PRODUCT DEVELOPMENT & SUPPLY AGREEMENT

Fibrinogen Concentration Kit

 

THIS AGREEMENT, made and entered into this 28th day of July 2006 (“Effective
Date”), by and between Biomet Biologics, Inc. (“Biomet”), an Indiana
corporation, and affiliate of Biomet, Inc., having its principal offices at 56
East Bell Drive, Warsaw, Indiana 46582, and ThermoGenesis Corp., (“TGC”), a
Delaware corporation having its principal offices at 2711 Citrus Road, Rancho
Cordova, California 95742.

 

WITNESSETH:

 

WHEREAS, TGC sells cryo-precipitation products which harvests blood proteins and
has expertise and intellectual property relating to these products;

 

WHEREAS, Biomet develops, manufactures and distributes products that process
autologous human cells, such as contained in blood, to produce therapeutic
products;

 

WHEREAS, TGC and Cell Factor Technologies, Inc. (now Biomet) entered into a
certain Clotalyst thrombin product supply agreement on March 29, 2005; and,

 

WHEREAS, Biomet desires to have TGC supply a product which harvests a fibrinogen
rich solution of adhesive & clotting proteins, known as the “CryoSeal II Kit,”
incorporating TGC’s intellectual property for sale by Biomet as a Product (as
defined below);

 

NOW, THEREFORE, in consideration of the above recitals and in consideration of
the mutual agreements and undertakings set forth below, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:

 

ARTICLE I

Definitions

 

1.1        “Affiliates” mean any company, corporation, or business in which
Biomet owns or controls at least fifty percent (50%) of the voting stock.

 

1.2          “Clotalyst” means Biomet’s autologous thrombin clotting factor
device (including TGC’s thrombin technology), TGC’s thrombin reagent and blood
processing disposables.

 

1.3          “CryoSeal II Kit” means TGC’s fibrinogen plus disposable, labeling
as specified by Biomet, and applicators contained in a sterile package.

 

1.4          “CyroSeal II Intellectual Property” means TGC’s Intellectual
Property required to make, use, offer for sell, sell, and import the Product.

 

1.5          “Confidential Information” means all non-public information,
whether in written, oral or any other form, including, without limitation, data,
documentation, specifications, know-how, technical information, designs,
drawings, plans, blueprints, business plans, customer

 

 

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lists, pricing information, forecasts, projections, analyses, and manufacturing
processes that the disclosing party (the “Disclosing Party”) disclosed to the
other party (the “Receiving Party”) or allowed the Receiving Party to observe,
in the course of the activity under this Agreement, which information is
indicated at the time of disclosure or observation as being confidential or
proprietary in some manner; provided, however, that if such information is not
or cannot be so marked at the time of disclosure or observation, the information
shall still qualify as Confidential Information if the Disclosing Party
designates such information as confidential to the Receiving Party in writing
within thirty (30) days of disclosure or observation. Notwithstanding the
foregoing, Confidential Information shall not include information that the
Receiving Party can demonstrate (a) was known to the Receiving Party on a
non-confidential basis prior to the disclosure by the Disclosing Party, (b) has
become publicly available without fault of the Receiving Party, or (c) was
independently developed without the use of Confidential Information by
representatives of the Receiving Party who did not have access to the
Confidential Information as established by contemporaneous written records.

 

1.6          “FDA” means the U.S. Food and Drug Administration, or any successor
agency thereto.

 

1.7        “Fibrinogen Reagent” means TGC’s reagent for TGC’s CryoSeal II Kit,
with labeling and packaging as specified by Biomet that is covered by CryoSeal
II Intellectual Property along with other directly related accessory products
such as applicator tips.

 

1.8        “Field of Use” means surgical hemostats, graft delivery systems, and
surgeries listed in Schedule 1.8.

 

1.9          “Intellectual Property” means collectively, Patents, Trade Secrets,
Copyrights, Trademarks, moral rights, trade names, rights in trade dress and all
other intellectual property rights and proprietary rights, whether arising under
the laws of the United States or any other state, country or jurisdiction in the
world, including all rights or causes of action for infringement or
misappropriation of any of the foregoing. For purposes of this Agreement: (a)
“Patents” shall mean all patent rights and all right, title and interest in all
letters patent or equivalent rights and applications, including provisional
applications, for letters patent or rights, industrial and utility models,
industrial designs, petty patents, patents of importation, patents of addition,
certificates of invention and other government issued or granted indicia of
invention ownership, including any reissue, extension, division, continuation or
continuation-in-part applications throughout the world; (b) “Trade Secrets”
shall mean all right, title and interest in all trade secrets and trade secret
rights arising under common law, state law, federal law or laws of foreign
countries; (c) “Copyrights” shall mean all copyrights, and all other literary
property and authorship rights, and all right, title, and interest in all
copyrights, copyright registrations, certificates of copyright and copyrighted
interests throughout the world; and (d) “Trademarks” shall mean all right, title
and interest in all trademark, service mark, trade name and trade dress rights
arising under the common law, state law, federal laws and laws of foreign
countries, and all right, title, and interest in all trademark, service mark,
trade name and trade dress applications and registrations interests throughout
the world.

