Exhibit 10.1


 


CONFIDENTIAL TREATMENT REQUESTED


 


SUPPLY
AGREEMENT


 


THIS SUPPLY AGREEMENT (the “Agreement”) is made and
entered into as of this 14th day of January, 2005 (the “Effective Date”), by
and between NuVasive, Inc. (“NuVasive”), a Delaware corporation having its
principal offices at 10065 Old Grove Road, San Diego, California 92131; and
Blood and Tissue Center of Central Texas (“BTC”), a non-profit organization,
having its principal place of business at 4300 North Lamar Boulevard, Austin,
Texas 78756-3421, facsimile number (512) 206-1213.  BTC and NuVasive are sometimes individually
referred to as a “Party” and together referred to herein as the “Parties.”


 


RECITALS:


 


WHEREAS, BTC
procures, processes and distributes certain human allograft tissues for
transplantation;


 


WHEREAS, NuVasive
desires to engage BTC to process, package, and send to NuVasive for
distribution certain allograft bone, all subject to and in accordance with
specifications and other terms of this Agreement.


 


WHEREAS, BTC and
NuVasive, in recognition of the need for and benefits that may result from the
availability of human allograft bone tissues for transplantation, desire to
cooperate with each other in the provision, processing and distribution of such
tissue.


 


AGREEMENT:


 


NOW THEREFORE, in consideration of the mutual
covenants and promises contained herein and for other good and valuable
consideration (the receipt, adequacy and legal sufficiency of which are hereby
acknowledged) the Parties hereby agree as follows:


 


1.             Processing
and Transfer Responsibilities of BTC.


 


(A)          Processing.  BTC shall from time to time use its best
efforts to process, package, label, store and transfer to NuVasive the human
allograft bone listed and more particularly described on Exhibit A
hereto (the “Tissues”), as such Exhibit may be amended by the Parties from time
to time, in accordance with the specifications pertaining to the Tissues
imposed by NuVasive set forth on Exhibit A (the “Specifications”).  BTC agrees that BTC shall be prohibited from
processing, cutting, packaging and/or otherwise providing tissues to third
parties that use or employ or incorporate the intellectual property of
NuVasive.  BTC recognizes that NuVasive’s


 










***Certain confidential
portions of this Exhibit were omitted and replaced with “***” (the “Mark”).  This Exhibit has been filed separately with
the Secretary of the Securities and Exchange Commission without the Mark
pursuant to the Company’s application requesting confidential treatment under
Rule 24b-2 under the 1934 Act.


 





















 


customer list is considered Confidential Information
in accordance with this Agreement.  BTC
therefore agrees that BTC shall be prohibited from selling or otherwise
providing tissues, either processed for NuVasive by BTC, or that compete with
such products, directly to any NuVasive customers based on any NuVasive
customer information received by BTC during the course of this Agreement.  However, BTC may continue to sell or
otherwise provide such tissue to NuVasive customers who were already BTC
customers as of the effective date of this Agreement, or new customers who are
subsequently obtained through the normal course of business.


 


(B)           Change
of Specifications.  NuVasive may
modify, change or supplement the Specifications upon 60 days’ written notice to
BTC or upon the mutual agreement of the parties; provided, however, that any
requested modifications, changes or supplements shall not affect existing firm
purchase orders unless both parties agree to such changes.  BTC shall notify NuVasive at least 30 days in
advance of any change in any processing procedures or protocols.  NuVasive shall pay for any grafts that are
already in production under the previous specifications as of the date the new
specifications are effective.


 


(C)           Forecast
and Inventory.


 


(i)            NuVasive
shall provide BTC with a month-by-month forecast of its anticipated Tissue
requirements for each calendar year, beginning with the 2005 calendar year, not
later than 30 days prior to the commencement of the applicable calendar year.  Within 10 days of BTC’s receipt of each
calendar year forecast, BTC shall indicate whether it anticipates being able to
meet such forecast.  NuVasive may at any
time update any such forecast for any monthly period(s) beginning 30 days or more
following the date NuVasive provides written notice of such update.  Such update(s) may be contained in any
writing, including a purchase order or an MRP report.  BTC shall use its best efforts to maintain in
inventory a stock of a minimum amount of Tissue material equal to the amount
forecast by NuVasive for the next month’s forecasted volume.  For instance, if the forecast for January through
March is 10, 12 and 14 units respectively, then BTC shall keep 12 units on
the shelf in January (February’s forecast) and 14 units in February (March’s
forecast).  BTC shall use FIFO (first in,
first out) inventory procedures with respect to the Tissues so that older stock
is used up first.  BTC will make its best
effort to process tissue according to NuVasive forecast.


