Exhibit 10.1**TISSUE RECOVERY AGREEMENT BETWEEN****OSTEOTECH, INC.****AND****COMMUNITY BLOOD CENTER d/b/a COMMUNITY TISSUE SERVICES**
 

 
**AGREEMENT**     This Agreement is made as of March 1, 2006 by Community Blood Center d/b/a Community TissueServices, a nonprofit corporation organized under the laws of the state of Ohio (“CTS”), andOsteotech, Inc. (“Osteotech”), a Delaware corporation as follows:     **WHEREAS,**Osteotech provides high-quality tissue processing services (“Processing” or“Process(es)”) and other related services to entities engaged in recovering human bone and relatedconnective soft tissue for transplantation (collectively, “Bone Tissue”); and     **WHEREAS,**Osteotech is engaged in the distribution of Bone Tissue which it Processes tohospitals, surgeons and other end-users (collectively, “End-Users”); and     **WHEREAS,**CTS currently recovers Bone Tissue and other human cadaveric tissue (such tissuetogether with Bone Tissue being called “Tissue”); and     **WHEREAS,**CTS desires to provide certain of the Bone Tissue it receives to Osteotech forprocessing and distribution; and     **WHEREAS,**Osteotech desires to process and distribute the Bone Tissue provided to it by CTS.     **NOW, THEREFORE,**the parties agree as follows:**1.** **DELIVERY AND PROCESSING OF BONE TISSUE****.**          1.1 CTS Commitment to Deliver Bone Tissue to Osteotech.          1.1.1. Osteotech Engagement of CTS.               (a) Osteotech hereby engages CTS to provide to Osteotech, and CTS agrees to provide toOsteotech, the following type of Bone Tissue: cortical shafts * * * * * *, as more fully specified on Exhibit B hereto (the“Specifications”) which are recovered by, on behalf or under the supervision of CTS (the “CTSRecovered Tissue”). The CTS Recovered Tissue provided by CTS toOsteotech shall be * * * * * * by CTS in accordance with the Recovery Standards,provided that in no event will the CTS Recovered Tissue provided toOsteotech be * * * * * * * * * * * *. Osteotech shall be entitled to reject CTS RecoveredTissue in the event CTS does not comply with the Recovery Standards (as hereinafter defined).Eligibility for transplant shall be the responsibility of CTS’ Medical Director. CTS shall not berequired to provide Osteotech with a full chart regarding eligibility for transplant.               (b) Osteotechshall have * * * days to reject CTS Recovered Tissue. Osteotech shall havethe right to reject CTS Recovered Tissue in the event CTS fails to perform the processes set forthin subsection (a) and/or in the event of damage during shipping, or failing to meet thespecifications stated on Exhibit B. In the event of rejection, no Tissue
1

 
Recovery Fee shall be payable by Osteotech to CTS and Osteotech shall return such rejected BoneTissue to CTS.               (c) CTS shall provide tissue to Osteotech in accordance with this subsection, provided thattissue is available after the needs of all of the local communities served by CTS have been fullymet and after all of CTS’ other contractual commitments for the provision of tissue have beenfulfilled. CTS shall provide * * * units of donor Bone Tissue per calendar month. Fromtime-to-time, either party may provide non-binding forecasts to assist the parties in theirrespective business planning, but any such forecasts shall not be binding until the issuance of awritten purchase order by Osteotech and written acceptance of such purchase order by CTS.          1.1.2. Costs of Recovery and Delivery; Services to be Provided by CTS.     Osteotech will reimburseCTS in accordance with the fee schedule set forth in **ExhibitC** for its costs of (i) recovering CTS Recovered Tissue and (ii) performing the additionalservices set forth in **Exhibit C** (the “Tissue Reimbursement Fees”). CTS shall have the right* * * * * * * * * * * *.Notwithstanding the foregoing, in the event of an extraordinary event (e.g. changes in laws,regulations, etc.) which substantially increase CTS’ costs, and such costs are documented toOsteotech’s satisfaction, the parties will negotiate in good faith new prices, which such new pricewould be effective for any future Bone Tissue deliveries, and failing agreement on such pricechanges either party may terminate this Agreement. Osteotech shall pay all invoices for tissuereceived by it from CTS within not more than * * * days of the date on each invoice. CTSshall have the right to impose a charge of * * * % per month on the unpaid balance of any past dueamount owed by Osteotech and the right to refuse to respond to future orders issued by Osteotechuntil all such past due amounts have been paid in full.               (a) Compliance with Recovery Standards. All CTS Recovered Tissue delivered toOsteotech for Processing and distribution hereunder shall conform to all standards, guidelines,rules, regulations and laws applicable to the donation, recovery, and eligibility of Tissue (the“Recovery Standards”). Without limiting the generality of the foregoing, CTS will (i) audit allTissue recovery sites and ensure that they comply with AATB standards, and (ii) audit laboratorytest sites for compliance with all Recovery Standards. CTS will provide to Osteotech external auditreports which result in unfavorable results. Except as set forth in Section 1.1.1 (a), the RecoveryStandards shall include applicable standards and requirements relating to donor referral, informedconsent, tissue recovery, pre-processing storage, packaging and shipping of pre-processed Tissueand all records, activities and standards related to obtaining, testing, documenting and evaluatingserological test results and microbiological testing results; obtaining, documenting and evaluatingmedical history and lifestyle data; and related organizational, management and quality assuranceactivities as may be contained in: (i) applicable laws, regulations, and guidelines of the UnitedStates Food and Drug Administration (“FDA”); (ii) applicable standards and guidelines promulgatedby the American Association of Tissue Banks (“AATB”); (iii) applicable laws and regulations ofother U.S. federal, state and local government agencies with jurisdiction over the recovery anddistribution of human musculoskeletal tissue; (iv) applicable laws and regulations where such CTSRecovered Tissue
2

 
delivered to Osteotech hereunder is recovered by, or on behalf or under the supervision of, CTS;(v) CTS’s standard operating procedures (“SOPs”), as they may be amended from time to time by CTS;and (vi) Osteotech’s standards for recovered Tissue, as defined in Exhibit A, to the extentapplicable to CTS Recovered Tissue, as specified in Osteotech’s SOPs, as such standards may beamended from time to time by Osteotech and as provided to CTS in advance of their effectiveness. Ifinterpretation of the Recovery Standards is required or if there is a disagreement about theinterpretation of the Recovery Standards, CTS and Osteotech will attempt to negotiate a resolutionin good faith in accordance with Section 20.               (b) Standard Operating Procedures. CTS and Osteotech shall each make available to theother party for such other party’s review a copy of its current SOPs relating to Tissue recoveryupon reasonable prior notice of a request to review such SOPs made by such other party.Notwithstanding anything else in this Agreement to the contrary, Osteotech will review CTS’ SOPsand inform CTS if the SOPs are deficient.               (c) Audit Rights. Upon reasonable prior notice to CTS, and at its own expense,Osteotech shall have the right to conduct audits of CTS’s facilities and records to ensure CTS’scompliance with the terms of this Agreement, as well as with all applicable laws, regulations andstandards enumerated in Section 1.1.2(a) and (b) above. CTS will consider all reasonable actionsnecessary to correct any deficiencies identified in any of such audits. If CTS decides not toimplement any recommended actions, Osteotech’s sole remedy shall be termination of this Agreement               (d) Certificate of Donor Eligibility. CTS shall provide Osteotech with a copy of theserological test results, pre-processing culture results, donor consent, process quality checklist,and a Certificate