 

1.10      “Net Sales” mean gross revenues received by Biomet and/or its
licensees from the sale of the Products (as defined below), less trade or
quantity discounts, sales commissions, credit for returned or recalled goods,
and delivery expenses paid or borne by Biomet, in each instance with respect to
Products.

 

 

 

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1.11      “Plasma Fractioning Tube” means Biomet’s disposable centrifuge tube
for isolating a plasma fraction from autologous whole blood.

 

1.12        “Product(s)” means a fibrinogen concentration kit containing TGC’s
CryoSeal II Kit (minus Fibrinogen Reagent) and Biomet’s Plasma Fractioning Tube,
ACD-A anti-coagulant, labeling per Biomet’s direction, and instructions, as more
fully described in Schedule 1.12 (a) (Customer Requirements) and Schedule 1.12
(b) (Product Specification).

 

 

1.13

“Territory” means all countries of the world.

 

1.14        “TGC Point of Shipment” means as TGC’s manufacturing facilities as
defined in the Uniform Commercial Code.

 

ARTICLE II

Product Development

 

2.1          Development Fee Milestone Payments. As an advance payment for
engineering and development of the Product, Biomet shall pay TGC each milestone
payment listed below, within thirty (30) days after the mutually agreed upon
accomplishment of the milestone. Also within the thirty (30) day payment window
for each milestone and after Biomet has paid TGC the milestone payment due,
Biomet may, in its sole discretion, terminate the Agreement by providing TGC a
written notice of termination, and upon termination Biomet shall not be
obligated to make any further milestone payments. All milestone payments are
made for completed work delivered at each phase, not tied to any continuing
design or manufacturing efforts to TGC obligations, and TGC shall retain all
milestone payments made by Biomet; and, TGC shall be free to commercialize the
Product under the terms of this Agreement. If Biomet pays TGC all milestone
payments, the aggregate development fee would be in the sum of ^Removed pursuant
to Rule 24b-2 under the Securities Exchange Act of 1934^

 

(a)         Agreement Milestone. ^Removed pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934^ within thirty (30) days after this Agreement is
fully signed. In preparation for milestone (b), TGC and Biomet shall begin to
jointly prepare a mutually agreed upon Schedule 1.12 (a) (Customer Requirements)
within ninety (90) days after the Agreement is fully signed;

 

(b)         Proof of Concept Milestone. ^Removed pursuant to Rule 24b-2 under
the Securities Exchange Act of 1934^ after the delivery of Schedule 1.12 (a)
(Customer Requirements) and proof of concept meets the mutually agreed upon
Schedule 1.12 (b) (Product Specifications) no later than March 1, 2007;

 

(c)         Design Completion Milestone. ^Removed pursuant to Rule 24b-2 under
the Securities Exchange Act of 1934^ after the design is completed (design
“freeze”) and meets the Schedule 1.12 (b) (Product Specification) no later than
June 1, 2007;

 

(d)         Functional Prototype Milestone. ^Removed pursuant to Rule 24b-2
under the Securities Exchange Act of 1934^ after TGC delivers to Biomet ^Removed
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934^ functional
fibrinogen device prototypes and validation ^Removed pursuant to Rule 24b-2
under the Securities Exchange Act of 1934^ data that meet both the Schedule 1.12
(a) (Customer Requirements) and the Schedule 1.12 (b) (Product Specification) no
later than September 1, 2007; and,

 

 

 

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(e)         First Commercial Sale. ^Removed pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934^ after the first commercial sale of a Product.

 

2.2          License Grant. Upon Biomet’s payment to TGC of the aggregate
development fee in the sum of ^Removed pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934^, TGC shall grant to Biomet and Affiliates under
CyroSeal II Intellectual Property, and for the life of such CyroSeal II
Intellectual Property, a non-exclusive, royalty bearing, license to make, use,
offer to sell, sell, and import Products throughout the Territory for use in the
Field of Use. Biomet shall have the right to grant sublicenses to others under
the CyroSeal II Intellectual Property to import, distribute, offer to sell,
sell, and obtain regulatory clearances for Products, provided all sublicenses
are listed in Schedule 2.2 (Sublicensees), which may be updated from time to
time. If TGC does not supply Fibrinogen Reagent to Biomet within 180 days after
Biomet’s requested delivery date in a purchase order under Section 3.7, TGC
shall grant to Biomet under Fibrinogen Reagent Intellectual Property, and for
the life of such Intellectual Property, a non-exclusive, royalty bearing,
license to make, use, offer to sell, sell, and import Fibrinogen Reagent
throughout the Territory for use in the Field of Use. All Products manufactured
by or for Biomet shall reasonably bear all appropriate designations (e.g,
package inserts, instructions for use, and actual product labeling) as may be
permitted identifying TGC’s patents and rights contained in the Product.

