Exhibit 10.1

** CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A
CONFIDENTIAL TREATMENT REQUEST UNDER 17 C.F.R. SECTIONS 24b-2, 200.80 (B)(4) AND
230.406.

SUPPLY AGREEMENT

by and between

SYNTHES USA SALES, LLC

and

KNC NOR ACQUISITION SUB, INC.

Dated as of May 24, 2011

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TABLE OF CONTENTS

 

             Page  

1.

  DEFINITIONS      4   

2.

  MANUFACTURING AND SALE      6      2.1.   Exclusivity Requirements      6     
2.2.   Products      7      2.3.   Forecasts      7      2.4.   Per-Order
Minimums      7      2.5.   Manufacturing      7      2.6.   Transfer Price;
Terms      8      2.7   Reserve Inventory      10      2.8.   Manufacturing
Right      10   

3.

  OWNERSHIP OF INTELLECTUAL PROPERTY      11   

4.

  LICENSE GRANTS AND GRANT CONSIDERATION      11      4.1.   By KNC      11     
4.2.   By Synthes      11      4.3.   No Other Rights      12      4.4.   Term
Of Licenses      12   

5.

  CLINICAL DEVELOPMENT, MARKETING AND REGULATORY MATTERS      12      5.1.  
General Responsibility      12      5.2.   Regulatory Approvals      12     
5.3.   MDR and Complaints      12      5.4.   Removals and Corrections (Recalls)
     13   

6.

  INFRINGEMENT ACTIONS      13      6.1.   Infringement Notification      13   
  6.2.   Infringement Defense      14      6.3.   Third Party Infringement     
14   

7.

  CONFIDENTIAL INFORMATION      14      7.1.   Confidential Information      14
     7.2.   Permitted Disclosures      15   

8.

  INDEMNIFICATION      15      8.1.   KNC Indemnified Parties      15      8.2.
  Synthes Indemnified Parties      16      8.3.   Indemnification Procedures   
  16   

9.

  TERM AND TERMINATION      17      9.1.   Term      17      9.2.   Termination
     17   

 

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   9.3.    Survival    18 10.    REPRESENTATIONS AND WARRANTIES    18    10.1.
   Representations and Warranties of Each Party    18    10.2.   
Representations and Warranties of KNC    19    10.3.    Representations and
Warranties of Synthes    19    10.4.    No Additional Warranties    19 11.   
MISCELLANEOUS    19    11.1.    Relationship of Parties    19    11.2.    Public
Announcements    19    11.3.    Entire Agreement    20    11.4.    Further
Actions    20    11.5.    Waiver    20    11.6.    Severability    20    11.7.
   Headings    20    11.8.    Execution in Counterparts    20    11.9.   
Amendments    20    11.10.    Assignment    20    11.11.    Notices    21   
11.12.    Force Majeure    21    11.13.    Limitation of Liability    22   
11.14.    Dispute Resolution    22    11.15.    No Third Party Rights    22   
11.16.    Change of Control    22

 

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SUPPLY AGREEMENT

This Supply Agreement (this “Agreement”), dated as of May 24, 2011 (“Effective
Date”), is made and entered into by and between Synthes USA Sales, LLC, having
its principal place of business at 1302 Wrights Lane East, West Chester,
Pennsylvania 19380 (“Synthes”), and KNC NOR Acquisition Sub, Inc. (“KNC” or
“Supplier”), a subsidiary of Kensey Nash Corporation, having its principal place
of business at 735 Pennsylvania Drive, Exton, PA 19341.

Background

WHEREAS, Synthes has developed certain products as more specifically set forth
in Exhibit 1.7, and as further defined below; and

WHEREAS, KNC and Norian Corporation (an Affiliate of Synthes) have entered into
an Asset Purchase Agreement dated May 24, 2011 (the “Purchase Agreement”) and
one of the conditions to closing under that Purchase Agreement (“Closing”) is
that Synthes and Supplier shall execute and deliver this Agreement; and

WHEREAS, following the Closing, KNC has agreed to manufacture and sell the
Exclusive Products exclusively to Synthes and Synthes has agreed to purchase all
of its requirements of Products from Supplier, all on the terms set forth in
this Agreement;

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
and agreements hereinafter set forth, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound, the parties hereby agree
as follows:

 

1. DEFINITIONS

1.1. “Additional Products” shall mean all Products other than any Initial
Products.

1.2. “Affiliate” shall mean with respect to any party, any other entity that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with such party. As used in this
definition, the term “control” means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
person or entity, whether through ownership of voting securities, by contract,
or otherwise.

1.3. “Binding Forecast” shall have the meaning set forth in Section 2.3.

1.4. “Confidential Information” shall have the meaning set forth in Section 7.

1.5. “Conveyed Patents” shall mean those Norian-owned patents conveyed to KNC by
Synthes under the Purchase Agreement.

1.6. “Cost” for a Product shall mean costs for materials and manufacturing,
excluding SG&A, determined in accordance with U.S. GAAP.

1.7. “Exclusive Product” shall mean each product set forth in Exhibit 1.7, which

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may be amended as the parties agree.

1.8. “FDA” shall mean the United States Food and Drug Administration.

1.9. “Forecast” shall have the meaning set forth in Section 2.3.

1.10. “Future Synthes Affiliate” means any person or entity who, as of the date
hereof, is not an Affiliate of Synthes but who, during the Term, becomes an
Affiliate of Synthes as a result of the acquisition of more than 50% of the
stock of Synthes or any Affiliate of Synthes (including, without limitation, by
way of a merger, exchange, tender offer or any other type of business
combination) or substantially all of the assets of Synthes or any Affiliate of
Synthes.

1.11. “Initial Forecast” shall mean the forecast for the initial year of the
Agreement, as set forth on Exhibit 1.11.

1.12. “Initial Products” shall mean all Products set forth on Exhibit
2.6.1(a)-1.

1.13. “Intellectual Property” shall mean any and all patents, inventions,
copyrights, trademarks, trade secrets, know-how, and any other proprietary or
confidential information.

1.14. “KNC Intellectual Property” shall mean all Intellectual Property invented,
conceived, developed and/or reduced to practice by KNC’s employee(s),
consultant(s) or other agent(s), solely or jointly with a third party who is not
a party to this Agreement, or acquired by KNC (including the Intellectual
Property acquired by KNC in connection with the transactions contemplated by the
Purchase Agreement), which directly and substantially relates to a Product.

1.15. “Law” shall mean any United States or non-United States federal, national,
supranational, state, provincial, local or similar law, ordinance, regulation,
rule, code, order, or requirement.

1.16. “Manufacturing Right” shall have the meaning set forth in Section 2.8.3.

1.17. “Product” shall mean all Exclusive Products and Related Products.