of Donor Eligibility (but not a full chart) with each donor of Bone Tissue thatis delivered to Osteotech. Such Certificate of Donor Eligibility, in a form acceptable to both CTSand Osteotech, shall be signed by CTS’ Medical Director. Osteotech shall review the eligibility ofeach such donor for release to processing by Osteotech, utilizing the serological test results andthe Certificate of Donor Eligibility provided by CTS. After such review, Osteotech will have * * * days from receipt to reject Bone Tissue for Processing by written notice to CTS.          1.2 Processing Responsibilities and Distribution Rights of Osteotech.          1.2.1. General Undertaking. Processing and packaging of CTS Recovered Tissue receivedand accepted by Osteotech pursuant to this Agreement into then currently available finished unitsof Bone Tissue shall be conducted by Osteotech. Osteotech hereby agrees and acknowledges that theBone Tissue provided by CTS will require further * * * * * * * * * ** *.               (a) Osteotech shall promote and distribute all finished Tissue forms processed from BoneTissue delivered to Osteotech by CTS hereunder to End-Users as
3

 
determined solely by Osteotech. Osteotech shall distribute such Bone Tissue and related productsand shall be entitled to charge End-Users fees for Osteotech’s Bone Tissue Processing, distributionand education services as determined by Osteotech in accordance with all applicable laws andregulations.               (b) Osteotech shall be entitled to use Bone Tissue provided to it by CTS for research anddevelopment purposes if the informed consent signed at the time such Bone Tissue was recoveredallows such Bone Tissue to be used for medical research and development purposes.               (c) Osteotech represents and warrants that it will comply with all (i) applicable laws,regulations, and guidelines of the FDA; (ii) applicable standards and guidelines promulgated by theAATB; (iii) applicable laws and regulations of other U.S. federal, state and local governmentagencies with jurisdiction over the recovery and distribution of human musculoskeletal tissue; (iv)CTS’s SOPs, as they may be amended from time to time by CTS; (v) Osteotech’s standards forrecovered Tissue, to the extent applicable to CTS Recovered Tissue, as specified in Osteotech’sSOPs, as such standards may be amended from time to time by Osteotech and as provided to CTS inadvance of their effectiveness; and (v) CTS Processing standards.**2.** **STORAGE, SHIPPING, REGULATORY COMPLIANCE AND LABELING****.**          2.1 Possession and Storage of Tissue.               (a) CTS Recovered Tissue delivered by CTS to Osteotech for Processing and any finished unitsor other byproducts derived from such Bone Tissue shall be held by Osteotech in the public trust atall times until distributed by Osteotech. Neither CTS nor Osteotech shall have any ownership orother property right in any such Bone Tissue, finished units or other by-products and shall notallow any third party to obtain any such right (whether in the nature of a lien, security interest,encumbrance, or otherwise). Neither CTS nor Osteotech shall sell, trade, or otherwise dispose of orimply that it is selling, trading or otherwise disposing of, banked human tissue, provided,that this shall not prohibit Osteotech from (i) distributing Processed or unprocessed Bone Tissueor marketing its Processing techniques and other services; (ii) utilizing Bone Tissue for medicalresearch and development purposes; and (iii) properly disposing of Bone Tissue that does not meetquality assurance standards or regulatory requirements, in compliance with applicable law.               (b) Specifications for all Bone Tissue products to be Processed by Osteotech from CTSRecovered Tissue will be developed by Osteotech.               (c) ***** will providestorage for all Bone Tissue donors recovered forOsteotech *****.               (d) *** shall pay all shipping costs associated with delivery by CTS to Osteotech. ***shall pay all shipping costs associated with Bone Tissue rejected in accordance with Section1.1.1(b).