 

2.3          Product Configuration. Biomet and TGC shall share Product
configuration information with each other prior to each party’s respective
design freeze to coordinate Product configuration distinctions appropriate for
Biomet’s Field of Use and TGC’s marketing plans. Product configuration
distinctions may include packaging configuration, labeling, and centrifuge
interfaces.

 

ARTICLE III

Terms and Conditions of Sale

 

3.1          Purchase: TGC shall supply Fibrinogen Reagent and Biomet shall
purchase Fibrinogen Reagent at the transfer price provided in Schedule 3.1
(Pricing and Purchase Minimums), that shall not exceed ^Removed pursuant to Rule
24b-2 under the Securities Exchange Act of 1934^ each, according to the terms
and condition of sale set forth below. If Biomet decides, in its sole
discretion, to have TGC manufacture Product, TGC shall supply Product at a
transfer price provided in Schedule 3.1 according to the terms and conditions of
sale set forth below.

 

(a)           Biomet shall purchase the minimum quantity of Products from TGC as
set forth on Schedule 3.1 for each calendar year with the minimum quantity being
prorated during the first year if Biomet’s purchase order is dated after January
31st. Minimum purchases shall be determined and included in Schedule 3.1 prior
to the completion of the CryoSeal II Kit development estimated to be no later
than ^Removed pursuant to Rule 24b-2 under the Securities Exchange Act of 1934^.

 

(b)          The parties acknowledge that the minimum purchase quantity for each
calendar year set forth in Schedule 3.1 are based on the prices listed Schedule
3.1 and

 

 

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agree to review and adjust the minimum purchase quantity set forth in Schedule
3.1 if the prices are adjusted.

 

(c)           If Biomet does not purchase the minimum quantity of Products as
set forth in Schedule 3.1, Biomet may, at its sole discretion, grant TGC under
Plasma Fractioning Tube and Clotalyst Intellectual Property a nonexclusive,
royalty bearing license to make, use, offer to sell, sell, and import the Plasma
Fractioning Tube and Clotalyst. If TGC manufactures the Plasma Fractioning Tube
and Clotalyst, TGC shall pay Biomet a royalty of ^Removed pursuant to Rule 24b-2
under the Securities Exchange Act of 1934^ of the Net Sales received by TGC or
its Affiliates from the sale of Products.

 

3.2          Right of First Offer. Biomet grants to TGC the right of first offer
to manufacture Product exercisable within thirty (30) days after TGC delivers to
Biomet ^Removed pursuant to Rule 24b-2 under the Securities Exchange Act of
1934^ functional fibrinogen device prototypes and validation data. If TGC
manufactures Product for Biomet, Biomet shall ^Removed pursuant to Rule 24b-2
under the Securities Exchange Act of 1934^ on such Product. Biomet shall decide,
in its sole discretion, whether to accept TGC’s offer to manufacture products or
make other arrangements to manufacture Product.

 

3.3          Royalty. If Biomet manufactures Products not including Fibrinogen
Reagent, Biomet shall pay TGC a royalty of ^Removed pursuant to Rule 24b-2 under
the Securities Exchange Act of 1934^ of the Net Sales received by Biomet or its
Affiliates from the sale of Products.

 

3.4          TGC Manufacturing Forecast. Within thirty (30) days after the
Agreement is executed, Biomet shall provide TGC with a rolling 12 month
estimated forecast for Fibrinogen Reagent and, if Biomet selects TGC to
manufacture Products, Products with a purchase order for two-quarter (six-month)
delivery forecast. The delivery forecast will be updated each calendar quarter,
and provided to TGC within thirty days after the end of each calendar quarter.
Both quarters of each six (6) month delivery forecast shall be binding, and the
second six (6) months of the rolling annual forecast shall be non-binding.

 

3.5          Fibrinogen Reagent Transfer Price. If Biomet manufactures Products
not including Fibrinogen Reagent, all prices for Reagent purchased by Biomet
hereunder shall be F.O.B., TGC Point of Shipment. Biomet shall pay TGC the
transfer price shown in Schedule 3.1 for aggregate quantities of Clotalyst
reagent and Fibrinogen Reagent. Price review for price adjustments for Schedule
3.1 shall be reviewed each anniversary and increases must be mutually agreed to
by both parties and will be implemented no sooner than 90 days after agreement.