1.18. “Related Product” shall mean any product, including any line extension or
improvement to a Product, that (a) is covered by (i) Synthes Intellectual
Property that is related to an Exclusive Product, or (ii) the Conveyed Patents,
(b) is used for the same indication as the Exclusive Product, and (c) utilizes
substantially similar raw materials and manufacturing process as an Exclusive
Product. Notwithstanding the foregoing, any product that would otherwise be
deemed a Related Product due to clauses (a)(ii), (b) and (c) above, but that
does not compete with any other Product, shall not be deemed a Related Product.

1.19. “Revenue” shall mean all revenue received, minus all taxes (other than
income taxes) paid, freight charges paid, discounts (other than pursuant to
Section 2.6.1(b) below) given, Product returns and other allowances made in
connection with such revenue, in each case as calculated in accordance with GAAP
and consistent with the past practices of KNC.

1.20. “Saleable Products” shall mean finished, packaged and sterilized Product

 

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meeting all Specifications and complying with all applicable FDA and Medical
Device Directive requirements.

1.21. “Specifications” shall mean specifications for the Products delivered by
Synthes to KNC via electronic transmission at 10:53 a.m. Eastern time on
April 27, 2011, which may be amended as the parties agree.

1.22. “Supply Minimum” shall mean KNC’s failure to supply Saleable Products in
an amount of at least seventy-five percent (75%) of the aggregate Binding
Forecasts for Saleable Products for any six (6) consecutive month period.

1.23. “Synthes Intellectual Property” shall mean all Intellectual Property
invented, conceived, developed and/or reduced to practice by Synthes or any
Affiliate of Synthes (other than a Future Synthes Affiliate), or any
employee(s), consultant(s) or other agent(s) of Synthes or any Affiliate of
Synthes (other than a Future Synthes Affiliate), solely or jointly with a third
party who is not a party to this Agreement, or acquired by (including any
license or sublicense from a third party) Synthes or any Affiliate of Synthes
(other than a Future Synthes Affiliate), which directly and substantially
relates to a Product or the manufacture of a Product, but excluding any
Intellectual Property acquired by KNC in connection with the transactions
contemplated by the Purchase Agreement; provided that, in the event that
Intellectual Property necessary to manufacture a Product is invented, conceived,
developed and/or reduced to practice by a Future Synthes Affiliate with the
intent, in whole or in part, of such Intellectual Property not being deemed
Synthes Intellectual Property, then such Intellectual Property shall be deemed
Synthes Intellectual Property.

1.24. “Term” shall have the meaning set forth in Section 9.1.

1.25. “Transfer Price” shall have the meaning set forth in Section 2.6.1.

 

2. MANUFACTURING AND SALE

2.1. Exclusivity and Non-Compete Requirements.

2.1.1. During the Term, Synthes agrees to purchase from KNC, and KNC agrees to
deliver to Synthes, all of Synthes’ and its Affiliates’ requirements for the
Products, all in accordance with the terms and conditions of this Agreement.
During the Term, Synthes shall use commercially reasonable efforts to market,
sell and distribute the Products. KNC shall not manufacture, sell or transfer
the Products to any party other than Synthes or as Synthes directs. With respect
to each of the Conveyed Patents, KNC agrees, on behalf of itself and all persons
who may subsequently acquire any rights in and to or under the Conveyed Patents,
other than Synthes or any Affiliate of Synthes, that from the Effective Date,
and until the earlier of the expiration of such patent or the termination of
this Agreement by KNC as a result of the occurrence of any event set forth in
Section 9.2.1, it shall not practice or otherwise use such Conveyed Patent to
develop, have developed, make, have made, manufacture, have manufactured,
commercialize, or have commercialized any product that competes with a Product.

 

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2.1.2. Notwithstanding anything to the contrary set forth in this Agreement, the
parties acknowledge that KNC manufactures, sells and transfers products that
incorporate the KNC Intellectual Property to companies that manufacture and/or
develop products that may compete with the Products (collectively, “KNC
Additional Business”). Subject to the limitations on use of the Synthes
Intellectual Property set forth in Section 4.2, nothing in this Agreement shall
preclude or otherwise limit KNC from engaging in KNC Additional Business.

2.2. Products.

The Exclusive Products will be initially those products identified on Exhibit
1.7. Exclusive Products may be added to Exhibit 1.7 as mutually agreed to by the
parties.

2.3. Forecasts.

Synthes shall provide to KNC each month a rolling forecast of its requirements
for Saleable Products, sales samples, training materials, and demonstration
materials for the following twelve (12) months (the “Forecasts”). The Forecast
for the first three months shall be binding (a “Binding Forecast”), and the
Forecast for the remaining nine months shall be a nonbinding estimate. Following
the initial Forecast, KNC shall have no obligation to fulfill an increase in
quantity of Products of more than ten percent (10%) over the forecast quantity
for the immediately preceding month.

2.4. Per-Order Minimums.

Consistent with Synthes’ current practice with respect to the manufacture of
Products, each purchase order provided by Synthes to KNC for a Product which has
an intermediate product shall be for a quantity which permits the manufacture of
not less than 150-300 units of intermediate product by unit size. Minimum orders
for a Product without an intermediate product shall be based on historical
practices. KNC may, but shall have no obligation to, fulfill an order that does
not meet the foregoing minimum order requirement. KNC shall promptly notify
Synthes if KNC rejects an order for failing to meet the minimum order
requirement.

2.5. Manufacturing.

2.5.1. KNC shall manufacture Products hereunder in conformance with the
Specifications and with industry-standard good manufacturing practices and
quality management procedures. Synthes shall have the right to reject any
Products or other items which do not conform to such Specifications; provided,
however, KNC shall have a reasonable time to cure any such deficiency which it
may confirm. In order to reject a shipment or portion thereof, Synthes must give
KNC, within sixty (60) days of receipt of shipment, a reasonably detailed
written statement of its reasons for rejection and, if available, Product
samples demonstrating the purported nonconformance and requesting that KNC
either remedy or provide a reasonable plan to promptly remedy such
nonconformance. If no such statement is received by KNC then Synthes shall be
deemed to have accepted the shipment of Product. In the event of timely
rejection by Synthes, KNC shall, within five (5) business days after receipt
thereof, notify Synthes whether it accepts Synthes’ notice of nonconformity or
it shall be deemed to accept such notice. However:

 

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2.5.2. If KNC disagrees with any purported nonconformity claimed by Synthes,
then both parties agree to cooperate in good faith and make every reasonable
effort to resolve the disagreement. If KNC confirms Synthes’ rejection, KNC
shall, at its sole expense and option, and in a reasonably prompt manner, either
replace returned nonconforming Product with conforming Product or refund to
Synthes the Transfer Price paid with respect thereto, if any; and

2.5.3. Product shall be returned to KNC in a manner and to the destination
prescribed by KNC. KNC shall provide written instructions for disposition of
rejected Product and cover all associated disposal or return shipping costs
within thirty (30) days of Synthes’ request for such instructions.