 


(ii)           BTC
will required an 6-8 week lead time for processing tissue products.  For instance, if the forecast for January is
10 those grafts will not be available until March for release and
distribution to NuVasive.  BTC will
contact NuVasive when the grafts are ready for distribution.  BTC will request a PO from NuVasive once
grafts are ready for release.  In the
event that the tissue is not sent to NuVasive when the tissue is released to
distribution stock, BTC will keep the units produced from forecasted amounts in
stock until they are ready to be distributed to NuVasive.  It is not BTC’s intention to keep tissue for
NuVasive past 1 month after the tissue is released to


 


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distribution stock. 
BTC shall use FIFO (first in, first out) inventory procedures with
respect to the Tissues so that older stock is used up first.


 


(D)          Inspection
of Facilities.  NuVasive shall have
the right to inspect the processing facility where the Tissues are to be
processed (the “Facility”) between the hours of 9:00 a.m. and 5:00 p.m. on any
business day upon giving no less than 3 business days written notice during the
term of this Agreement in order to ensure BTC’s continuing compliance with the
terms and conditions of this Agreement. 
The performance of NuVasive’s obligations under this Agreement is
expressly conditioned upon NuVasive’s ability to regularly inspect the
Facility, NuVasive’s ability to regularly review BTC’s processing practices,
and NuVasive’s being reasonably satisfied that the Facility and BTC’s
processing practices conform to all of requirements set forth in this Agreement
and imposed by Governing Law (as defined in Section 12) and all applicable
regulations.  BTC shall request an audit
of the distribution facility (s) for NuVasive at least once every 2 years
according to AATB Standards.


 


(E)           NuVasive
Instrumentation.  NuVasive may
provide BTC with certain instrumentation for processing, cutting, packaging
and/or otherwise providing Tissues to NuVasive under this Agreement, including
but not limited to packaging equipment for providing the Tissues in sterile
saline under US Patent No. 6,739,112 owned by NuVasive, and stamping, cutting,
holding and/or milling equipment for manufacturing the Tissues according to
this Agreement (“NuVasive Instrumentation”). 
BTC agrees that the NuVasive Instrumentation (along with any and all
proprietary rights pertaining thereto, including any improvements made by BTC)
shall be the sole and exclusive property of NuVasive.  BTC shall have a limited license to use
NuVasive Instrumentation (and the proprietary rights thereto) solely for use in
providing Tissues to NuVasive during the term of this Agreement.  BTC agrees that BTC shall be strictly
prohibited from processing, cutting, packaging and/or otherwise providing
tissues to third parties using NuVasive Instrumentation and/or the proprietary
rights thereto.  BTC shall maintain the
NuVasive Instrumentation in good working condition while in BTC’s use, care or
possession, shall perform all maintenance and repairs required to keep the
NuVasive Instrumentation in such condition, and hereby assumes all
responsibility and liability for any loss, theft or destruction of the NuVasive
Instrumentation prior to its return to NuVasive, as well as any damage, injury
or harm caused by the NuVasive Instrumentation or BTC’s use thereof prior to
its return to NuVasive.  Upon any
termination of this Agreement, BTC’s limited license to use the NuVasive
Instrumentation (and the proprietary rights thereto) shall immediately cease
and BTC shall promptly return the NuVasive Instrumentation to NuVasive in good
working condition.


 


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2.             Responsibilities
of NuVasive.


 


(A)          Payments.  NuVasive shall promptly pay for the Tissues
shipped to it as per the terms of Section 3 below.


 


(B)           Specifications.  NuVasive shall provide the written
Specifications to BTC in sufficient detail to enable BTC to process the Tissues
as efficiently as possible.


 


(C)           Inspection
of Facilities.  BTC shall have the
right to inspect the handling and storage facility where the Tissues are to be
stored by NuVasive pending further shipment by NuVasive (the “NuVasive Facility”)
between the hours of 9:00 a.m. and 5:00 p.m. on any business day upon giving no
less than 24 hours written notice during the term of this Agreement in order to
ensure NuVasive’s continuing compliance with the terms and conditions of this
Agreement.  The performance of BTC’s
obligations under this Agreement is expressly conditioned upon BTC’s ability to
regularly inspect the NuVasive Facility, BTC’s ability to regularly review
NuVasive’s handling and storing practices, and BTC’s being reasonably satisfied
that the NuVasive Facility and NuVasive’s handling and storage practices
conform to all of requirements set forth in this Agreement and imposed by
Governing Law (as defined in Section 12) and all applicable regulations.