 

3.6          Samples. In order to assist Biomet with the introduction of the
Products into the market, TGC agrees to provide Biomet with up to 200 Product
sample units, labeled as such, at a cost of ^Removed pursuant to Rule 24b-2
under the Securities Exchange Act of 1934^ of the applicable transfer price.

 

3.7          Purchase Order. All orders for the Fibrinogen Reagent or Product
shall reflect delivery forecast amounts and be by means of a written purchase
order which shall be submitted to TGC at TGC’s address for notice purposes set
forth in Article 9.1, and shall request a delivery date. Orders may be placed by
facsimile transmission or, upon the parties’ agreement, on TGC’s website or by
e-mail; provided, however, that a confirming purchase order is received by TGC

 

 

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ten (10) business days after such order. It is understood that Biomet and TGC
may use their standard purchase order and sales agreement forms during the
performance of this Agreement. Any purchase order, sales agreement or other form
used by Biomet or TGC shall be for convenience only and any terms or provisions
contained therein which are in addition to or inconsistent with those contained
herein shall have and be of no force and effect; provided, however, that the
terms on such documents shall be effective to the extent they set forth
quantities, scheduled delivery dates and, as applicable, mode of shipment.

 

3.8          Acceptance and Rejection of Purchase Order. All Biomet purchase
orders conforming with Article 3.7 above that are not rejected within thirty
(30) days after the purchase order is submitted shall be accepted by TGC. TGC
shall notify Biomet in writing of any rejected order within thirty (30) days
after the purchase order is submitted. TGC shall have no liability to Biomet
with respect to purchase orders that are rejected.

 

3.9          Invoicing; Payment. TGC shall submit an invoice to Biomet with each
shipment of the Products ordered by Biomet. Each invoice shall be due and
payable in full within forty-five(45) days from the date of such invoice, and
any delinquent account shall bear interest at the greater of one and one half
percent (1 1/2%) per month or the maximum legal rate. All invoices shall be sent
to Biomet’s address for notice purposes set forth in Article 9.1, without regard
to the actual shipping address for the Products. Each such invoice shall state
Biomet’s aggregate and unit purchase price for Products in the relevant
shipment, plus any freight, taxes or other costs incident to the purchase or
shipment initially paid by TGC and to be borne by Biomet hereunder. Biomet shall
make all payments to TGC under this Agreement in United States dollars in
immediately available funds to a bank account designated by TGC in such invoice,
or otherwise designated by TGC in writing. Biomet shall not take any credits or
offsets against amounts billed to Biomet by TGC without TGC’s prior written
consent.

 

 

3.10

Shipping; Risk of Loss.

 

(a)           All Fibrinogen Reagent or Products delivered by TGC pursuant to
this Agreement shall be suitably packed for the designated carrier in TGC’s
standard shipping cartons, marked for shipment to such location or locations as
Biomet may designate, and delivered to Biomet or its carrier, F.O.B., TGC Point
of Shipment. Risk of loss for the Reagent and Products shall pass to Biomet upon
delivery to the carrier at the F.O.B., TGC Point of Shipment.

 

(b)          TGC shall ship all Fibrinogen Reagent or Products in accordance
with Biomet’s delivery instructions specified in Biomet’s purchase orders;
provided, however, that if Biomet does not provide delivery instructions with
respect to the carrier to be used, TGC may use its customary carrier. Biomet
shall also bear all applicable taxes and duties that may be assessed against the
Fibrinogen Reagent or Products after delivery to the carrier F.O.B., TGC Point
of Shipment.

 

(c)           TGC shall use its good faith efforts to ship the Fibrinogen
Reagent or Products for delivery by the requested date on Biomet’s purchase
order for the Fibrinogen Reagent or Products. All shipments of Fibrinogen
Reagent or Products shall be deemed to conform to the relevant purchase order
unless TGC receives from Biomet, no later than thirty (30) days after the
receiving date of a given shipment, written notice specifying the shipment, the
purchase order number and exact nature of the discrepancy between the shipment
and the order. If the quantity of Product delivered does not equal

 

 

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at ^Removed pursuant to Rule 24b-2 under the Securities Exchange Act of 1934^ of
the binding six month forecast (referenced in item 3.4) as executed with valid
purchase orders, then Biomet shall have the right to obtain an alternative
supply of Product.

 

3.11        Cancellation. Biomet may reschedule, redirect or cancel delivery of
Fibrinogen Reagent or Products only upon written notice to TGC sixty (60) days
prior to delivery. However, if Biomet cancels delivery of any Fibrinogen Reagent
or Products within forty-five (45) days of scheduled shipment, Biomet shall pay
to TGC a restocking charge equal to ^Removed pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934^ of the purchase price for such purchase order.

