storage, and distribution of the
Products, including without limitation master production and control records, in
accordance with applicable laws and regulations. Isoray shall retain, or cause
to be retained, such records for a period of five (5) years following the date
of manufacture, or longer if required by law, and upon request, shall make
available to GT MED TECH copies of such records. After such time period, Isoray
shall notify GT MED TECH prior to the destruction of any records retained under
this Section 8.4 and, at GT MED TECH’s request, shall transfer such records to
GT MED TECH.

 

8.5     Recalls.

 

(a)     In the event GT MED TECH should be required or should voluntarily decide
to initiate a product recall, product withdrawal, field correction, or advisory
notice with respect to any of the Products manufactured by Isoray pursuant to
this Agreement (in each case, a “Recall”), GT MED TECH shall notify Isoray. In
conjunction with such Recall, and at GT MED TECH’s request, Isoray shall assist
in the investigation of Recalls to determine the cause and extent of the problem
and the Parties shall cooperate with each other concerning the necessity and
nature of such action. Recalls shall be the responsibility of GT MED TECH and GT
MED TECH shall bear all expenses connected therewith, except to the extent such
Recall results from manufacturing defects on the part of Isoray, and Isoray
shall bear the expenses of the Recall to the extent the Recall results from
manufacturing defects on the part of Isoray. For the purposes of this Agreement,
the expenses of the Recall will include, without limitation, all expenses for
notification of customers (and patients if required) and the destruction or
return of the recalled Product, as well as all reasonable out-of-pocket costs
and expenses incurred by GT MED TECH and Isoray.

 

(b)     In the event that Isoray independently believes that a Recall for any of
the Products may be necessary or appropriate, Isoray shall notify GT MED TECH.
The Parties shall discuss in good faith the necessity and nature of such action;
however, the decision to initiate any Recall involving any of the Products shall
be in GT MED TECH’s sole discretion. In the event that GT MED TECH decides to
initiate under this Section 8.5(b) any Recall involving any of the Products, the
coordination thereof shall be handled by GT MED TECH, whether or not such action
was initially requested by Isoray. The expenses of any such Recall shall be
handled as provided in Section 8.6(a).

 

 

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9.

Confidentiality.

 

9.1     Confidential Information. Subject to the limitations set forth in
Section 7.2, all information that is disclosed by one Party (the “Disclosing
Party”) to the other Party (the “Receiving Party”) under this Agreement shall be
deemed to be “Confidential Information” of the Disclosing Party. Confidential
Information may include, without limitation, trade secrets, ideas, unpublished
patent applications, data, processes, formulae, programs, compounds, know-how,
improvements, designs, information regarding plans for research development,
business plans, customer lists, marketing and sales strategies, financial
records, and budgets, whether disclosed in oral, written, graphic, or electronic
form.

 

9.2     Exceptions to Confidential Information. The term “Confidential
Information” shall not be deemed to include information that: (a) is in the
public domain or comes into the public domain through no fault of the Receiving
Party; (b) is furnished to the Receiving Party on a non-confidential basis by a
third party rightfully in possession of such information and not subject to a
duty of confidentiality with respect thereto; (c) was already known by the
Receiving Party prior to the time of receiving such Confidential Information, as
evidenced by the Receiving Party’s prior written records; or (d) was
independently developed by the Receiving Party without use of or access to the
Confidential Information of the Disclosing Party.

 

9.3     Non-Disclosure and Non-Use of Confidential Information. The Receiving
Party shall hold all Confidential Information confidential until such
Confidential Information is no longer deemed confidential under Section 9.2
above, the Receiving Party shall maintain all Confidential Information in strict
trust and confidence and shall not disclose any Confidential Information to any
third party or use any Confidential Information received except as may be
authorized by the Disclosing Party’s prior written consent. The Receiving Party
may use Confidential Information only to the extent required to perform its
obligations or exercise its rights under this Agreement, and for no other
purpose. In particular, neither Party shall file any patent application
containing any disclosure or patent claim, the subject matter of which is
derived from the other Party’s Confidential Information. Neither Party shall use
the other Party’s Confidential Information for any purpose or in any manner that
would constitute a violation of any laws or regulations of the United States.
Nothing in this Agreement grants either Party the right to retain, distribute,
or commercialize any Confidential Information of the other Party (except that GT
MED TECH has the right to distribute and commercialize Products purchased from
Isoray hereunder). Each Party, prior to disclosure of any Confidential
Information of the other Party to any employee, consultant or advisor shall
ensure that such person is bound by confidentiality provisions that are no less
stringent than those set forth in this Article 9.