2.5.4. If the parties hereto fail to agree as to whether a delivered quantity of
Product meets its agreed Specifications, then the parties shall cooperate to
have the Product in dispute analyzed by a qualified independent testing
laboratory jointly selected by KNC and Synthes. The following provisions shall
apply with respect to the results indicated by such independent laboratory:

a. If the Product is determined to have met its Specifications, then Synthes
shall bear the costs of the independent laboratory testing and shall accept the
shipment of such Product and promptly pay for such Product if not yet paid; or

b. If the Product is determined not to meet its Specifications, then KNC shall,
at its sole expense and option, and in a reasonably prompt manner, either
replace the returned nonconforming Product with conforming Product or refund to
Synthes the Transfer Price paid with respect to thereto, if any, and KNC shall
bear the costs of the independent laboratory testing.

2.5.5. The Products shall be labeled consistent with Synthes’ standard
protocols, with the addition of “Manufactured by Kensey Nash Corporation” or
like language; provided, however, that all labeling will conform to all
applicable legal and regulatory requirements.

2.6. Transfer Price; Terms.

2.6.1.

a. The prices to be paid to KNC by Synthes (the “Transfer Price”) for Initial
Products shall be as set forth in Exhibit 2.6.1(a)-1, which prices may be
amended in accordance with this Section 2.6.1(a). Additional Products may be
added by mutual agreement of the parties to Exhibit 2.6.1(a)-2 and the Transfer
Price to be paid to KNC by Synthes for such Additional Products shall be as set
forth in Exhibit 2.6.1(a)-2, which prices may be amended in accordance with this
Section 2.6.1(a). Upon the mutual written agreement of the parties, KNC may
raise the Transfer Price by an amount up to the percentage increase of the
consumer price index (“CPI”) on a cumulative basis since the previous CPI
increase, no more frequently than once annually, upon ninety (90) days advance
notice. Additionally KNC may increase the Transfer Price, no more frequently
than once annually, in the event of a documented increase in the cost of the raw
materials used to produce the Products, which percentage increase for the
Transfer Price shall be

 

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no more than fifty percent (50%) of the actual increase in costs of the raw
materials and shall be proportional to the cost of the raw materials compared to
the costs of the entire Product (any such increase, a “Price Increase Resulting
from Raw Materials”). In the event that, due to changes in the marketplace,
Synthes reasonably believes that it is necessary to reduce the price of the
Products sold by Synthes to its customers, the parties agree to negotiate in
good faith with respect to a potential reduction in the Transfer Price for such
Products.

b. **

2.6.2. Synthes shall pay KNC for sales samples, training materials, and
demonstration materials purchased from KNC at the Transfer Price less ten
percent (10%).

2.6.3. All Products and other items purchased by Synthes from KNC shall be
shipped F.O.B. KNC’s facility in Exton, Pennsylvania. Synthes may request
specific non-shipping dates at the time of order placement or confirmation or
later as agreed (e.g., don’t ship on the last 5 days of the month).

2.6.4. The price of the Products sold by Synthes to its customers shall be
established by Synthes in its sole discretion, and Synthes shall have the full
power, authority, and discretion to change the price of the Products by either
raising or lowering the price as it shall see fit. Synthes shall follow its
normal business practices in establishing price, selling to and billing its
customers.

2.6.5. Synthes shall pay KNC the Transfer Price for Products delivered to
Synthes by KNC no later than forty-five (45) days after Synthes’ receipt of each
of KNC’s invoices.

2.6.6. During the 18 month period following the Effective Date, Synthes shall,
consistent with its historical practices, purchase raw materials from third
party suppliers, including, without limitation, Mathys, J.T. Baker, Covidien and
Purac, in sufficient quantity to enable KNC to meet the Supply Minimum with
respect to applicable Products, and timely

 

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provide such raw materials to KNC on pricing terms consistent with those
historically charged to Synthes (subject to any price increase for such raw
materials charged to Synthes by such third party suppliers, provided that
Synthes shall use reasonable efforts to oppose and minimize any such price
increase and shall negotiate in good faith on behalf of KNC with respect
thereto), which amount shall be offset against amounts otherwise payable by
Synthes to KNC hereunder. Synthes shall use its best efforts to transition to
KNC Synthes’ relationships with such third party suppliers of raw materials
other than Mathys. Synthes shall use reasonable efforts to assist KNC in
continuing the supply of raw materials from Mathys.

2.6.7. Credit to Synthes. As partial consideration for the transfer of the
Conveyed Patents under the Purchase Agreement, KNC shall, in each of its fiscal
years, credit to Synthes, any amounts paid to KNC under both (a) the License
Agreement entered into between Metra Orthopedics and Norian Corporation on
June 3, 1994, and (b) the License Agreement entered into between Howmedica and
Norian Corporation on December 16, 1992 (the “Royalties”), up to an amount equal
to one dollar ($1) multiplied by the number of units of Products (excluding item
number 40-0936) sold to Synthes by KNC (the “Unit Dollars”) in that fiscal year.
In the event that (x) the Unit Dollars in any given year exceeds the Royalties
in the same year (the difference between such Unit Dollars and Royalties shall
be the “Overage”), and in a subsequent year the Royalties exceed the Unit
Dollars, then the Overage shall be added to the Unit Dollars in calculating the
credit for such subsequent year.

2.7. Reserve Inventory.

KNC agrees to use commercially reasonable efforts to maintain a quantity of
Products equal to at least twenty-five percent (25%) of the twelve-month
Forecast provided pursuant to Section 2.3 (on a rolling basis) in an
intermediate unfinished state during the period beginning September 30, 2012
(provided that KNC shall in good faith attempt to comply with the foregoing
threshold beginning as of April 30, 2012) and ending as of the conclusion of the
Term.

2.8. Manufacturing Right.

2.8.1. Failure to Supply. KNC’s failure to meet the Supply Minimum with respect
to any Product category set forth on Exhibit 1.7 shall, with respect to such
Product category, constitute a Failure to Supply (a “Failure to Supply”),
subject to the following:

a. No Failure to Supply shall be deemed to occur unless the cumulative Binding
Forecasts for each of the three (3) years prior to the alleged period
constituting the Failure to Supply have increased year-to-year;

b. No Failure to Supply shall be deemed to occur by virtue of Synthes’ failure
to provide any Forecast or raw materials pursuant to Section 2.6.6;

c. No Failure to Supply shall be deemed to occur during any time in which any
payments due from Synthes to KNC are past due (except for payments which Synthes
is disputing in good faith); and

d. No Failure to Supply shall be deemed to occur in the event of a force majeure
event (as described in Section 11.12) declared by KNC, in which case

 

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KNC shall use its reasonable commercial efforts to reinstitute supply of
Products as soon as practicable, but in the event that the force majeure event
renders it likely that supply of Product will not be reinstated for one hundred
and twenty (120) days or more, KNC shall implement its standard procedures for
disaster recovery.