 

3.12        Product Warranty. TGC warrants that the Fibrinogen Reagent or
Products delivered to Biomet shall be free from defects in material and
workmanship and that such warranty shall pass through to the customers of
Biomet. TGC’s sole responsibility with respect to the foregoing warranty is to
replace any Product with a defect for which TGC is responsible that either
Biomet or its customers reject as being non-conforming to product specifications
within ninety (90) days from the date of delivery to Biomet. TGC shall instruct
Biomet to either destroy or return the non-conforming Product to TGC, freight
C.O.D., to TGC’s facility located in the U.K. Article 3.12 shall not be
construed in a manner that would in any way limit the indemnification provisions
of Article 5 of this Agreement, unless expressly stated to limit the
indemnification provisions.

 

3.13      Exclusive Warranty. THE FOREGOING WARRANTIES AND REMEDIES ARE
EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, EITHER IN
FACT OR BY OPERATION OF LAW, STATUTORY OR OTHERWISE INCLUDING WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT OF THIRD
PARTY RIGHTS TO THE FULLEST EXTENT PERMITTED BY LAW. TGC NEITHER ASSUMES NOR
AUTHORIZES ANY OTHER PERSON TO ASSUME FOR IT ANY OTHER LIABILITY IN CONNECTION
WITH THE SALE, INSTALLATION, MAINTENANCE OR USE OR THE RESULTS OF THE USE OF THE
PRODUCT(S), DOCUMENTATION NOR ANY OTHER ITEMS OR MATERIALS PROVIDED HEREUNDER IN
TERMS OF CORRECTNESS, COMPLETENESS, ACCURACY, RELIABILITY, OR OTHERWISE.

 

3.14        Return Materials Procedure. In the event that any Product purchased
hereunder is defective or fails to conform to the warranties set forth in
Section 3.12, TGC will replace the defective or non-conforming Product. All
Product returns must be assigned a Return Authorization (“RA”) number. To obtain
an RA number, the Biomet shall notify TGC of the description of the Product,
quantity, reason for return and date of purchase of Product to be returned. All
Product returns from Biomet or its customers shall be sent directly to TGC,
insured by Biomet or its customer. The RA number shall be prominently displayed
on the outside of the shipping box and the Product shall be packaged to protect
them from shipping damage.

 

3.15        TGC Inventory. Should TGC become the manufactuer of the CryoSeal II
Kit, TGC shall maintain at least a ^Removed pursuant to Rule 24b-2 under the
Securities Exchange Act of 1934^ month inventory of Fibrinogen Reagent or, if
Biomet selects TGC to manufacture Products, Products based upon the rolling
twelve (12) month estimated forecast in Section 3.4.

 

 

 

 

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ARTICLE IV

Manufacturing and Regulatory Requirements

 

4.1          Manufacturing. TGC shall be responsible for manufacturing
Fibrinogen Reagent and, if Biomet selects TGC to manufacture Products, Products
in accordance with Quality System Regulation, 21 CFR Part 820 (Medical Devices),
and applicable pharmaceutical/biologics regulations, all other applicable
regulatory requirements, and Schedule 4.1 (Quality). TGC shall notify Biomet, in
advance, of any proposed changes in the manufacturing of the Fibrinogen Reagent
and Products, and any such manufacturing changes shall be subject to Biomet’s
review and approval.

 

4.2          Technical Support. TGC shall provide Biomet with reasonable
technical support to evaluate the Product upon request by Biomet.

 

 

4.3

TGC Regulatory Responsibilities

 

(a)           Approvals. If Biomet selects TGC as its manufacturer of its
CryoSeal II Kit, TGC shall cooperate with Biomet in obtaining and maintaining
any and all reasonably necessary regulatory approvals and clearances required
for marketing and selling Fibrinogen Reagent approved with the Product for the
purpose of supporting it initial commercial sales.

 

(b)          Labeling. TGC shall label Fibrinogen Reagent with TGC’s primary
closure labeling or with labeling required by respective Regulatory Authority.

 

(c)           Alternate Fibrinogen Reagent Supplier. TGC shall identify and
qualify an alternate supplier for Fibrinogen Reagent within one hundred and
eighty (180) days after the Agreement Effective Date. The parties intend that
TGC’s secondary supplier for Fibrinogen Reagent shall be incorporated into the
Product regulatory submissions and will provide continuity of Fibrinogen Reagent
to Biomet in the event of TGC’s inability to supply Fibrinogen Reagent to
Biomet.