 

 

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

 

 

9.4     Third Party Confidential Information. Neither Party shall disclose to
the other Party any confidential or proprietary information that belongs to any
third party unless the Disclosing Party first obtains the consent of such third
party. Neither Party shall represent to the other Party as being unrestricted
any designs, plans, models, samples, or other writings or products that such
Party knows are covered by valid patent, copyright, or other form of
intellectual property protection belonging to a third party.

 

9.5     Publicity. Except for such disclosure as is deemed necessary, in the
reasonable judgment of a Party, to comply with applicable laws, rules and
regulations, no announcement, news release, public statement, publication or
presentation relating to the existence of this Agreement, the subject matter
hereof, or either Party’s performance hereunder will be made without the other
Party’s prior written approval. Such obligations are in addition to the
restrictions set forth above with respect to disclosures of the other Party’s
Confidential Information.

 

10.

Representations and Warranties.

 

10.1     Mutual Representations and Warranties. In addition to other warrants
and representations set forth in this Agreement, each Party represents and
warrants as follows:

 

(a)     Existence and Power. It is duly organized, validly existing and in good
standing under the laws of the state or country in which it is organized.

 

(b)     Due Authorization and Enforcement of Obligations. It has the power and
authority and the legal right to enter into this Agreement to perform its
obligations under this Agreement, and has taken all necessary action on its part
to authorize the performance of such obligations. This Agreement has been duly
executed and delivered on behalf of such Party, and constitutes a legal, valid,
binding obligation, enforceable against such Party in accordance with its terms.

 

(c)     No Conflict. The execution and delivery of this Agreement and the
performance of such Party’s obligations under this Agreement (a) do not conflict
with or violate any requirement of Applicable Laws and (b) do not conflict with,
or constitute a default, or require any consent under any contractual obligation
of such Party.

 

10.2     Isoray Representations and Warranties.

 

(a)     Product Warranty. Isoray warrants that all Products delivered under this
Agreement shall, at time of delivery, (i) conform to the Specifications; and
(ii) be free and clear of any and all liens or other encumbrances.

 

(b)     No Debarred Person. Isoray represents and warrants that it shall not
employ, contract with, or retain any person directly or indirectly to perform
activities under this Agreement if such is debarred by the FDA under 21 U.S.C. §
335a(a) or disqualified as described in 21 C.F.R. § 812.119. In addition, Isoray
represents and warrants that it has not engaged in any conduct or activity which
could lead to any such debarment actions. If Isoray learns during the Term that
this representation needs to be amended in light of new information, Isoray
shall promptly notify GT MED TECH of same and shall take prompt action to remedy
the situation.

 

 

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

 

 

10.3     DISCLAIMER. THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS
ARTICLE 10 ARE THE SOLE AND EXCLUSIVE REPRESENTATIONS AND WARRANTIES MADE BY
EITHER PARTY UNDER THIS AGREEMENT, AND NEITHER PARTY MAKES ANY OTHER
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED OR ARISING BY LAW, INCLUDING,
BUT NOT LIMITED TO, ANY IMPLIED WARRANTY ARISING FROM THE COURSE OF PERFORMANCE,
COURSE OF DEALING OR USAGE OF TRADE.

 

11.

Indemnification.

 

11.1     Indemnification by Isoray. Isoray shall indemnify, defend and hold GT
MED TECH, its Affiliates, and their respective directors, officers, employees
and agents (“GT MED TECH Indemnitees”) harmless from and against all losses,
damages, costs and expenses (including reasonable legal expenses and attorneys’
fees and expenses) (collectively, the “Losses”) incurred by GT MED TECH as a
result of Third Party claims, demands, suits, or actions (each, a “Claim”)
brought against GT MED TECH to the extent such Losses result from (a) the gross
negligence or willful misconduct of any Isoray Indemnitee or any of Isoray’s
subcontractors; or (b) any breach of Isoray’s obligations, warranties,
representations, or covenants under this Agreement. Notwithstanding the
foregoing, Isoray shall not be obligated to indemnify GT MED TECH to the extent
any Claims or Losses are based on (i) any breach of GT MED TECH’s obligations,
warranties, representations, or covenants under this Agreement; or (ii) the
gross negligence or willful misconduct of any GT MED TECH Indemnitee.