4

 
          2.2 Certain Joint Compliance Responsibilities.               (a) CTS shall comply with applicable laws, regulations and guidelines as required underSection 1. Osteotech shall comply with applicable laws regulations and guidelines as required underSection 1. In instances where the parties’ compliance responsibilities overlap, or where otherwisenecessary and appropriate, each party shall use commercially reasonable efforts to cooperate withand assist the other party in such other party’s regulatory compliance activities.               (b) If either party becomes aware of anything which affects the eligibility assessment of adonor, compliance with Recovery Standards, or problems with Processing, it shall promptly notifythe other party thereof in writing.               (c) The Tissue from Bone Tissue delivered by CTS, shall conform to the Recovery Standards. CTSand Osteotech shall provide each other a copy of its SOPs and copies of any material amendments toits SOPs promptly after such amendments are adopted; provided, however, that doing so will notrequire such party to disclose any trade secrets, technical know how or unpublished scientific dataor technical art. If interpretation of the Standards is required or if there is a disagreementabout the interpretation of the Standards, CTS and Osteotech will attempt to negotiate a resolutionin good faith in accordance with Section 20. In the event the FDA, any other applicable regulatoryagency or the AATB, implements new or additional regulations applicable to Tissue, Osteotech andCTS shall each implement such changes to its SOPs as are necessary to comply with such regulations.In the event that either party has failed to or is unable to implement such changes in respect ofTissue by the effective date of such changes, the other party shall have the remedy set forth inSection 7.          2.3 Regulatory Issues               (a) Osteotech will handle all complaints with respect to any Tissue distributed to End-Usershereunder. Any issues arising under such complaints relevant to initial processing or eligibilitywill be forwarded to CTS for response, with both parties cooperating to resolve any such complaintsin a timely manner.               (b) Osteotech will address all recalls, deviations, adverse reactions, and the like, with thecosts of recall or any corrective action to be borne by the party responsible for the error orfailure causing such recall.               (c) Osteotech will address all regulatory requirements regarding processed Bone Tissue, withCTS providing any assistance or information necessary for Osteotech to do so effectively and in atimely manner.               (d) CTS will promptly provide Osteotech with a list of all testing laboratories used forserological and microbiological testing, copies of applicable tissue bank registrations andcertifications, and a list of any tissue recovery organizations utilized by it other than CTSitself or its staff, and notify Osteotech promptly of any changes thereto.
5

 
          2.4 Labeling.               (a) Individual packages of finished units of CTS Recovered Tissue Processed by Osteotech willbear a standard Osteotech bone product label that contains the product name and identity code,donor number and expiration date, and to the extent required by applicable laws or regulations, astatement that such Bone Tissue was recovered by CTS. The label shall also indicate that such BoneTissue was Processed and distributed by Osteotech.          2.5 Indemnification.               (a) Osteotech agrees to defend, hold harmless, and indemnify CTS against any damages,litigation costs (including, without limitation, reasonable attorney’s fees and costs), losses,obligations, liabilities, claims, actions or causes of action sustained or suffered by CTS arisingfrom: (i) a breach of Osteotech’s obligations hereunder; or (ii) a defect in any finished unit ofCTS Recovered Tissue processed by Osteotech under this Agreement to the extent such defect resultsfrom an error or omission by Osteotech (including any employee or agent of Osteotech or otherperson to whom Osteotech has delegated any Processing or Processing related activities hereunder),or from a failure of workmanship by Osteotech.               (b) CTS agrees to defend, hold harmless, and indemnify Osteotech against any damages,litigation costs (including, without limitation, reasonable attorney’s fees and costs), losses,obligations, liabilities, claims, actions or causes of action sustained or suffered by Osteotecharising from (i) a breach of CTS’s obligations hereunder; (ii) a defect in any finished unit of CTSRecovered Tissue processed by Osteotech under this Agreement to the extent such defect results froman error or omission by CTS (including any employee or agent of CTS or other person to whom CTS hasdelegated any Bone Tissue recovery or Bone Tissue recovery related activities hereunder), inconnection with CTS’s Bone Tissue recovery activities, including without limitation any testingperformed by or at the direction of CTS; or (iii) any donor eligibility determination made by CTS(including any employee or agent of CTS or other person to whom CTS has delegated any donoreligibility determination responsibility).               (c) For purposes of subsection (a) above, Osteotech shall be the “indemnifying party” and CTSshall be the “indemnified party” and for the purposes of subsection (b) above, CTS shall be the“indemnifying party” and Osteotech shall be the “indemnified party.” The obligations andliabilities of the indemnifying party hereunder with respect to claims resulting from the assertionof liability by third parties shall be subject to the following terms and conditions:               (i) The indemnified party shall give written notice to the indemnifying party of anyassertion of liability by a third party which might give rise to a claim by the indemnifiedparty against the indemnifying party based on the indemnity contained in Section 2.5(a)hereof, or Section 2.5(b) hereof, as the case may be, stating the nature and basis of saidassertion and the amount thereof, to the extent known, within five (5) business days after anofficer of the indemnified party learns of the claim or receives notice thereof. Failure togive such notice within five (5) business days may, at the indemnifying party’s option, resultin a reduction in any subsequent
6

 
indemnification payment by an amount equivalent to the expenses and/or losses demonstrated tohave been caused by such delay in notification.               (ii) In the event any action, suit or proceeding is brought against the indemnifiedparty, with respect to which the indemnifying party may have liability under the indemnityagreement contained in Section 2.5(a) or Section 2.5(b) hereof, as the case may be, theaction, suit or proceeding shall, upon the written agreement of the indemnifying party that itis obligated to indemnify under the indemnity agreement contained in Section 2.5(a) or Section2.5(b) hereof, as the case may be, be defended (including all proceedings on appeal or forreview which counsel for the defendant shall deem appropriate) by the indemnifying party. Theindemnified party shall have the right to be represented by advisory counsel and accountants,at its own expense, and shall be kept fully informed of such action, suit or proceeding at allstages thereof, whether or not it is so represented. The indemnifying party shall makeavailable to the indemnified party and its attorneys and accountants all books and records ofthe indemnifying party relating to such proceedings or litigation. The parties will render toeach other such assistance as they may reasonably require in order to ensure the proper andadequate defense of any such action, suit or proceeding.               (iii) The indemnifying party shall not make any settlement of any claims without thewritten consent of the indemnified party, which consent shall not be unreasonably withheld ordelayed.               (iv) The indemnified party shall not make any settlement of any claims without thewritten consent of the indemnifying party.               (d) The provisions of this Section 2.5 shall survive termination of this Agreement.**3.** **RECORDS AND REPORTS.**               (a) CTS will obtain and maintain complete and accurate records as required of CTS by theRecovery Standards (including without limitation donor medical and behavioral history, donor lifestyle information, and, if applicable, serology and microbiological testing). CTS will retain suchrecords for the time periods required by the Recovery Standards. Such records shall be available toOsteotech, only to the extent required by the Recovery Standards, during normal business hours uponreasonable advance notice at Osteotech’s expense.               (b) Each of Osteotech and CTS shall maintain an SOP which will set forth procedures pursuantto which it will provide information to regulatory authorities as may be required by applicablelaws and regulations. Such SOP will specify the contact person at each of Osteotech and CTS whowill be responsible for providing such information and interacting with such regulatoryauthorities.               (c) Osteotech shall maintain complete and accurate records concerning CTS Recovered Tissuereceived by Osteotech, Processed and in storage at Osteotech and finished units of CTS RecoveredTissue stored and distributed by Osteotech. Osteotech shall retain such records for the timeperiods required by the Recovery Standards. Such records shall
7

 