 

 

4.4

Biomet Regulatory Responsibilities

 

(a)           Approvals. Biomet shall be responsible for obtaining and
maintaining any and all reasonably necessary regulatory approvals and clearances
required for marketing, distributing and selling the Product in the Territory
including Biomet’s tasks identified in Schedule 4.5 (Regulatory Corrective
Action) to this Agreement.

 

(b)          Labeling. Biomet shall provide TGC with a copy of secondary closure
labeling and other labeling such as brochures and package inserts, and TGC shall
evaluate the Biomet’s labeling to ensure Biomet’s labeling is consistent with
TGC’s primary closure labeling.

 

 

 

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(c)           Regulatory Submission Coordination. Biomet shall coordinate with
TGC on preparation of regulatory submission packages for regulatory bodies in
effort to support its launch and initial commercial sales.

 

4.5          Corrective Actions. TGC and Biomet shall be responsible for
regulatory corrective actions as provided in Schedule 4.5 (Regulatory Corrective
Actions).

 

ARTICLE V

Term and Termination

 

5.1          Term. This Agreement shall commence on the date hereof and shall
continue for five (5) years.

 

5.2          Termination by Material Breach. In addition to other rights and
remedies, TGC or Biomet may terminate this Agreement by giving written notice of
termination to the other party if the other party materially breaches any term
of this Agreement.

 

(a)       This written notice must be delivered at least sixty (60) days prior
to the effective date of termination. If the other party cures the identified
breach within sixty (60) days after receipt of the notice, the notice of
termination will have no effect.

 

(b)       All monies owed by Biomet to TGC shall become immediately due and
payable notwithstanding any credit terms that may previously have been made
available, and Biomet’s obligation to make such payments shall survive the
termination of this Agreement.

 

(c)       In addition, the one-month supply of inventory will be reimbursed to
TGC and product will be sent to Biomet after payment is received.

 

5.3          Rights Upon a Change of Control. During the term of this Agreement,
if there is a Change of Control (as defined below), each party hereby covenants
and agrees that it shall ensure that the rights of the other party shall
continue unaffected on the terms and conditions contained herein, and shall
issue to the other party a written statement confirming such continuing rights
within ten (10) business days of the effective date of the Change of Control.
For purposes hereof, a Change in Control shall mean (i) the direct or indirect
sale or other disposition (in one or more related transactions to one or more
parties) of all or substantially all of the assets of a party, or (ii) the
direct or indirect transfer of more than fifty percent (50%) of the outstanding
voting interests of a party, whether in a single transaction or series of
related transactions.

 

ARTICLE VI

Insurance and Indemnification

 

 

6.1

Patent, Copyright and Proprietary Rights Indemnity

 

 

 

 

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(a)           TGC shall, at its expense, defend and indemnify Biomet and its
officers, directors, agents and employees harmless for damages and reasonable
expenses (including attorneys' fees) related to any suits or claims by a third
party brought against Biomet alleging that the CyroSeal II Kit sold pursuant to
this Agreement infringe the Intellectual Property rights of others provided that
TGC is promptly notified, rendered reasonable assistance by Biomet as required,
and permitted to direct the defense or settlement negotiations. The foregoing
obligation of TGC does not apply with respect to the CyroSeal or portions or
components thereof which is or was: (i) made in whole or in part in accordance
with Biomet’s specifications or instructions and such Biomet specifications are
the source of the alleged infringement, (ii) combined with other products,
processes or materials where the alleged infringement relates to such
combination, provided that the alleged infringement claim could not be made but
for such combination, (iii) where Biomet continues allegedly infringing activity
after TGC has determined in good faith that there is no defensible position and
being notified in writing by TGC thereof or after receiving a modification
delivered at TGC’s expense that would have avoided the alleged infringement, or
(iv) where Biomet’s use of the CyroSeal II Kit is not in accordance with this
Agreement.

 

(b)          Biomet shall indemnify and hold TGC and its officers, directors,
agents and employees harmless from all damages, settlements, attorneys' fees and
expenses related to a claim of infringement or misappropriation which is
determined by a ruling of any court of competent jurisdiction or by a
mutually-agreed arbitrator, or by mutual agreement of the parties, to have been
principally caused by Biomet’s conduct. TGC shall have no liability for any
infringing combinations arising from the integration of the CyroSeal II Kit
together with other products provided by Biomet or any third party, provided
that the alleged infringement claim could not be made but for such combination.

(c)           Should the use of CyroSeal II kit by Biomet be enjoined, or in the
event TGC wishes to minimize its potential liability hereunder, TGC may, at its
option, either: (i) modify the infringing item so that it no longer infringes
but remains fully functionally equivalent; (ii) obtain for Biomet, at TGC’s
expense, the right to continue use of such item; or (iii) if none of the
foregoing is feasible, TGC may take back such infringing item or items and
refund to Biomet the purchase price paid therefor, less amortized depreciation
on a five (5) year straight line basis. The foregoing in this Article shall be
TGC’s sole liability and Biomet’s sole remedy for infringement or
misappropriation of third party intellectual property or proprietary rights.