 

11.2     Indemnification by GT MED TECH. GT MED TECH shall indemnify, defend and
hold Isoray, its Affiliates, and their respective directors, officers, employees
and agents (“Isoray Indemnitees”) harmless from and against all Losses incurred
by Isoray as a result of Claims brought against Isoray to the extent such Losses
result from (a) the handling, possession, use, marketing, promotion,
distribution or sale of any Product by GT MED TECH or any of its distributors
following delivery of the Product by Isoray under this Agreement; (b) any
personal injury (including death) or property damage resulting from the use,
sale, or other disposition of the Products; (c) any breach of GT MED TECH’s
obligations, warranties, representations, warranties, or covenants under this
Agreement; or (d) the gross negligence or willful misconduct of any GT MED TECH
Indemnitee. Notwithstanding the foregoing, GT MED TECH shall not be obligated to
indemnify Isoray to the extent any Claims or Losses are based on (i) any breach
of Isoray’s obligations, warranties, representations, warranties, or covenants
under this Agreement, or (ii) the gross negligence or willful misconduct of any
Isoray Indemnitee or any of Isoray’s subcontractors hereunder.

 

11.3     Indemnification Procedures. If either Party is entitled to
indemnification under this Article 11(the “Indemnified Party”), it shall give
written notice to the Party providing indemnification (the “Indemnifying Party”)
of any Claim that may be subject to indemnification promptly after learning of
such Claim, and the Indemnifying Party shall assume the defense of such Claim.
The Indemnifying Party will not be subject to any liability for any settlement
of such Claim made by the Indemnified Party without the Indemnifying Party’s
consent (but such consent will not be unreasonably withheld or delayed), and
will not be obligated to pay the fees and expenses of any separate counsel
retained by the Indemnified Party with respect to such Claim. The Indemnifying
Party shall not settle a Claim covered by indemnification without the consent of
the Indemnified Party (such consent not unreasonably withheld or delayed) if
such settlement would impose any monetary obligation on any Indemnified Party’s
Indemnitee or require the Indemnified Party or any of the related indemnitees
(GT MED TECH Indemnitees if GT MED TECH is the Indemnified Party, and Isoray
Indemnitees if Isoray is the Indemnified Party) to submit to an injunction or
otherwise limit the Indemnified Party’s rights under this Agreement.

 

11.4     Insurance. During the Term and for three (3) years thereafter, each
Party shall maintain in effect and good standing a comprehensive general
liability insurance issued by a reputable insurance company in the amount of at
least $2,000,000 for claims in the aggregate, and such policy shall name the
other Party as an additional insured. Each Party shall promptly notify the other
Party of any actual or anticipated changes in its insurance policy that would
result in such Party’s non-compliance with this Section 11.4.

 

 

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

 

 

12.

Term and Termination.

 

12.1     Term. This Agreement will become effective upon the Effective Date and
will continue in effect for ten (10) years, unless earlier terminated in
accordance with this Article 12 (the period during which this Agreement remains
in effect, the “Term”).

 

12.2     Termination for Insolvency, Bankruptcy. Either Party may, at its
option, terminate this Agreement immediately upon written notice to the other
Party, in the event that such other Party (i) becomes insolvent or unable to pay
its debts when due; (ii) files a petition in bankruptcy, reorganization or
similar proceeding or has such a petition filed against it, which petition is
not removed within ninety (90) days; (iii) discontinues it business; (iv) has a
receiver appointed over all or a part of its assets; or (v) makes an assignment
for the benefit of its creditors.

 

12.3     Termination Upon Breach. Either Party may, at its option, terminate
this Agreement in the event of a material breach by the other Party. Such
termination may be effected only through a written notice to the breaching
Party, specifically identifying the breach or breaches on which such notice of
termination is based. The breaching Party will have a right to cure such breach
or breaches within sixty (60) days of receipt of such notice, and this Agreement
will only terminate pursuant to this Section 12.3 in the event that such cure is
not made within such sixty (60)-day period.