be available to CTS, only to the extent required by the Recovery Standards, during normal businesshours upon reasonable advance notice at CTS’s expense.               (d) Osteotech shall ensure that all information pertaining to CTS will be disclosed only tothose Osteotech personnel with a need-to-know who have signed Osteotech’s standard confidentialityagreement.               (e) Osteotech shall notify CTS prior to the release of any CTS donor identifying information,such as the donor identifying number, where such release is legally required by a regulatory orgovernmental agency or court or administrative order or subpoena. The provisions of this Section3(e) shall survive termination of this Agreement.**4.** **Section intentionally left blank.****5.****CONFIDENTIALITY AND CERTAIN OTHER COVENANTS.**          5.1 Non-Disclosure of Confidential Information.               (a) For purposes of this Agreement, “Confidential Information” means all general and specificknowledge, experience and information that is confidential and of value to CTS or to Osteotech,including without limitation, formulations, designs, products, processes, supplies, methods ofmanufacture or processing, SOPs, cost data, master files, the nature of research and/or developmentprojects, as well as data relating thereto, marketing or business plans, donor data and financialdata. It shall also mean any information disclosed to either party by any third party which eitherCTS or Osteotech is obligated to treat as confidential or proprietary.               (b) Both parties agree that neither party will, at any time, without the express writtenagreement of the other party, or except as expressly permitted by this Agreement, disclose to anyother person or use any Confidential Information of the other party, except for the purposes ofperforming this Agreement or any successor Agreement or as may be required by law, governmentalregulation or court order. Information shall not be considered to be Confidential Information of aparty if it can be established that (i) such information was in the possession of the other partyprior to disclosure to such other party by the party claiming that it is Confidential Informationand such information is not otherwise subject to a confidentiality agreement, (ii) such informationis then part of the public domain and became so without the breach of this or any otherconfidentiality agreement by such other party or any of its affiliates, or (iii) such informationis developed independently by such other party or becomes known to or acquired by such other partyby means other than as a result of a breach of a confidentiality agreement or any fiduciaryobligation.               (c) CTS and Osteotech will hold in confidence, and each agree to take commercially reasonablesteps to cause its employees, consultants or others granted access to such Confidential Informationto hold in confidence, all information identified as Confidential Information consistent with theobligations of CTS and Osteotech under this section 5.1.               (d) CTS and Osteotech each recognize that violation in any material respect of any provisionof this Section 5.1 may cause irreparable injuries to Osteotech or CTS
8

 
and agree that CTS or Osteotech shall be entitled to preliminary and final injunctive reliefagainst such violation. Such injunctive relief shall be in addition to, and in no way in limitationof, any and all remedies or rights which CTS or Osteotech shall have at law or in equity for theenforcement of the provisions of this Section 5.1. In addition, CTS and Osteotech agree that theparty responsible for the breach of confidentiality shall be responsible for all legal fees andother costs and expenses incurred in the successful enforcement of the non-breaching party’s rightsand remedies under this Section 5.1. The provision of this Section 5.1 shall survive thetermination of this Agreement in accordance with its terms.          5.2 Certain Representations and Warranties..               (a) Each of Osteotech and CTS represents and warrants to the other that (i) its execution ofthis Agreement and the performance of its obligations hereunder will not conflict with or result inthe breach of or default under any other agreement to which it is subject or by which it is bound,(ii) it will, in the performance of its obligations hereunder, comply with all applicable laws,rules and regulations, (iii) its performance of its obligations hereunder will not violate orinfringe the intellectual property rights of any third party, and (iv) it has all the rights andlicenses necessary to perform its obligations hereunder without violating or infringing suchrights.          5.3 AATB Accreditation. CTS and Osteotech will maintain (a) AATB accreditation astissue banks and (b) FDA tissue bank registration.**6.** **TERM OF AGREEMENT****.**     This Agreement shall become effective as of the date first above written and continue for aperiod of five (5) years; unless terminated earlier in accordance with the provisions hereof. ThisAgreement shall renew for successive two (2) year renewal terms, unless either party shall havenotified the other party in writing of its intention not renew the Agreement no later than onehundred and eighty (180) days prior to the end of the initial term or any renewal term.**7.** **TERMINATION****.**     Either party may terminate this Agreement at any time upon:               (a) The material breach by the other party of any of its obligations under this Agreement, ifsuch breach shall not be cured within thirty (30) days after written notice thereof is given by thenon-breaching party to the breaching party; or               (b) An adjudication of the other party as bankrupt or insolvent; or the admission in writingby such other party of its inability to pay its debts as they mature; or an assignment by suchother party for the benefit of its creditors; or such other party applying for or consenting to theappointment of a receiver, trustee or similar officer for its assets; or the appointment of areceiver, trustee or similar officer for such other party’s assets without the application orconsent of such other party, if such appointment shall continue undischarged for a period of ninety(90) days; or such other party instituting (by petition, application, answer, consent or otherwise)any bankruptcy, insolvency arrangement or similar proceeding relating to it under the laws of anyjurisdiction; or the institution of any bankruptcy, insolvency arrangement