6.2          Indemnification for Product Liability. Biomet shall, at its
expense, defend and indemnify TGC and its officers, directors, agents and
employees harmless for damages and reasonable expenses (including attorneys'
fees) related to any suits or claims by a third party brought against TGC
alleging that the Product (excluding the CyroSeal®) sold pursuant to this
Agreement resulted in death or injury to a patient based, whether based upon a
theory of product liability, warranty, defective product, or otherwise. TGC
shall, at its expense, defend and indemnify Biomet and its officers, directors,
agents and employees harmless for damages and reasonable expenses (including
attorneys' fees) related to any suits or claims by a third party brought against
Biomet alleging that the CyroSeal® sold pursuant to this Agreement resulted in
death or injury to a patient based, whether based upon a theory of product
liability, warranty, defective product, or otherwise.

 

 

 

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6.3          General Indemnification. Each party (the “Indemnitor”) shall
defend, indemnify, and hold the other party (the “Indemnitee”) harmless from and
against any claims, losses, actions, demands or damages, including reasonable
attorney's fees, resulting from any act, omission, negligence or performance
under this Agreement by the Indemnitor, its users, agents or representatives.
This indemnity shall not apply to the extent the portion of such claim,
liability, loss, cost, damage or expense is the result of the negligence or
willful misconduct of the Indemnitee, its users, agents or representatives, or
to the extent liability is disclaimed or limited by either party under this
Article 2. The indemnity obligations set forth in this paragraph are contingent
upon: (a) the Indemnitee giving notice to the Indemnitor of any such claim(s);
(b) the Indemnitor having sole control of the defense or settlement of the
claim; and (c) at the Indemnitor’s request and expense, the Indemnitee
cooperating in the investigation and defense of such claim(s); provided,
however, that failure to give notice shall not void Indemnitor’s obligations
under this paragraph unless the failure materially and adversely harms
Indemnitor.

 

6.4          Insurance. Each party shall purchase and maintain, during the term
of this Agreement, policies of insurance which, at a minimum, include both
comprehensive general liability and product liability. Each such policy shall
have endorsements or coverage with limits of not less than $1,000,000 per
occurrence and $1,000,000 in the aggregate for general liability coverage, and
$1,000,000 per occurrence and $2,000,000 in the aggregate for product liability
coverage. In the event a party’s insurance is on a "claims made" basis, such
party shall purchase and maintain the extension of coverage or "tail" for a
period of one year following the Termination Date or last date of sale of the
Products under this Agreement, whichever is the latest date.

 

ARTICLE VII

Patents

 

7.1          Infringement by Third Parties. In the event that a third party
infringes any patent of TGC covering the Products, TGC may, in its sole
discretion, bring suit or otherwise abate the infringement. If TGC chooses to
take such action, Biomet may elect to participate in the prosecution of the
action, provided that it equally shares the cost and expenses incurred in
connection with such action. If Biomet elects to participate in the action, it
shall be entitled to receive fifty percent (50%) of any recovery made by TGC
after reimbursement of each party’s direct litigation costs and expenses. In the
event that TGC chooses not to take such action, Biomet shall be free to pursue
any such claim against a third party at its sole cost and expense and TGC shall,
without further consideration therefore, perform all reasonable acts necessary
for Biomet to pursue such a claim. Any recovery made by Biomet from such action
shall be retained by Biomet.

 

ARTICLE VIII

Confidential Information

 

8.1        Confidential Information. In performing the obligations under this
Agreement, Biomet and TGC may come into contact with, be given access to, and,
in some instances, contribute to each other’s Confidential Information. In
consideration of permitting Biomet and TGC to have access to each other’s
Confidential Information, during the term of this Agreement

 

 

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and at all times thereafter, Biomet and TGC agree that they shall not disclose
to any third party any Confidential Information of the other party without the
other party’s prior written consent. Biomet and TGC shall only make the
Confidential Information of the other party available to its employees on a
need-to-know basis and agree to take appropriate action by instruction or
agreement with their respective employees for a permitted access to the
Confidential Information to satisfy the obligations under this Article 8.1.

 

8.2        Confidential Treatment for Business Terms. In addition, incident to
TGC's filing of this Agreement with the Securities and Exchange Commission, the
parties agree that certain confidential and competitive information with respect
to pricing will not be publicly disclosed, and TGC agrees that it will request
under the United States securities laws, including Rule 24b-2 promulgated under
the Securities Exchange Act of 1934, as amended, and use its reasonable best
efforts to seek, confidential treatment of certain information contained in this
Agreement.