 


3.             Professional
Fees, Purchase Orders, and Terms of Payment.


 


(A)          Professional
Fees.  In consideration of services
performed by BTC and the Tissues to be processed by BTC, NuVasive shall pay to
BTC per particular type of Tissue as set forth in detail on Exhibit A attached
hereto and made a part hereof.  BTC will
invoice NuVasive for all Tissues shipped to NuVasive as of the date of each
shipment and payment from NuVasive shall be due within 30 days from the date of
invoice.


 


(B)           Purchase
Orders and Terms of Payment. 
NuVasive shall place orders for Tissues by transmitting a written
purchase order via facsimile, e-mail or First Class Mail to BTC at the address
or facsimile number identified in the Preamble of this Agreement.  The terms and conditions set forth in such
purchase orders shall apply to BTC’s fee-for-service to NuVasive and delivery
of the Tissues to NuVasive.  Except as
otherwise set forth under this Agreement, payment for the Tissues shall be due
to BTC no later than 30 days following date of shipment to NuVasive.  NuVasive shall be responsible for invoicing
hospitals and collecting payment from its Customers (end users).  NuVasive’s obligation to pay BTC shall not be
dependent upon to NuVasive’s actual collection of revenues from its Customers.


 


4.             Delivery
and Title.


 


(A)          Timing
and Place of Delivery.  The Parties
acknowledge and agree that BTC will ship the Tissues directly to NuVasive and
that NuVasive will maintain an


 


4





















 


inventory of such Tissues for distribution by NuVasive
to its customers.  BTC shall use its best
efforts to ship the Tissues within twenty-four (24) hours of the time the
purchase order is received if NuVasive requests expedited delivery.  If expedited delivery is not requested, BTC
shall ship the Tissues in accordance with the time period specified in the
purchase order.  BTC shall provide
adequate insurance for the Tissues until such Tissues(s) have been received by
NuVasive.  Title and risk of loss and
damage with respect to all Tissues purchased by NuVasive under this Agreement
shall remain with BTC until NuVasive has received the Tissues at its designated
address.  Receipt shall be evidenced by
the signature of any NuVasive employee on the carrier’s delivery documentation,
or other documentation provided by the carrier.


 


(B)           Packaging.  All Tissues shall be suitably packed for
shipment in containers adequate to insure safe arrival of the Tissues at
NuVasive’s designated delivery destination. 
BTC shall supply all packaging and labeling materials for the Tissues;
provided, however, such packaging and labeling must be in accordance with
specifications and format provided by NuVasive. 
BTC shall mark all containers with necessary shipping and handling
information, purchase order numbers and date of shipment.  An itemized packing list shall accompany each
shipment, which will also contain customer purchase order number(s), catalog
numbers, and serial numbers of the Tissues.


 


(C)           Defective
Products/Return.  Within five days of
receipt NuVasive will inspect the Tissues in order to determine their
suitability and their compliance with the terms of this Agreement and Governing
Law.  If NuVasive determines within such
limited time that any Tissues do not comply with the Specifications, Governing
Law, or any representation, warranty or other provisions of this Agreement (any
such Tissue, a (“Returned Tissue”), NuVasive shall notify BTC of the Returned
Tissue, identify the defects in the Returned Tissue and return the same to BTC
at BTC’s expense.  If at any time the
Parties agree, are deemed to agree, or a nonappellable order determines, that
any Returned Tissue does not comply with the Specifications, Governing Law, or
any representation, warranty or other provisions of this Agreement, such
Returned Tissue shall be deemed to be a “Defective Tissue”.  BTC shall have a period of thirty (30) days
from receipt of any Returned Tissue during which to evaluate and respond to
NuVasive’s claim that the Tissue is a Defective Tissue.  If NuVasive has not received a written notice
of disagreement from BTC by the end of such thirty (30) day period, the
Returned Tissue shall be deemed to be a Defective Tissue.  If NuVasive receives a written notice of
disagreement by the end of such thirty (30) day period, the Parties agree to
negotiate in good faith regarding whether and/or to what extent the Returned
Tissue is a Defective Tissue for a period of thirty (30) days from NuVasive’s
receipt of such notice prior to commencing any legal action or pursuing any
other remedy with respect to the Returned Tissue.  With respect to any Tissues sold or supplied
under this Agreement, BTC shall be prepared to promptly address corrective
actions and determine root causes of defects.


 


5





















 


BTC will report in writing (or by form supplied by
NuVasive) how the root causes have been addressed and corrected within 30 days
of being notified of the defect.