 

12.4     Mutual Agreement for Early Termination.     The Parties may terminate
this Agreement upon mutual written agreement providing a ninety (90) days
termination period.

 

12.5     Survival. The provisions of Sections 8.4, 8.5, 12.5, and 12.6, and
Articles 1, 7, 9, 11, and 13 will survive the expiration or termination of this
Agreement.

 

12.6     Effects of Termination. Upon termination or expiration of this
Agreement, (a) each Party will return and cease use of any Confidential
Information of the other Party received under this Agreement; (b) each Party
will promptly pay to the other, without offset or deduction, all amounts due and
remaining unpaid as of the date of such termination or expiration; (c) Isoray
shall complete all work in process, fulfilling pending purchase orders as of the
termination or expiration date; (d) GT MED TECH shall pay invoices for such
Products shipped under such pending purchase orders; and (e) the Parties shall
cooperate on the return of Tools from Isoray’s facilities to a location
designated by GT MED TECH.

 

 

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

 

 

13.

Miscellaneous Provisions.

 

13.1     Entire Agreement. This Agreement (including the Exhibits attached,
which are hereby incorporated and made part of this Agreement) sets forth the
entire agreement and understanding between the Parties with respect to the
subject matter of this Agreement and supersedes and merges all prior oral and
written agreements, discussions and understandings between the Parties with
respect to the subject matter of this Agreement, and neither of the Parties will
be bound by any conditions, inducements or representations other than as
expressly provided for in this Agreement.

 

13.2     Independent Contractors. In making and performing this Agreement, the
Parties act and will act at all times as independent contractors, and, except as
expressly set forth in this Agreement, nothing contained in this Agreement will
be construed or implied to create an agency, partnership or employer and
employee relationship between the Parties. Except as expressly set forth in this
Agreement, at no time will either Party make commitments or incur any charges or
expenses for, or in the name of, the other Party.

 

13.3     Notices. All notices and other communications provided for hereunder
will be in writing and will be mailed by first-class, registered or certified
mail, postage paid, or delivered personally, by overnight delivery service or by
facsimile, with confirmation of receipt, addressed as follows:

 

If to Isoray:

Isoray Medical, Inc.

350 Hills St, Ste #106

Richland, WA 99354

Attn: Chief Executive Officer

 

If to GT MED TECH:

GT Medical Technologies, Inc.

1809 S. Holbrook Lane, Suite 107

Tempe, AZ 85281

Attn: President

 

 

or addressed to such other address as that Party may have given by written
notice in accordance with this provision. Notices sent by facsimile will be
effective upon confirmation of receipt, notices sent by mail or overnight
delivery service will be effective upon receipt of delivery, and notices given
personally will be effective when delivered.

 

 

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

 

 

13.4     Amendments; Modifications. This Agreement may not be amended or
modified except in a writing duly executed by both Parties.

 

13.5     Waiver. Any waiver (express or implied) by either Party of any breach
of this Agreement shall not constitute a waiver of any other or subsequent
breach and shall in no way impair the rights of the Party granting such waiver
in any other respect or at any other time. Any delay or forbearance by either
Party in exercising any right hereunder will not be deemed a waiver of that
right.

 

13.6     Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to any
choice of law principles that would require the application of the laws of a
different jurisdiction.

 

13.7     Limitation of Liability. IN NO EVENT (OTHER THAN BREACH OF
CONFIDENTIALITY, ARTICLE 9 WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR
ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES,
OR FOR ANY LOST PROFITS IN CONNECTION WITH THIS AGREEMENT, EVEN IF ADVISED OF
THE POSSIBILITY OF THE SAME, HOWEVER CAUSED AND REGARDLESS OF THEORY OF
LIABILITY, WHETHER TORT, CONTRACT, OR STRICT LIABILITY. NOTWITHSTANDING THE
FOREGOING, NOTHING IN THE PRECEDING SENTENCE WILL BE CONSTRUED TO LIMIT OR
MODIFY EITHER PARTY’S INDEMNITY OBLIGATIONS PURSUANT TO ARTICLE 11.
ADDITIONALLY, IN NO EVENT SHALL ISORAY’S AGGREGATE LIABILITY UNDER THIS
AGREEMENT EXCEED THE TOTAL OF ALL AMOUNTS ACTUALLY PAID BY GT MED TECH TO ISORAY
UNDER THIS AGREEMENT DURING THE TWELVE (12) MONTHS PRECEDING THE EVENT GIVING
RISE TO THE LIABILITY. The Parties agree that the foregoing liability cap shall
not apply to any liabilities arising from Isoray’s gross negligence or willful
misconduct or any liabilities involving personal injury or death arising from
Isoray’s negligence in manufacturing the Product. The Parties acknowledge that
the limitations of liability in this Section 13.7 and the allocation of risk
herein are an essential element of the bargain between the Parties, without
which Isoray would not have entered into this Agreement.