2.8.2. Right to Cure Failure to Supply. Prior to declaring a Failure to Supply
for other than a force majeure event, Synthes shall provide KNC written notice
of its intent to declare a Failure to Supply, the anticipated date of such
declaration and explaining in reasonable detail the basis of Synthes’ belief
that a Failure to Supply is imminent. No Failure to Supply shall be deemed to
exist if (i) within ten (10) days of such notice, KNC provides Synthes with
reasonable assurances that KNC can and will meet the Supply Minimum requirements
for the following twelve-month period, and (ii) for a period of three
(3) consecutive months from the anticipated date of such declaration KNC meets
the Supply Minimum requirements. KNC shall have no right to cure a Failure to
Supply if the Failure to Supply is a result of KNC’s intentionally withholding
Product from Synthes (absent any breach by Synthes).

2.8.3. Manufacturing Right. In the event of Failure to Supply, Synthes shall
have the right, following written notice to KNC, for the balance of the
then-present Initial Term or Renewal Term, to manufacture, or have manufactured
by a third party, any Product in the applicable Product category set forth on
Exhibit 1.7 (the “Manufacturing Right”). KNC shall provide reasonable assistance
to Synthes in establishing an alternative source of supply. The parties agree
that the remedy set forth in this Section 2.8.3 shall be Synthes’ sole remedy
with respect to a Failure to Supply, and Synthes shall not be permitted to
terminate this Agreement as a result of any such Failure to Supply.

 

3. OWNERSHIP OF INTELLECTUAL PROPERTY

Except as expressly set forth in this Agreement, each party retains all rights
to its own Intellectual Property.

 

4. LICENSE GRANTS AND GRANT CONSIDERATION

4.1. By KNC. Pursuant to and during the Term of this Agreement, KNC hereby
grants to Synthes a fully-paid (subject to Synthes’ payment obligations under
this Agreement), royalty-free, worldwide license to KNC Intellectual Property,
with the right to sublicense solely to its Affiliates, to use such Intellectual
Property solely and to the extent necessary to market, sell, and/or distribute
Products.

4.2. By Synthes. During the Term of this Agreement, Synthes hereby grants, and
shall cause its Affiliates to grant, to KNC an exclusive, fully paid,
royalty-free license to Synthes Intellectual Property, solely and to the extent
necessary to manufacture the Products, without the right to sublicense, provided
that KNC shall be permitted to sublicense such license to an Affiliate of KNC
solely to the extent necessary to manufacture the Products. For the avoidance of
doubt, Synthes shall ensure that any rights that Synthes or any of its
Affiliates grants to any party to use the Synthes Intellectual Property shall be
subject to the exclusive license grant set forth in the immediately preceding
sentence. For the avoidance of doubt, Synthes shall ensure that any lawful use
of the Synthes Intellectual Property shall be subject to the exclusive license

 

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set forth in this Section.

4.3. Manufacturing Grant. In the event that Synthes exercises its Manufacturing
Right in accordance with Section 2.8, KNC hereby grants to Synthes a fully-paid,
royalty-free, non-exclusive worldwide license to the KNC Intellectual Property,
with the right to sublicense solely to its parent or subsidiaries and to any
third party manufacturer, to use the KNC Intellectual Property solely (a) to the
extent necessary to manufacture Products pursuant to such Manufacturing Right
and (b) to the extent and for the duration required to exercise such
Manufacturing Right in accordance with Section 2.8. Synthes shall ensure that
any sublicense of the foregoing license to a third party manufacturer (x) is in
writing, (y) contains the limitations set forth in this Section 4.3 and
(z) specifically states that such third party manufacturer shall only
manufacture Products for Synthes.

4.4. No Other Rights. Except as otherwise expressly provided in this Agreement,
neither party shall have any license or other right to use the Intellectual
Property of the other party.

4.5. Term Of Licenses. Subject to Section 9.2.3, the licenses and rights granted
in this section shall continue for so long as this Agreement remains in full
force and effect. To the extent required by Law, the parties shall be entitled
to register or report, as applicable, the licenses and rights granted hereunder
with competent authorities in any relevant jurisdiction.

 

5. CLINICAL DEVELOPMENT, MARKETING AND REGULATORY MATTERS

5.1. General Responsibility. Each party shall comply in all material respects
with all applicable Law in conducting its activities under this Agreement and,
except as provided for herein, shall bear its own cost and expense of complying
therewith.

5.2. Regulatory Approvals. Synthes shall be responsible for obtaining U.S. FDA
clearances or approvals (as applicable) and CE Mark approvals to distribute
Products at its own expense.

5.3. MDR and Complaints.

5.3.1. Each party shall cooperate fully with the other party in dealing with
customer complaints concerning the Products and shall take reasonable action to
promptly resolve and follow up with regard to such complaints.

5.3.2. Synthes shall be solely responsible for complying with the Medical Device
Reporting requirements set forth in 21 C.F.R. Part 803, as may be amended from
time to time, and similar non-U.S. requirements (collectively, “MDR”) for the
Products. Synthes shall promptly provide to KNC copies of such filings and
reports that relate to the safety or efficacy of the Products.

5.3.3. KNC shall provide such assistance and information as Synthes reasonably
request to fulfill its MDR obligations for the Products.

5.3.4. Synthes shall keep and maintain a record of all customer complaints

 

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received by Synthes relating to the Products that are required to be maintained
by Synthes pursuant to 21 C.F.R. § 820.198 and similar non-U.S. requirements;
and promptly notify KNC upon receipt of any information that indicates a safety
concern with respect to the Products that relate to the manufacturing or design
which affect the safety or efficacy of the Products.

5.3.5. KNC shall promptly notify Synthes upon receipt of any information that is
a “complaint” as defined in 21 CFR 820.3(b), or that indicates a safety concern
with respect to the Products, and otherwise cooperatively undertake
investigations, provide information and analysis, including those required by 21
CFR 820.198(e), and conduct such follow-up activities as reasonably requested by
Synthes in fulfillment of Synthes’ obligations under this section.

5.4. Removals and Corrections (Recalls).

5.4.1. If either party in good faith determines that a removal, correction or
other field action involving the Products is warranted, such party shall
immediately notify the other party in writing and shall advise such other party
of the reasons underlying its determination that a removal, correction or other
field action is warranted. The parties shall consult with each other as to any
action to be taken in regard to such removal, correction or other field action.
If after consultations: (1) Synthes in good faith believes that such a removal,
correction or field action should be undertaken with respect to the Products’
labeling, the parties shall, at Synthes’ sole cost and expense unless the
applicable Product was not manufactured in conformance with the Specifications,
cooperate in carrying out the same; or (2) Synthes in good faith believes that
such a removal, correction or field action should be undertaken with respect to
one or more Products, the parties shall, at Synthes’ sole cost and expense
unless the applicable Product was not manufactured in conformance with the
Specifications, cooperate in carrying out the same.