 


(D)          Payment
of Fee-for-Service of Returned Product. 
If NuVasive returns to BTC a Returned Tissue prior to paying for such
Returned Tissue, NuVasive shall have no obligation to pay for the Returned
Tissue unless and until the Parties agree or a nonappellable order determines
that the Tissue was not a Defective Tissue. 
If NuVasive returns a Returned Tissue after paying for such Returned
Tissue, NuVasive may, in its discretion (i) offset the fees paid for the Returned
Tissue against any yet unpaid invoice received from BTC, or (ii) require BTC to
reimburse NuVasive for the fees paid with respect to the Returned Tissue.  If following either (i) or (ii) above, the
Returned Tissue is determined by agreement of the Parties or a nonappellable
order not to be a Defective Tissue, NuVasive shall promptly pay to BTC the fees
for the Returned Tissue.


 


5.             BTC’s
Representations, Warranties, and Covenants. 
In addition to the other matters set forth herein, BTC hereby represents,
warrants, and covenants, on a continuing basis, to NuVasive as follows:


 


(A)          Compliance
with Laws and Specifications.  BTC
shall comply fully with the American Association of Tissue Banks (“AATB”)
standards and all federal and state laws, regulations, rules and orders
(including without limitation those of the Federal Food and Drug Administration
(the “FDA”)) governing the recovery of human tissues for, processing, storage,
packaging, shipping, labeling and aspects of the production and handling of the
Tissues (“Governing Laws”), including, without limitation, the Good Tissue
Banking Practices, as they become effective, and labeling requirements
contained in 21 C.F.R. Parts 1270 and 1271. 
BTC represents and warrants that all Tissues will be recovered, processed,
stored, packaged, shipped, labeled and otherwise produced and handled in
accordance with all applicable federal and state laws and regulations, AATB
standards applicable to human tissues, as well as the Specifications.  BTC will determine medical suitability,
process, and ship tissues to NuVasive according to AATB and Applicable FDA
standards.  NuVasive shall be registered
with the FDA and shall distribute tissue according to AATB and applicable FDA
standards.


 


(B)           Approvals.  BTC shall obtain and maintain, at its cost,
all governmental, administrative and other approvals, licenses, permits and
other authorizations and registrations necessary for the operation and conduct
of its business and performance of its obligations under this Agreement, including,
without limitation, its accreditation from the American Association of Tissue
Banks, FDA tissue establishment registration and listing and all required state
licenses.


 


(C)           Due
Authorization; Validity.  The
execution, delivery and performance of this Agreement have been duly authorized
by all necessary corporate or other action on the part of BTC, and upon
execution and delivery, this Agreement will constitute a valid


 


6





















 


and binding obligation of BTC enforceable against BTC
in accordance with its terms except as enforceability may be limited by
bankruptcy, insolvency and other similar laws affecting claims and rights
generally or by general equitable principles.


 


(D)          Litigation.  As of the date of this Agreement, BTC has not
been served with or otherwise notified in writing of any judgment, suit, claim,
action, arbitration, legal, administrative, or other proceeding or government
investigation, nor to BTC’s knowledge are any such actions pending or threatened,
with respect to the Tissues or BTC’s assets or business which would materially
adversely affect BTC’s ability to conduct business or to perform its
obligations under this Agreement.  BTC
agrees to notify NuVasive within twenty four (24) hours in the event BTC is
served with or otherwise notified in writing of any judgment, suit, claim,
action, arbitration, legal, administrative, or other proceeding or government
investigation, or in the event BTC obtains knowledge any such actions are
pending or threatened, with respect to the Tissues or BTC’s assets or business
which would materially adversely affect BTC’s ability to conduct business or to
perform its obligations under this Agreement.


 


6.             NuVasive’s
Representations, Warranties and Covenants.


 


(A)          Compliance
with Laws and Specifications. 
NuVasive shall comply fully with the American Association of Tissue
Banks (“AATB”) standards and all federal and state laws, regulations, rules and
orders (including without limitation those of the Federal Food and Drug
Administration (the “FDA”)) governing the recovery of human tissues for,
storage, packaging, shipping, labeling and aspects of the handling of the
Tissues (“Governing Laws”), including, without limitation, the Good Tissue
Banking Practices and labeling requirements contained in 21 C.F.R. Parts 1270
and 1271.  NuVasive represents and
warrants that all Tissues will be stored, packaged, shipped, labeled and
otherwise handled in accordance with all applicable federal and state laws and
regulations, AATB standards applicable to human tissue, as well as the
Specifications.


 


(B)           Approvals.  NuVasive shall obtain and maintain, at its
cost, all governmental, administrative and other approvals, licenses, permits
and other authorizations and registrations necessary for the operation and
conduct of its business and performance of its obligations under this
Agreement, including, without limitation, FDA tissue establishment registration
and listing and all required state licenses.