 

13.8     Use of Name. No right, except as expressly provided for in this
Agreement, is granted by this Agreement to either Party to use in any manner the
name of the other or any other trade name, logo, or trademark of the other in
connection with the performance of this Agreement.

 

13.9     Headings; Interpretation. The headings in this Agreement are inserted
merely for the purpose of convenience and will not affect the meaning or
interpretation of this Agreement. This Agreement will be construed fairly
according to its terms, without regard to the identity of the drafter of any
provision in this Agreement.

 

13.10     Cumulative Remedies. Termination of this Agreement, regardless of
cause or nature, will be without prejudice to any other rights or remedies of
the Parties as provided for in this Agreement and will be without liability for
any loss or damage occasioned thereby.

 

 

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13.11     Assignment. Neither Party may assign or transfer this Agreement or any
rights or obligations hereunder without the prior written consent of the other,
except a Party may make such an assignment without the other Party’s consent to
a successor-in-interest to substantially all of the business assets of such
Party to which this Agreement relates, whether in a merger, sale of stock, sale
of assets or other transaction. Any permitted assignment shall be binding on the
successors of the assigning Party and any permitted successor or assignee of
rights and/or obligations hereunder shall, in writing to the other Party,
expressly assume performance of such rights and/or obligations. Any assignment
or attempted assignment by either Party in violation of the terms of this
Section 13.11 shall be null and void and of no legal effect. This Agreement
shall be binding upon and shall inure to the benefit of each Party’s
successors-in-interest and permitted assigns.

 

13.12     Severability. If any provision of this Agreement is invalid or
unenforceable for any reason in any jurisdiction, such provision will be
construed to have been amended to the minimum extent necessary to cure such
invalidity or unenforceability. The invalidity or unenforceability of one or
more of the provisions contained in this Agreement will not have the effect of
rendering any such provision invalid or unenforceable in any other case,
circumstance or jurisdiction, or of rendering any other provisions of this
Agreement invalid or unenforceable whatsoever.

 

13.13     English Language. This Agreement was prepared in the English language,
which language shall govern the interpretation of, and any dispute regarding,
the terms of this Agreement.

 

13.14     Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed will be deemed to be an original
and all of which when taken together will constitute one Agreement.

 

14.     Privacy of Patient Specific Health Information.   To the extent
GammaTile™ Product order forms disclose or contain patient-specific health
information (“PHI”), Isoray represents it has, and will operate under,
appropriate process(es) to receive and secure the use, disclosure and retention
of such PHI in accordance with applicable state and federal laws and
regulations. As requested, Isoray shall cooperate and execute documentation as
requested by end users of the ordered Product relative to the receipt, use,
disclosure, security and retention of such PHI as included in such end users’
GammaTile™ Product order forms. Except, and unless GT MED TECH signs a Business
Associates Agreement (“BBA”) with Isoray Medical, Inc. even in the event of a
Product recall, other regulatory event, or at the direction of an end user,
Isoray will not disclose or otherwise share PHI with GT MED TECH unless directed
to by the Patient related to their PHI specific information.

 

[Remainder of page intentionally blank. Signature page follows.]

 

 

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IN WITNESS WHEREOF, the Parties have caused their respective authorized
representatives to execute this Agreement as of the Effective Date set forth
above.

 

 

GT MEDICAL TECHOLOGIES, Inc.     Isoray Medical, Inc.