 

ARTICLE IX

Miscellaneous

 

9.1          Notices. Any notice, request, demand, or other communication
required or permitted under this Agreement, shall be deemed to be properly given
by the sender and received by the addressee (a) if personally delivered; (b)
three (3) days after deposit in the mails if mailed by certified or registered
air mail, postage prepaid; (c) one (1) day after being sent by facsimile with
confirmation sent as provided in (b) above; or (d) one (1) day after being sent
by commercial overnight mail, addressed as follows, and in the case of facsimile
transmission, to the appropriate facsimile number shown below:

 

 

If to TGC:

THERMOGENESIS CORP.

 

2711 Citrus Road

 

Rancho Cordova, CA 95742    Facsimile No.: (916) 858-5197

 

Attention: Kevin Simpson, President & COO

 

With a copy to:

Bullivant Houser Bailey P.C.

 

1415 L Street, Suite 1000

Sacramento, CA 95814

Facsimile No.: (916) 930-2550

Attention: David Adams, Esq.

 

If to Biomet:

BIOMET, INC.

56 East Bell Drive

Warsaw, IN 46582

Facsimile: (574) 372-1960

Attention: General Counsel

 

 

With a copy to:

BIOMET BIOLOGICS, INC.

56 East Bell Drive

Facsimile: (574) 268-2742

Attention: Mr. Joel Higgins

Vice President, Technical Affairs

 

 

 

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9.2       Relationship of the Parties. Nothing contained in this Agreement shall
be construed to place the parties in a relationship of partners, joint ventures,
or principal and agent. Neither party is authorized to assume or undertake any
obligation of any kind, expressed or implied, on behalf of the other party.

 

9.3       Non-Assignment. Neither party shall assign any of its rights or
obligations hereunder without the prior written consent of the other party;
provided, however, that neither parties’ consent shall be required in connection
with the transfer of the other party’s rights or obligations under this
Agreement incident to a merger, consolidation, reorganization or acquisition of
substantially all the assets of either party.

 

9.4       Waiver of Breach. The waiver or failure of either party to exercise in
any respect any right provided for under this Agreement shall not be deemed to
be a waiver of any future right hereunder.

 

9.5       Legal Interpretation. This Agreement shall be construed and
interpreted in accordance with the law of the State of Indiana and the federal
law of the United States, without regards to conflicts of laws principles.

 

9.6       Arbitration. All disputes, claims or controversies arising from or
relating to this contract or the relationships which result from this contract
shall be resolved by binding arbitration under the rules of the then current CPR
Institute for Dispute Resolution, by one arbitrator, mutually selected by the
parties. The decision of the arbitrator shall be final. The place of arbitration
shall be mutually agreed to by the parties. This arbitration contract is made
pursuant to a transaction in interstate commerce, and shall be governed by the
Federal Arbitration Act. Any judgment upon the award rendered by the arbitrator
may be entered by any court having jurisdiction thereof. The parties voluntarily
and knowingly waive any right they have to a jury trial. The arbitrator is not
empowered to award punitive damages or damages in excess of compensatory damages
and each party hereby irrevocably waives any right to recover any damages other
than compensatory damages with respect to any dispute resolved by arbitration.
The parties also agree that neither shall have the right to participate as a
representative or member of any class of claimants pertaining to a claim subject
to arbitration under this agreement. The parties further agree that neither
shall have the right to consolidate claims subject to arbitration under this
agreement.

 

9.7       Modification. This Agreement may not be modified or altered except by
written instrument duly executed by Biomet and TGC.

 

9.8       Entire Agreement. This Agreement contains the entire agreement of the
parties hereto with respect to the subject matter hereof and shall be deemed to
supersede all prior agreements, whether written or oral, and the terms and
provisions of any such prior agreement shall be deemed to have been merged into
this Agreement.

 

 

 

 

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

 

ThermoGenesis Corp.

 

Biomet Biologics, Inc.

 

 

By                                   

Kevin Simpson

President & Chief Operating Officer

 

 

 

 

By                                  

Joel Higgins
Vice President, Technical Affairs

 

Schedules:

 

1.8

Field of Use

 

1.12 (a)

Customer Requirements

 

1.12 (b)

Product Specification

 

2.2

Sublicensees

 

3.1

Pricing and Minimum Purchases

4.1

Quality

 

4.5

Regulatory Corrective Actions

 

 

 

[Signature page to ThermoGenesis Corp. and Biomet Biologics, Inc. Product
Development and Supply Agreement for Fibrinogen Concentration Kit Effective Date
July 28, 2006]

 

 

 

 

 

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