 


(C)           Due
Authorization; Validity.  The execution,
delivery and performance of this Agreement have been duly authorized by all
necessary corporate or other action on the part of NuVasive, and upon execution
and delivery, this Agreement will constitute a valid and binding obligation of
NuVasive enforceable against NuVasive in accordance with its terms except as
enforceability may be limited by bankruptcy, insolvency and other similar laws
affecting claims and rights generally or by general equitable principles.


 


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(D)          Litigation.  As of the date of this Agreement, NuVasive
has not been served with or otherwise notified in writing of any judgment,
suit, claim, action, arbitration, legal, administrative, or other proceeding or
government investigation, nor to NuVasive’s knowledge are any such actions
pending or threatened, with respect to the Tissues or NuVasive’s assets or
business which would materially adversely affect NuVasive’s ability to conduct
business or to perform its obligations under this Agreement.  NuVasive agrees to notify BTC within twenty
four (24) hours in the event NuVasive is served with or otherwise notified in
writing of any judgment, suit, claim, action, arbitration, legal,
administrative, or other proceeding or government investigation, or in the
event NuVasive obtains knowledge any such actions are pending or threatened,
with respect to the Tissues or NuVasive’s assets or business which would
materially adversely affect NuVasive’s ability to conduct business or to
perform its obligations under this Agreement.


 


(E)           Specifications.  The Specifications as set forth on Exhibit A
and as amended from time to time by NuVasive do not infringe upon the patent or
other property rights of third parties and NuVasive shall defend against any such
claims asserted by such third party against BTC.


 


7.             Indemnification.


 


(A)          Each
party (the “Indemnifying Party”) shall indemnify, defend and hold harmless the
other (The “Indemnified Party”), its shareholders, subsidiaries and affiliates,
and its and their respective officers, directors, members, trustees, agents,
employees and customers, and their successors and assigns, from and against any
and all claims, demands, actions, liabilities, fees, suits, causes of action,
damages, penalties, recoveries and deficiencies, costs and expenses (including,
without limitation, attorneys’ fees) (collectively “Damages”) which arise out
of or relate to (1) any breach by the Indemnifying Party of any of its
representations, covenants or warranties set forth in this Agreement, or (2)
any negligence by the Indemnifying Party 
arising out of, in connection with or resulting from the processing,
supply, or transfer of any Tissue.  Such
indemnification shall not be limited to claims brought by third parties.


 


8.             Insurance
and Notice of Claims.


 


(A)          BTC
represents and warrants that it is currently insured and covenants that at all
times during the term of this Agreement it will maintain a comprehensive
general liability insurance policy (including products liability coverage and
payment of attorneys fees coverage) with a financially sound and reputable
insurer which is sufficient to adequately protect against the risks associated
with its ongoing business, including the risks which might possibly arise in
connection with the transactions contemplated by this Agreement, and including
without limitation, professional liability insurance, with minimum coverage
amounts of $3,000,000.00 per occurrence and in the aggregate.  BTC


 


8





















 


agrees to provide NuVasive a copy of its certificate
of insurance upon request and to provide thirty (30) days advanced written
notice prior to terminating any such policy.


 


(B)           NuVasive
represents and warrants that it is currently insured and covenants that at all
times during the term of this Agreement it will maintain a comprehensive
general liability insurance policy (including products liability coverage and
payment of attorneys fees coverage) with a financially sound and reputable
insurer which is sufficient to adequately protect against the risks associated
with its ongoing business, including the risks which might possibly arise in
connection with the transactions contemplated by this Agreement, and including
without limitation, professional liability insurance, with minimum coverage
amounts of $3,000,000.00 per occurrence and in the aggregate.  NuVasive agrees to provide BTC a copy of its
certificate of insurance upon request and to provide thirty (30) days advanced
written notice prior to terminating any such policy.


 


(C)           Notification
of Claims.  Each Party agrees to
notify the other in writing as it becomes aware of any liability claims
regarding the Tissues and any customer complaints or suspected adverse
reactions or outcomes concerning the Tissues. 
Each party agrees to cooperate in the evaluation of such events.