5.4.2. Synthes shall submit to the FDA and any similar non-U.S. regulatory
entities (collectively, “Regulatory Agencies”) necessary reports of removals,
corrections or other field actions, as required under 21 C.F.R. Part 806 and any
similar non-U.S. requirements, and shall be responsible for drafting any
notifications of removals and corrections with respect to the Products and the
Products’ labeling. Synthes shall within a reasonable time thereafter provide
KNC with a copy of any such report as filed with a Regulatory Agency. Synthes
shall notify KNC within five (5) days of a determination that the Products shall
be subject to a removal, correction, recall or other field action. Synthes shall
maintain records of all corrections or removals as required by Law, and shall
promptly provide KNC with a copy of such records.

5.4.3. KNC shall be responsible for all costs and expenses of any removals or
corrections to the extent such removal or correction is caused by: (A) defects
in the raw materials or manufacture of the Products wherein such defect causes
the Products to not meet the Specifications, or (B) the failure of KNC to comply
with any requirement under Section 10.2. Synthes shall be responsible for the
cost and expenses of all other removals or corrections.

 

6. INFRINGEMENT ACTIONS.

6.1. Infringement Notification. If Synthes or KNC is threatened with a suit or
sued by a third party, or if Synthes or KNC learns of any third party
infringement (including misappropriation and suspected infringement and
misappropriation) of Synthes Intellectual

 

13

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Property or KNC Intellectual Property because of activities in connection with
the design, development, manufacture and/or distribution of Products, the party
who has been threatened with such suit or sued, or learns of such infringement,
shall promptly notify the other party in writing of such event.

6.2. Infringement Defense. In the case of a suit alleging infringement of a
third-party’s Intellectual Property by a Product, Synthes shall be solely
responsible for controlling the defense of such suit and shall have the sole
right to settle such suit pursuant to the provisions of Section 8.3.

6.3. Third Party Infringement. In the case of a suit alleging infringement by a
third party of (a) any Synthes Intellectual Property, for which suit Synthes
shall be solely responsible for controlling the prosecution and settlement
thereof, (b) any KNC Intellectual Property, for which suit KNC shall be solely
responsible for controlling the prosecution and settlement thereof, or
(c) Synthes Intellectual Property and KNC Intellectual Property, for which suit
the parties shall jointly control the prosecution and settlement thereof, the
parties shall, following payment of reasonable attorneys’ fees related to such
action, equitably share in the proceeds derived from such action based on their
respective losses resulting from such third party infringement.

 

7. CONFIDENTIAL INFORMATION

7.1. Confidential Information. All information disclosed by one party to the
other party pursuant to this Agreement shall be deemed “Confidential
Information” hereunder regardless of whether such information is marked as
“Confidential” or with some similar designation. Such Confidential Information
includes, without limitation, the terms and provisions of this Agreement, each
party’s Intellectual Property, proprietary information and trade secrets
regarding design, development, manufacturing, testing, and regulatory approval
of products. Confidential Information shall be safeguarded by the recipient,
shall not be disclosed to third parties and shall be made available only to such
of recipient’s employees, independent contractors and/or agents who need to know
the Confidential Information in connection with the performance of such party’s
obligations hereunder, who are informed by the recipient of the confidential
nature of the information, and who either enter into or have already entered
into a confidentiality agreement containing terms substantially similar to, and
at least as restrictive as, those set forth in this section. The receiving party
shall not use the disclosing party’s Confidential Information for any purpose
other than performing its obligations hereunder or as permitted under this
Agreement. All Confidential Information shall remain the property of the
disclosing party and shall be returned to the disclosing party within thirty
(30) days of receipt of a written request by the recipient from the disclosing
party or within thirty (30) days of termination of this Agreement.
Notwithstanding the forgoing, the recipient may retain a copy of such
Confidential Information: (a) for purposes of ascertaining the party’s rights
and obligations with respect to such Confidential Information; provided,
however, Confidential Information retained for this purpose shall be held
exclusively by the recipient’s counsel; or (b) if, in the opinion of counsel for
the recipient, the recipient is required by applicable Law to retain a copy of
the Confidential Information, and in any such case, the recipient shall notify
the discloser of same. For the avoidance of doubt, KNC shall be deemed the
disclosing party with respect to any Confidential Information acquired by KNC in
connection with the transactions contemplated by

 

14

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the Purchase Agreement. The mutual obligations of confidentiality set forth in
this section shall apply during the Term of this Agreement and for a period of
five (5) years after the termination or expiration of this Agreement.
Confidential Information shall not include any information that:

a. is or hereafter becomes generally available to the public other than by
reasons of default with respect to any confidential obligation under this
Agreement; or

b. was already known to the recipient as evidenced by prior written documents
already in its possession; or

c. is disclosed to the recipient by a third party who is not in default of any
confidentiality obligation to the disclosing party; or

d. is or was developed by or on behalf of the recipient without reliance on the
disclosing party’s Confidential Information; or

e. is used with the written consent of the disclosing party in applications for
patent, copyright, or other intellectual property protection; or

f. has been approved in writing for publication by each of the parties.

7.2. Permitted Disclosures. Notwithstanding the provisions of Section 7.1 above,
each party hereto may disclose the other’s Confidential Information, to the
extent such disclosure is reasonably necessary, in prosecuting or defending
litigation, complying with applicable governmental Law, regulations or court
orders, or submitting information to tax or other governmental authorities;
provided that if a party is legally required to make any such disclosure of the
other party’s Confidential Information, to the extent it may legally do so, it
will give reasonable advance written notice to the other party of such
disclosure and will use commercially reasonable efforts to secure confidential
treatment of such Confidential Information prior to its disclosure (whether
through protective orders or otherwise).