 

 

 

By (Signature): /s/ Hernan Lopez           By (Signature): /s/ Jonathan
Hunt               

 

Name (Printed): Hernan Lopez                       Name (Printed): Jonathan Hunt

 

Title: VP of Operations              Title:
CFO                                                      

 

 

 

Attachments:

Exhibit A: Specifications

Exhibit B: Pricing & Open Book Pricing Formula

Exhibit C: Inventory Summary

Exhibit D: RMA Procedure

Exhibit E: Project Overviews

Exhibit F: Key Performance Indicators

 

 

 

  

 

 

Signature Page for Amended and Restated Manufacturing & Supply Agreement

 

 

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Exhibit A

Specifications

 

A single GammaTileTM unit is comprised of four Cesium-131 radioactive seeds
loaded into a Vicryl® (polyglactin 910) strand and embedded in collagen matrix
material.

 

GT-03: A GammaTileTM 3 Pack is comprised of three GammaTileTM units, all
contained in one outer pouch for aseptic presentation, labeled and sterilized.

 

GT-06: A GammaTileTM 6 Pack is comprised of two GammaTileTM 3 Packs.

 

[ex_142542img001.gif]

 

 

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Exhibit B

Open-Book Pricing Formula & Pricing Schedule

 

Open-Book Pricing Formula for GammaTile™ 3-pack Product

 

Description

Price (US$)

Materials (excluding Duragen)

111.93

Labor

[**]

50% Profit Margin

[**]

Seeds (high activity 3.5U Cesium-131 source – assumes 4 seeds per GammaTile)

[**]

Overhead*

[**]

   

Total price of each GammaTile™ 3-pack Product

[**]

 

 

Open-Book Pricing Formula for Duragen Validation

 

Description

Price (US$)

Materials (excluding Duragen)

28.62

Labor

[**]

50% Profit Margin

[**]

Simulation Seeds

[**]

Overhead

[**]

   

Total price of each Duragen Validation

[**]

 

Pass-Through Costs

●

Sterilization: Sterilization costs shall be billed either directly to GT MED
TECH or invoiced as a separate line item as a pass-through cost by Isoray. No
mark-up to sterilization or other pass-through costs for the Product will be
assessed by Isoray.

●

Bacterial Endotoxin Testing: Bacterial Endotoxin Testing (“BET”) costs shall be
billed either directly to GT MED TECH or invoiced as a separate line item as a
pass-through cost by Isoray. No mark-up to BET or other pass-through costs for
the Product will be assessed by Isoray.

 

*The Overhead charge is to compensate Isoray for assistance with facility
radioactive materials licenses, customer support activities, quality assurance
and regulatory assurance including upkeep of supplier qualifications (not
including site visits and audits), risk assessments, and compliance maintenance,
and general administration associated with the pass-through costs.

 

 

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Exhibit C

Inventory Summary Report

 

Part Number

Item Description

Lot No

Qty (tiles)

Status

Comments

3094

DuraGen 4x5

3167986

21

Released

tiles cut 1/24/19

           

 

 

 

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Exhibit D

RMA Procedure

 

See following page

 

 

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[ex_142542img002.gif]

 

 

 

 

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Exhibit E

Projects Overviews

 

Process Improvement Project: Cost of Goods Sold

 

Sub-lot with bioburden – Extend the shelf life of cut collagen from 7 days to 8
weeks

Collagen Yield Improvement – Update sub-lot release process to validate the
process and implement in process monitoring

Packaging Phase 1 - 6 Pack – Design and implement a packaging configuration that
allows for 6 tiles to be packaged within one box

Process Validation – Validate the process and remove in process monitoring

Cutter Improvement – Improve the cutter to decrease usage scrap from 34% to 10%

Needle Improvement – Improve assembly scrap by 50%

In House BET Testing – Bring BET Testing in house

Target: 50% reduction in Cost of Goods sold by Jan 2020

 

 

Process Improvement Project: Establish feasibility of alternate source collagen
material

 

Project will develop and prove feasibility of an alternate carrier, ending in a
Feasibility Phase exit.

Target: Successful test establishing feasibility of alternative source and
collagen material by Jan 2020

 

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Exhibit F

Key Performance Indicator & Scorecard

 

 

KPI: Order Fill Rate

Order Fill Rate will be defined as a delivery of product received by end user
with correct quantity & specific Product and delivered at the required delivery
date noted on the Purchase Order

 

Target: 98% of all Purchase Orders delivered to GT MED TECH’s designated shipper
with correct quantity and specific Product as ordered on the required shipping
date as noted on the Purchase Order

 

Measure: Quarterly in a bar graph format