 


9.             Confidentiality
and Intellectual Property.


 


(A)          Confidential
Information.  The “Confidential
Information” of any Party shall mean any information of a confidential or
proprietary nature of such Party and shall include, without limitation, all
business, strategy, pricing and marketing information of such Party, all
patents, copyrights, trademarks, service marks, trade dress and other
proprietary rights and applications for or with respect to any of the foregoing
of such Party, and all discoveries, inventions, improvements, documents,
know-how, proprietary rights and ideas related to any process, method, formula,
machine, device, manufacture, composition of matter, plan or design owned or developed
by such  Party, whether patentable or
not, that the other Party acquires under, through, as a result of or during the
term of this Agreement.  Notwithstanding
the foregoing, a Party’s Confidential Information shall not include any
information which:  (i) has been
published or otherwise becomes a matter of public knowledge by any means other
than the other Party’s default in the observance or performance of any term or
provision of this Agreement or any other obligation on its part to be observed
and performed; (ii) was known to the other Party at the time of such disclosure
without a requirement of confidentiality, as evidenced by its written business
records; (iii) is at any time disclosed to the other Party by any person or
entity not a party hereto whom the other Party believes, after reasonable
inquiry, has the right to so disclose the same; or (iv) is required to be
disclosed in compliance with any law governmental regulation, or court order,
provided that the Party disclosing the same shall notify the Party to which
such information belongs ten (10) days in advance of any such disclosure, if
feasible.


 


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(B)           NuVasive’s
Confidential Information.


 


(i)            BTC
hereby confirms that NuVasive has and shall retain the sole right, title and
interest in and to NuVasive’s Confidential Information.  Subject to the conditions, restrictions and
obligations contained in this Agreement, NuVasive hereby grants to BTC a
limited, non-exclusive, worldwide, royalty free license (without the right to
sublicense or transfer) to use NuVasive’s Confidential Information solely for
the purposes of performing BTC’s obligations under this Agreement.  No other rights or licenses are granted by
NuVasive to BTC relating to NuVasive’s Confidential Information or any other
proprietary rights of NuVasive.  Upon the
termination or expiration of this Agreement, the licenses granted herein by
NuVasive shall terminate, and BTC shall cease all further use of NuVasive’s
Confidential Information or any other proprietary rights of NuVasive except
with respect to Tissues that conform to the Specifications and which were being
held by BTC in its work-in-process or finished inventory at the time of
termination.  Any such work-in-process
inventory, to the extent it cannot be salvaged for another use (as determined
in good faith by the Parties), shall be finished, and all such finished
inventory shall be shipped to NuVasive. 
NuVasive shall pay for such inventory according to the terms of this
agreement.


 


(ii)           BTC
shall maintain the NuVasive’s Confidential Information in confidence and shall
not disclose it to any person or entity not a party hereto or use the same for
its benefit or the benefit of any person or entity other than NuVasive.  BTC shall maintain complete and accurate
written records of NuVasive’s Confidential Information, mark same with such
legends as NuVasive may reasonably direct, and promptly deliver the same to
NuVasive upon written request upon the expiration or termination hereof or at
such other times as NuVasive may request, except that in any such event,
counsel for BTC may retain one copy thereof solely for use should any dispute
between the Parties arise.  In addition,
both during the term and after the expiration or termination of this Agreement,
BTC shall take such other reasonable actions as NuVasive may request to enable
NuVasive to publish, protect by litigation or otherwise, or further its title
to any of NuVasive’s Confidential Information.


 


(C)           BTC’s
Confidential Information.


 


(i)            NuVasive
hereby confirms that BTC has and shall retain the sole right, title and
interest in and to BTC’s Confidential Information.  Subject to the conditions, restrictions and
obligations contained in this Agreement, BTC hereby grants to NuVasive a
limited, non-exclusive, worldwide, royalty free license to use BTC’s
Confidential Information solely for the purposes of exercising NuVasive’s
rights and performing NuVasive’s obligations under this Agreement and using the
Tissues for their intended purpose.  No
other rights or licenses are granted by BTC to NuVasive relating to BTC’s
Confidential Information or any other proprietary rights of BTC.  Upon the termination or expiration of this
Agreement, the licenses granted herein by BTC shall


 


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terminate, and NuVasive shall cease all further use of
BTC’s Confidential Information or any other proprietary rights of BTC except
with respect to Tissues that conform to the Specifications and which were being
held by NuVasive in its inventory at the time of termination.  Such inventory may be sold by NuVasive after
the expiration of this Agreement in the ordinary course of its business.


 


(ii)           NuVasive
shall maintain BTC’s Confidential Information in confidence and will not
disclose it to any person or entity not a party hereto or use same for its
benefit or the benefit of any person or entity other than BTC.  NuVasive shall maintain complete and accurate
written records of BTC’s Confidential Information, mark the same with such
legends as BTC may reasonably direct, and promptly deliver the same to BTC upon
written request upon the expiration or termination hereof or at such other
times as BTC may request, except that in any such event, counsel for NuVasive
may retain one copy thereof solely for use should any dispute between the
Parties arise.  In addition, both during
the term and after the expiration or termination of this Agreement, NuVasive
shall take such other reasonable actions as BTC may request to enable BTC to
publish, protect by litigation or otherwise, or further its title to any of BTC’s
Confidential Information.