 

8. INDEMNIFICATION

8.1. KNC Indemnified Parties. Synthes will defend, indemnify and hold KNC, its
subsidiaries and Affiliates, and their respective shareholders, directors,
officers and employees (collectively, the “KNC Indemnified Parties”) harmless
against any and all actual and direct losses, damages, liabilities, costs and
expenses whatsoever (including reasonable attorneys’ fees) (collectively,
“Losses”), paid or incurred by or asserted against the KNC Indemnified Parties
based upon or arising from: (i) the marketing or distribution by Synthes of
Products; (ii) any claim, demand, action or proceeding initiated by any third
party based upon products liability or a similar theory, including any claim,
demand, action or proceeding related to the design of the Products;
(iii) infringement by the Products of a third party’s intellectual property
where the claim of infringement is based on Synthes Intellectual Property, a
Synthes design or KNC Intellectual Property acquired in connection with the
transactions contemplated by the Purchase Agreement; (iv) the failure of Synthes
to comply with any requirement under Section 10.3; (v) any negligent or
fraudulent act or willful misconduct of Synthes or its employees, agents or
representatives in the performance of this Agreement; (vi) all third party
claims arising out of the death or personal injury of Synthes’ employees or
agents while at KNC’s work site or otherwise

 

15

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on the premises of KNC in connection with work under this Agreement, except for
such claims which result from the willful misconduct or gross negligence of KNC
or its officers, agents, servants and employees; or (vii) any third party claims
relating to damage to KNC’s property caused by Synthes’ employees or agents
while at KNC’s work site or otherwise on the premises of KNC in connection with
work under this Agreement. Synthes’ liability under this section shall be
reduced to the extent that Synthes demonstrates, by a preponderance of the
evidence, that any such Losses were caused solely by the negligence or willful
misconduct of the KNC Indemnified Parties or by the failure of KNC to perform
its duties under this Agreement. Synthes shall maintain a primary and
noncontributing products liability insurance with a combined single limit of not
less than $5,000,000 (bodily injury and property damage) per occurrence. KNC
shall have the right to demand and receive satisfactory evidence of such
insurance coverage and shall have the right to maintain such coverage on
Synthes’ behalf and at Synthes’ expense in the event of Synthes’ nonpayment of
premiums or lapse of coverage. As an alternative to maintaining such a policy of
products liability insurance, Synthes may maintain a program of self-insurance,
with reserves to be set by an independent actuary. Synthes shall provide KNC
reasonable evidence of such self-insurance upon KNC’s written request.

8.2. Synthes Indemnified Parties. KNC will defend, indemnify and hold Synthes,
its subsidiaries and Affiliates and their respective shareholders, directors,
officers and employees (collectively, the “Synthes Indemnified Parties”)
harmless against any and all actual and direct Losses paid or incurred by or
asserted against the Synthes Indemnified Parties based upon or arising from:
(i) any claim, demand, action or proceeding initiated by any third party based
upon product liability or a similar theory, where the Products failed to meet
the Specifications, except for any such claim arising from Product manufactured
by a party other than KNC (during any Period of exercise by Synthes of the
Manufacturing Right or otherwise); (ii) the failure of KNC to comply with any
requirement under Section 10.2; (iii) any negligent or fraudulent act or willful
misconduct of KNC or its employees, agents or representatives in the performance
of this Agreement; (iv) all third party claims arising out of the death or
personal injury of KNC’s employees or agents while at Synthes’ work site or
otherwise on the premises of Synthes in connection with work under this
Agreement, except for such claims which result from the willful misconduct or
gross negligence of Synthes or its officers, agents, servants and employees; or
(v) any third party claims relating to damage to Synthes’ property caused by
KNC’s employees or agents while at Synthes’ work site or otherwise on the
premises of Synthes in connection with work under this Agreement. KNC’s
liability under this section shall be reduced to the extent that KNC
demonstrates, by a preponderance of the evidence, that any such Losses were
caused solely by the negligence or willful misconduct of the Synthes Indemnified
Parties or by the failure of Synthes to perform its duties under this Agreement.
KNC shall maintain a primary and noncontributing products liability insurance
with a combined single limit of not less than $5,000,000 (bodily injury and
property damage) per occurrence. Synthes shall have the right to demand and
receive satisfactory evidence of such insurance coverage and shall have the
right to maintain such insurance coverage on KNC’s behalf and at KNC’s expense
in the event of nonpayment of premiums or lapse of coverage.

8.3. Indemnification Procedures. A party claiming indemnification pursuant to
this section shall promptly give the other party written notice of any action,
suit or proceeding to which it claims such indemnity applies. The indemnifying
party shall provide the defense with respect to claims to which this indemnity
applies and in doing so shall have the right to control

 

16

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the defense and settlement with respect to such claims; provided, however, that
any settlement includes a general release of the indemnified party with no
admission or finding of fault by the indemnified party. The indemnified party
shall cooperate fully with the indemnifying party in such defense, including
making relevant documents available and providing witnesses to testify at any
deposition, trial, hearing, arbitration, or other proceeding. A KNC Indemnified
Party or Synthes Indemnified Party may participate at its expense in the defense
of any action or claim which may be asserted against it and for which such party
seeks indemnity pursuant to the provisions of this section, or such KNC
Indemnified Party or Synthes Indemnified Party may assume the defense of such
claim or action, including the right to settle or compromise any claim against
it without the consent of the indemnifying party; provided, however, that in
assuming such defense it shall be deemed to have waived its right to
indemnification except in cases where: (i) the indemnifying party has failed to
promptly initiate and continue the defense of such claim; or (ii) the
indemnified party reasonably determines that a conflict of interest between the
indemnifying party and the indemnified party exists with respect to such claim.
Each party shall make a reasonable effort to cooperate in such settlement and/or
defense.

 

9. TERM AND TERMINATION

9.1. Term. This Agreement shall become effective upon the execution hereof by
the parties hereto and shall continue in full force and effect for an initial
term of ten (10) years from the date hereof (the “Initial Term”). This Agreement
shall be automatically renewed for successive additional terms of two (2) years
each upon the expiration of the Initial Term or the then-current Renewal Term
(each, a “Renewal Term”), as the case may be (the Initial Term and any Renewal
Term, collectively, the “Term”).

9.2. Termination.

9.2.1. This Agreement may be terminated for cause upon the occurrence of any of
the following events, such termination to be effective ninety (90) days (or such
shorter period expressly set forth below) after the giving of written notice by
the party entitled to terminate:

a. by either party if the other party breaches any of the covenants,
representations, warranties or other terms of this Agreement or defaults in the
performance of any of its obligations hereunder and: (X) such breach or default
is not cured within ninety (90) days after written notice thereof given by the
non-defaulting party; or (Y) in the event such breach or default shall
reasonably require longer than ninety (90) days to cure, the breaching party
fails to commence to cure such breach or default within such 90-day period, does
not diligently pursue such cure and/or does not accomplish such cure within a
reasonable period of time, which shall not in any event exceed fifteen
(15) months;

b. by either party if the other party becomes insolvent under local Law, makes a
general assignment for the benefit of creditors, files a voluntary petition in
bankruptcy or for a reorganization or to effect a plan or other arrangement with
its creditors, files an answer to a creditor’s petition or other petition
against it for an adjudication in bankruptcy or for a reorganization admitting
the material allegations thereof, or applies for or permits the appointment of a
receiver, trustee or custodian for

 

17

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any substantial portion of its properties or assets;

c. by either party if an order is entered by any court approving an involuntary
petition seeking reorganization of the other party, or appointing a receiver,
trustee or custodian for any substantial portion of the other party’s assets or
business; or

d. by either party if the other party for any reason voluntarily or
involuntarily suspends transaction of its business or ceases to function as a
going concern.