 


(D)          Intellectual
Property.  BTC warrants that all
right, title and interest to any intellectual property developed during the
term of this Agreement which relates in any manner to allograft processing,
manufacture, and/or packaging (whether developed in whole or in part,
independently, jointly with others, or in conjunction with NuVasive) (“Intellectual
Property”) shall be owned in its entirety by NuVasive.  BTC agrees to promptly and fully disclose and
assign to NuVasive all inventions made by BTC resulting from or arising out of
BTC’s services hereunder, and BTC will, if NuVasive shall so request, assist in
every proper way (at the expense of NuVasive) to obtain for the benefit of
NuVasive patents on such inventions in any and all countries, at NuVasive’s
discretion); all such inventions and resulting Intellectual Property to be and
remain the sole property of NuVasive whether or not disclosed, assigned or
patented.  BTC agrees that any
copyrightable works created by BTC (in whole or in part, either alone or
jointly with others) resulting from or arising out of BTC’s services hereunder
are “works made for hire” for NuVasive as that term is defined and used in the
United States Copyright Act, Title 17 of the United States Code.  In the event that such “work made for hire”
designation is challenged, BTC hereby assigns any and all of his rights to such
copyrightable works to NuVasive, which assignment shall be effective for any
such copyrightable work as of the date of its creation.  BTC further agrees that if NuVasive is unable
because of BTC’s dissolution, or for any other reason, to secure BTC’s
signature to apply for or to pursue any application for any United States or
foreign patents or mask work or copyright registrations covering the inventions
assigned to NuVasive above, then BTC hereby irrevocably designates and appoints
NuVasive and its duly authorized officers and agents as its agent and attorney
in fact, to act for and in its behalf and stead to execute and file any such
applications and to do all other lawfully permitted acts to


 


11





















 


further the prosecution and issuance of patents,
copyright and mask work registrations thereon with the same legal force and
effect as if executed by BTC, as the case may be.


 


10.           Term
and Termination.


 


(A)          Term.  The term of this Agreement shall commence on
the Effective Date and continue for a period of three (3) years following the
Effective Date and, unless earlier terminated as provided herein, shall
automatically renew for an additional one-year term on each anniversary of the
Effective Date unless either party gives written notice to terminate 60 days
prior to completion of the first three year term or additional one –year
anniversary date.


 


(B)           Early
Termination.  This Agreement may be
terminated as otherwise provided in this Agreement, and as follows:


 


(i)            By
either party if the other party fails to perform or otherwise breaches any of
its obligations hereunder, by giving notice of its intent to terminate and
stating the grounds therefore.  The party
receiving such notice shall have thirty (30) days from the receipt thereof to
cure the failure or breach, at which time this Agreement shall terminate if
such failure or breach has not been cured. 
In no event, however, shall such notice of intention to terminate be
deemed to waive any rights to damages or any other remedy which the party
giving notice of breach may have as a consequence of such failure or breach.


 


(ii)           By
NuVasive, if BTC sells all or substantially all of its assets or securities to
another person or entity or merges into another person or entity, which
termination shall not be unreasonably exercised by NuVasive.


 


(C)           Effect
of Termination.  If this Agreement is
terminated, the parties shall be released from all obligations, duties imposed
or assumed hereunder, except as otherwise provided in this Agreement.  Termination of this Agreement, for whatever
reason, shall not affect the obligation of either party to make payments for
which such party is liable prior to such termination, any remedies of NuVasive
under Section 5, any Party’s indemnification obligations under Section 7
or the obligations of confidentiality specified in Section 9 hereof.


 


11.           Notices.  All notices required or permitted to be given
under this Agreement shall be in writing and shall be addressed to the Party at
the address and/or facsimile number first set forth above (which either party
may change at any time upon five days written notice).  Notices may be served by certified or
registered mail, postage paid, with return receipt requested, by private
courier, prepaid, by telex, facsimile, or other telecommunication device
capable of transmitting or creating a written record, or personally.  Mailed notices shall be deemed delivered five
days after mailing, properly addressed.


 


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12.           Governing
Law; Venue.  The parties intend that
this Agreement shall be governed by and construed in accordance with the laws
of the state of California applicable to contracts made and wholly performed
within California by persons domiciled in California and exclusive of choice of
law rules.  The parties hereby consent
and submit to the exclusive jurisdiction of and venue in California and federal
courts located in the San Diego County, California for any litigation arising
out of this Agreement.


 


13.           Integration;
Amendment.  This Agreement and the
other documents contemplated hereby constitute the entire agreement of the
parties relating to the subject matter hereof. 
There are no promises, terms, conditions, obligations, or warranties
other than those contained in this Agreement or amendments hereto..  No modification of this Agreement (by
purchase order, invoice or otherwise (except as provided in Section 2(C))
shall be of any force or effect unless such modification is in writing, refers
specifically to this Agreement, contains language indicating it is a
modification of this Agreement and is signed by both parties.


 


14.           Waiver.  No provision of this Agreement shall be
deemed to have been waived unless such waiver is in writing signed by the
waiving Party.  No failure by any Party
to insist upon the strict performance of any provision of this Agreement, or to
exercise any right or remedy consequent upon a breach thereof, shall constitute
a waiver of any such breach of such provision or of any other provision.  No waiver of any provision of this Agreement
shall be deemed a waiver of any other provision of this Agreement or a waiver
of such provision with respect to any subsequent breach, unless expressly
provided in writing.


 


15.           Attorney’s
Fees.  If any suit or action arising
out of or related to this Agreement is brought by any Party, the prevailing
Party shall be entitled to recover the costs and fees (including reasonable
attorneys’ fees) incurred by such Party in such suit or action, including
without limitation any post trial or appellate proceeding.


 


16.           Exhibits.  Each Exhibit to this Agreement shall be
considered a part hereof as if set forth herein in full.


 


17.           Continuing
Agreement; Binding Effect.  This
Agreement is a continuing agreement and shall remain in full force and effect
until all obligations of the parties hereunder have been fully performed or
otherwise discharged.


 


18.           Assignment.  This Agreement shall be assignable by either
party upon written consent of the other party (not to be unreasonably withheld)
and shall bind and inure to the benefit of, and be enforceable by, the Parties
hereto and their respective successors, heirs, and assigns.


 


13





















 


19.           Counterparts.  This Agreement may be executed in any number
of counterparts, all of which when taken together shall constitute one
agreement binding on all parties, notwithstanding that all parties are not
signatories to the same counterpart.


 


20.           Invalidity.  The invalidity or unenforceability of any
term or provision of this Agreement shall not affect the other terms and
provisions, and such invalid or unenforceable term or provision will, in all
events, be construed and enforced to the fullest extent permissible under
applicable law.


 


21.           Force
Majeure.  Neither Party shall be
responsible for any loss or damage resulting from any delay in performing or
failure to perform any provisions of this Agreement, so long as any such
failure or delay arises from a fire, explosion, flood, storm, earthquake, tidal
wave, terrorism, war, military operation, national emergency, civil commotion,
strike or other difference with workers or unions that is beyond the control of
the Parties hereto.


 


22.           Relationship.  The Parties are acting independently and
shall at all times act as independent contractors of each other in the
manufacture and sale of the Products and are not partners, joint venturers,
agents, or legal representatives of each other, for any purpose.  Neither Party shall have any right or power
to act for or bind the other, in any respect, to pledge its credit, to accept
any service of process upon it, or to receive any notices of any nature
whatsoever.


 


23.           Publicity.  Neither Party shall initiate any publicity,
news release or other announcement, written or oral, whether to the public or
press, to stockholders or otherwise, relating to this Agreement, to any
amendment hereto or to performance hereunder without the prior written consent
of the other, except as may be required, in the judgment of either parties
legal counsel, to comply with the requirements of any applicable law,
including, but not limited to, any disclosures required by state or federal
securities laws.


 


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IN WITNESS WHEREOF, the parties hereto have caused this Supply
Agreement to be duly executed and effective as of the date and year first
written above.


 


	
  “NuVasive”

  	
   

  	
  NuVasive, Inc.,

  
	
   

  	
   

  	
  A Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
     /s/ Alexis V. Lukianov

  
	
   

  	
   

  	
  Its: 

  	
     Chairman and CEO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  “BTC”

  	
   

  	
  Blood and Tissue Center of Central Texas,

  
	
   

  	
   

  	
  A Texas Non-profit Corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
     /s/ Arlin Hall

  
	
   

  	
   

  	
  Its:

  	
     CFO

  



 


15





















 


CONFIDENTIAL TREATMENT REQUESTED


 


Exhibit A


 


Products


 


 


*** Block


 


Manufacturing Price $ *** per unit *


 


 










* Price to be evaluated and adjusted
as necessary  each year at least thirty
(30) days before the anniversary of this Agreement, and in the event that the
processing or distribution specifications are modified.


 


*** Terms have been omitted pursuant to a request for
confidential treatment filed separately with the Securities and Exchange
Commission.


 


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