Expiration or termination of this Agreement shall not prejudice or otherwise
affect (i) any indebtedness then owing by either party to the other under this
Agreement or otherwise; or (ii) any covenants, representations, warranties
disclaimers, or other provisions of this Agreement which under the express terms
hereof survive the expiration or termination of this Agreement.

9.2.2. KNC shall fulfill the Binding Forecasts received prior to termination or
expiration of this agreement, and Synthes shall fulfill its payment obligations
related thereto, in each case in accordance with this Agreement.

9.2.3. In the event that this Agreement is terminated by KNC as a result of the
occurrence of any event set forth in Section 9.2.1, then, immediately upon the
effectiveness of such termination, KNC shall be automatically granted a
perpetual, exclusive, fully paid, royalty-free license, with the right to
sublicense, to all Synthes Intellectual Property, approvals, consents and
clearances necessary to manufacture, market, sell and distribute the Products.

9.3. Survival. The termination or expiration of this Agreement shall not affect
vested rights of any party hereto existing as of the date of such termination or
expiration, or other obligations expressly intended to survive the termination
or expiration hereof, or the rights and obligations set forth in Section 7.1
(Confidential Information), Section 8 (Indemnification), Section 9 (Term and
Termination) and Section 11 (Miscellaneous).

 

10. REPRESENTATIONS AND WARRANTIES

10.1. Representations and Warranties of Each Party. Each of KNC and Synthes
represents and warrants to the other that: (i) it has the full right and
authority to enter into this Agreement and grant the rights granted herein;
(ii) the execution, delivery and performance by its employees or agents of this
Agreement, the fulfillment and the compliance with respective terms and
provisions hereof, and the consummation of the transactions contemplated herein,
do not and will not (a) conflict with, or violate any provision of, any Law,
regulation, policy, order, judgment, injunction, decree, or award of any
arbitrator or governmental authority having applicability to such party or any
of its employees or agents, or (b) conflict with, or result in any breach of, or
constitute a default under, any agreement, commitment, or other instrument to
which such party or any of its employees or agents is a party or by which its or
any of its employees or agents may be bound or affected; (iii) this Agreement
has been duly authorized, is binding on such party and enforceable in accordance
with its terms; and (iv) all of its activities in the design, development,
manufacture and sale of Products and other items under this Agreement

 

18

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shall comply in all material respects with all applicable Law.

10.2. Representations and Warranties of KNC. KNC represents and warrants to
Synthes that the Products and other items furnished hereunder will be
manufactured in accordance with the applicable approved Specifications and FDA
Quality System Regulations (QSR), and ISO 13485:2003 or equivalent.

10.3. Representations and Warranties of Synthes. Synthes represents and warrants
that (a) all of its activities related to the design, marketing, distribution,
sale and handling of the Products pursuant to this Agreement shall comply in all
material respects with all applicable Law, (b) it has, and shall have for the
duration of the Term, all necessary regulatory approvals to perform its
obligations, and to grant all of the rights granted, under this Agreement,
(c) to the best of Synthes’ knowledge, all KNC Intellectual Property, to the
extent acquired in connection with the transactions contemplated by the Purchase
Agreement, and the Synthes Intellectual Property do not infringe any
Intellectual Property right of any entity or individual, and (d) as of the
Effective Date the Products are manufactured in conformance with the
Specifications and with industry standard good manufacturing practices and
quality management procedures. So long as this Supply Agreement is in effect,
Synthes shall, and shall cause its Affiliates to, comply in all material
respects with the Corporate Integrity Agreement between the Office of the
Inspector General of the United States Department of Health and Human Services
and Synthes, Inc., executed by Synthes, Inc. on September 15, 2010.

10.4. No Additional Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY WARRANTY, EXPRESS, STATUTORY OR OTHERWISE, WITH RESPECT
TO THE PRODUCTS, A PARTY’S INTELLECTUAL PROPERTY OR OTHERWISE IN CONNECTION WITH
THIS AGREEMENT, AND HEREBY EXPRESSLY DISCLAIMS ANY OTHER FORM OF WARRANTY,
INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT. THIS STATED WARRANTY IS EXCLUSIVE
AND IN LIEU OF ALL OTHER WARRANTIES PROVIDED BY LAW.

 

11. MISCELLANEOUS

11.1. Relationship of Parties. Nothing in this Agreement shall be construed or
interpreted as creating a joint venture or partnership between the parties.
Except as expressly set forth in this Agreement, neither party is by virtue of
this Agreement authorized as an agent, employee or legal representative of the
other party or to act in any way in such capacity. Neither party shall have any
right or authority to bind the other party in any way, except as expressly set
forth in this Agreement, and the relationship of the parties has at all times
and will continue to be that of independent contractors.

11.2. Public Announcements. Neither party shall originate without the prior
written consent of the other party, any publicity, news release or public
announcement, written or oral, whether to the public or press, stockholders or
otherwise, relating to this Agreement, including its existence, the subject
matter to which it relates, performance under it or any of its terms, to any
amendment hereto or performances hereunder; provided, however, that either party
may

 

19

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make such disclosures when, and to the extent, that it is required by Law to
make such disclosures. If a party makes an announcement required by Law under
this Agreement, or upon the reasonable advice of counsel, it will endeavor to
give the other party advance written notice of the text of the announcement so
that the other party will have an opportunity to comment upon the announcement.

11.3. Entire Agreement. Except as expressly stated herein, this Agreement is the
entire understanding of the parties, and supersedes all prior agreements or
understandings, whether written or oral, with respect to this subject matter.
Except as expressly stated herein, no terms, conditions, or warranties, other
than those written in this Agreement, and no amendments or modifications of this
Agreement will be binding on the parties unless in writing and signed by the
parties. The language of this Agreement shall for all purposes be construed as a
whole, according to its fair meaning, not strictly for or against either party,
and without regard to the identity or status of any person who drafted all or
any part of it.

11.4. Further Actions. The parties hereto hereby agree to take or cause to be
taken such further actions as may be necessary or as may be reasonably requested
in order to fully effectuate the purposes, terms, and conditions of this
Agreement.

11.5. Waiver. No waiver hereunder shall be valid or binding unless set forth in
writing and duly executed by the party against whom enforcement of the waiver is
sought. Neither the waiver by either of the parties hereto or a breach of, or a
default under, any of the provisions of this Agreement, nor the failure or delay
of either of the parties, on one or more occasions, to enforce any of the
provisions of this Agreement or to exercise any right or privilege hereunder
shall thereafter be construed as a waiver of any subsequent breach or default of
a similar nature, or as a waiver of any of such provisions, rights, or
privileges hereunder. All rights and remedies conferred under this Agreement or
by any other instrument or Law shall be cumulative and may be exercised
singularly or concurrently.

11.6. Severability. Should any part or provision of this Agreement be held
unenforceable or in conflict with the Law of any jurisdiction, the validity of
the remaining part or provisions shall not be affected by such holdings. Any
provision hereof which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective only to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.

11.7. Headings. The headings in this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.

11.8. Execution in Counterparts. This Agreement and any amendments hereto may be
executed in several counterparts, and when executed, shall constitute one
agreement binding on all the parties hereto, notwithstanding that all signatures
are not on the same counterpart.

11.9. Amendments. This Agreement shall not be amended, altered, or modified
except by a written instrument duly executed by the parties hereto.

11.10. Assignment. This Agreement, or any of the rights and obligations created
herein,

 

20

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shall not be assigned or transferred, in whole or in part, by either party
hereto without the prior written consent of the other party (which shall not be
unreasonably withheld or delayed); provided, however that either party may
assign its rights and obligations to a wholly-owned subsidiary or to an
affiliate that is wholly owned by the parent of the party. This Agreement shall
be binding upon and inure to the benefit of and be enforceable by the permitted
assignees of the parties hereto.

11.11. Notices. All notices to be given hereunder shall be sent by facsimile
transmission or certified mail, return receipt requested to the respective
addresses set forth hereinafter; provided, however, that either of such
addresses may be changed by two (2) weeks written notice hereof to the other
party. Any notices given by facsimile transmission and/or certified mail shall
be effective when actually received or refused by addressee.

Any notices to KNC shall be addressed to:

Kensey Nash Corporation

735 Pennsylvania Drive

Exton, PA 19341

Attn.: Joseph Kaufmann

Facsimile No.: (484) 713-2900

With a copy (which shall not constitute notice) to:

Kensey Nash Corporation

735 Pennsylvania Drive

Exton, PA 19341

Attn: Jeffrey C. Kelly, Esq.

Facsimile No.: (484) 713-2909

and with a copy (which shall not constitute notice) to:

Katten Muchin Rosenman LLP

525 West Monroe Street

Chicago, IL 60661

Attn: David R. Shevitz

         David J. Kelly

Facsimile No.: (312) 577-8768

Any notices to Synthes shall be addressed to:

Synthes USA Sales, LLC

1302 Wrights Lane East

West Chester, PA 19380

Attn: Robert P. Donohue and Terrance Carlson

Facsimile No.: (610) 719-5115

11.12. Force Majeure. Neither party shall be liable to the other for any failure
to perform as required by this Agreement, to the extent such failure to perform
is caused by any

 

21

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reason beyond that party’s control, or by reason of any of the following: civil
disorders, acts of aggression, acts of God, strikes, fires, floods, embargoes,
war, or any similar cause beyond the control of, or occurring without the fault
of the party whose performance is excused under this section (the “Excused
Party”). The Excused Party shall give written notice to the other party
detailing the force majeure event that the Excused Party claims excuses
performance hereunder and the time period during which the Excused Party desires
to have its performance excused. As soon as possible after cessation of the
force majeure event upon which the Excused Party is relying, the Excused Party
shall once again be obligated to perform in accordance with the terms and
conditions of this Agreement.

11.13. Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR
ANY INCIDENTAL, INDIRECT, SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES,
OR FOR LOST PROFITS, SAVINGS OR REVENUES OF ANY KIND, WHETHER OR NOT THE PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OCCURRING. The foregoing
shall not apply to the indemnity obligations of the parties in Section 8 to the
extent that such indemnity obligations arise from: (a) a final judgment of any
court awarding incidental, indirect, special, exemplary, punitive or
consequential indirect damages to a third party; or (b) any settlement agreement
with a third party that includes such damages and that is entered into with the
prior written agreement of the indemnifying party.

11.14. Dispute Resolution. In the event of a dispute between the parties
relative to this Agreement or any transactions concluded hereunder, the parties
shall first use good faith efforts to amicably arrive at a settlement acceptable
to both parties. If, however, a settlement cannot be reached within a reasonable
time after such dispute arises, the parties agree to submit the dispute to
mediation in accordance with the rules of the American Arbitration Association.
In the event a settlement cannot be reach within a reasonable time after
commencing the mediation process, a party may seek redress in the courts. The
parties agree that any legal action based upon such a dispute or any claims
arising out of this Agreement that is not or are not resolved through mediation
shall be exclusively brought before and decided by the U.S. District Court for
the Eastern District of Pennsylvania, or such other jurisdiction as the parties
may mutually agree upon. This Agreement shall be governed by and construed in
accordance with the Laws of the United States and the Commonwealth of
Pennsylvania (not including the choice of law rules thereof). This Agreement
shall not be governed by the United Nations Convention on Contracts for the Sale
of International Goods.

11.15. No Third Party Rights. It is the explicit intention of the parties hereto
that no person or entity other than the parties hereto is or shall be entitled
to bring any action to enforce any provision of this Agreement against any of
the parties hereto, and that the covenants, undertakings and agreements set
forth in this Agreement shall be solely for the benefit of, and shall be
enforceable only by, the parties hereto and their respective successors and
assigns as permitted hereunder.

11.16. Change of Control. In the event of a change of control of a party hereto
(such party, the “Selling Party”), the Selling Party shall require that the new
controlling party explicitly assume all of the Selling Party’s obligations under
this Agreement. A change of control shall mean an acquisition of a party hereto
or a sale of all or substantially all of a party’s assets or business to which
this Agreement relates.

 

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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of
the date first set forth above.

 

KNC:

 

KENSEY NASH CORPORATION

By:   /s/ Joseph W. Kaufmann Name:   Joseph W. Kaufmann Title:   President and
Chief Executive Officer

 

SYNTHES:

 

SYNTHES USA SALES, LLC

By:   /s/ Robert Donohue Name:   Robert Donohue Title:   Vice President

 

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List of Exhibits to Supply Agreement

Exhibits

 

Exhibit 1.7

  Exclusive Products

Exhibit 1.11

  Initial Forecast (Exhibit Redacted**)

Exhibit 2.6.1(a)-1

  Transfer Prices for Initial Products (Exhibit Redacted**)

Exhibit 2.6.1(a)-2

  Transfer Prices for Additional Products (Exhibit Redacted**)

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

Exhibit 1.7

Exclusive Products

Product Categories:

 

•  

Norian SRS

 

•  

Norian CRS

 

•  

Norian Fast Set Putty

 

•  

Norian Drillable

 

•  

Norian Reinforced

 

•  

Norian Mixer

 

•  

chronOS Preforms

 

•  

chronOS Strip

 

•  

SynPor UHMWPE Sheets

 

•  

chronOS used in pre-filled Cages

 

•  

Scout adhesion barrier

 

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Bone Marrow Aspiration System

 

•  

Delivery Needle

 

Kensey Nash Supply Agreement