9

 
or similar proceeding relating to such other party, if such proceeding shall remainundismissed for a period of ninety (90) days; or the issuance or levy of any judgment, writ,warrant of attachment or execution or similar process against a substantial part of the property orassets of such other party, if such judgment, writ, warrant of attachment or execution or similarprocess shall not be released, vacated or fully bonded within ninety (90) days after its issue orlevy.               (c) CTS may terminate this Agreement at any time upon one hundred eighty (180) days priorwritten notice to Osteotech if CTS makes a determination to end its program of recovering BoneTissue; provided that if CTS resumes such program at any time during the original term of thisAgreement, either under the name of CTS or any other name, it shall provide prompt written noticeof such resumption to Osteotech and this Agreement shall become effective again in accordance withits terms as soon as is practicable, but in no event later than ninety (90) days after such noticeis received by Osteotech. It is understood and agreed that CTS’s sale, assignment or other transferof its Bone Tissue recovery operations or its assets shall not provide CTS or its successor to suchoperations or assets with the right to terminate this Agreement under this Section 7. or otherwise.In the event of any such assignment sale or transfer by CTS of its Bone Tissue recovery operationsor its assets, CTS must assign this Agreement to such successor and such successor shall berequired to comply with all of CTS’s obligations hereunder. Osteotech shall have the right toapprove any such assignment and assumption.               (d) Either Party may terminate this Agreement at any time upon 30 days’ prior written noticeto Osteotech if the FDA or any applicable regulatory agency has made the determination (after anygood faith appeal of such determination by Osteotech) described in Section 2.2(c) to the extentsuch provisions are applicable to Osteotech. Osteotech may terminate this Agreement at any timeupon 30 days’ prior written notice to CTS if the FDA or any applicable regulatory agency has madethe determination (after any good faith appeal of such determination by CTS) described in Section2.2(c) to the extent such provisions are applicable to CTS.               (e) In the event that Osteotech is directly or indirectly acquired or directly or indirectlybecomes controlled by the Musculoskeletal Transplant Foundation Inc. (MTF) or Biocon Inc. (whetherby asset purchase, equity purchase, merger, consolidation or otherwise) during the term of thisAgreement, or during any renewal period, CTS shall have the immediate right to terminate thisAgreement.**8.****INSURANCE****.**               (a) Osteotechshall obtain and maintain in force during the term of this Agreement productliability insurance coverage, under a policy or policies with minimum limits of $*** and nomore than a $*** deductible, on a claims made or occurrence basis. Osteotech shall immediatelynotify CTS if coverage is cancelled. If a claims made policy is cancelled, Osteotech shall obtaintail/extended reporting period coverage equivalent to two (2) policy years and provide proof ofsuch coverage to CTS. Upon execution of this Agreement, Osteotech shall provide CTS with acertificate or certificates of insurance suitable to CTS which state(s) that the above requiredcoverage is in full force and effect and that the insurance carrier will provide not less thanthirty (30) days prior written notice of cancellation or material changes
10

 
to the policy or policies to both the insured party and the party to whom such certificate isissued. Maintenance of such insurance shall not relieve Osteotech of any liability under thisAgreement.               (b) CTS shall obtain and maintain in force during the term of this Agreement professionalliability insurance coverage, under a policy or policies with minimum limits of $*** and nomore than a $*** deductible, on a claims made or occurrence basis. CTS shall immediately notifyOsteotech if coverage is cancelled. If a claims made policy is cancelled, CTS shall obtaintail/extended reporting period coverage equivalent to two (2) policy years and provide proof ofsuch coverage to Osteotech. Upon execution of this Agreement, CTS shall provide Osteotech with acertificate or certificates of insurance suitable to Osteotech which state(s) that the aboverequired coverage is in full force and effect and that the insurance carrier will provide not lessthan thirty (30) days prior written notice of cancellation or material changes to the policy orpolicies to both the insured party and the party to whom such certificate is issued. Maintenance ofsuch insurance shall not relieve CTS of any liability under this Agreement.               (c) The parties acknowledge the difficulty in providing in this Agreement for all possiblefuture developments relating to the availability and cost of the required insurance policies.Should a party discover during the term of this Agreement that meeting the insurance requirementsof this Section 8, including but not limited to the minimum limits or maximum deductibles, is inits estimation commercially prohibitive, it shall give written notice to the other party. Keyexecutives from each party shall arrange to meet within 30 days of receipt of the notice todetermine if different insurance coverage is acceptable. The party not requesting a change ininsurance coverage shall have the right to give notice to terminate this Agreement immediately uponthe latter to occur of (i) the expiration of the aforementioned thirty (30) day period if thenotifying party had participated in negotiations in good faith and still the parties have failed tocome to a mutually agreeable resolution, and (ii) the date upon which the party receiving thenotice of termination actually fails to satisfy all of the applicable insurance requirements setforth in this Agreement.**9.****FORCE MAJEURE****.**     Neither party shall be responsible to the other for nonperformance or delayed performance ofthe terms and conditions hereof due to acts of God, acts of government, wars, riots, accidents andtransportation, fuel or material shortages, or other causes (except strikes), in the nature offorce majeure which is beyond its control.**10.****BINDING AGREEMENT; ASSIGNMENT****.**     Except as otherwise expressly herein provided, this Agreement may not be assigned in whole orin part without the prior written consent of the other party, provided that either party may assignits rights under the Agreement to any majority-owned subsidiary of such party without the consentof the other party, provided that such subsidiary agrees in writing to be bound by the terms andconditions of this Agreement. In any event Osteotech and CTS and their
11

 
respective subsidiaries shall be subject to and bound by the terms and conditions of this Agreementto the extent any of them are engaged in the recovery and distribution or Processing of Tissue, asthe case may be.**11.****NAME, EMBLEM, PACKAGING, TECHNOLOGY AND TRADEMARK****.**               (a) The respective trademarks, trade names and other source identifiers of the parties are setforth on Exhibit D hereto. Except to the extent Osteotech indicates in any literature, includingwithout limitation promotional materials, that CTS recovers Tissue Processed by Osteotech, that CTShas provided particular Tissue to Osteotech and that CTS has determined its medical eligibility,without the prior written consent of CTS, Osteotech shall have no right to use the trademark oremblem of CTS in connection with its Processing or distribution activities or to use the name ofCTS for commercial purposes; provided, however, Osteotech may disclose CTS’s name as may berequired by law, government regulation or court order.               (b) CTS shall not have the right to use any trademark or emblem of Osteotech, including thename Osteotech, without the prior written consent of Osteotech; provided, however, CTS may discloseOsteotech’s name as may be required by law, government regulation or court order.               (c) (i) Nothing in this Agreement shall be interpreted to convey to CTS any trademark, patentor proprietary technology owned by Osteotech;                    (ii) Nothing in this Agreement shall be interpreted to convey to Osteotech any trademark,patent, or proprietary technology owned by CTS.**12.****NOTICES****.**     All notices and other communications provided for hereunder shall be in writing and shall bemailed by certified mail, return receipt requested, telecopied, with a copy sent promptlythereafter by U.S. mail, or delivered by hand or overnight delivery, as follows.       If to CTS: Chief Executive Officer    Community Blood Center, Community    Tissue Services    349 South Main Street    Dayton, Ohio 45402-2715    Telephone No. (937) 461-3274    Telecopy No. (937) 913-5713       If to Osteotech: Chief Executive Officer    Osteotech, Inc.    51 James Way    Eatontown, New Jersey 07724    Telephone No. (732) 542-2800    Telecopy No. (732) 935-0626
12

 
or such other person or address as either party may designate by written notice to the otherparty complying as to delivery with the terms of this Section 12. All such notices and othercommunications shall be effective (i) if mailed by certified or registered mail, when received asindicated by the return receipt, (ii) if telecopied, when transmitted, as indicated by thefacsimile transmission report, provided same is on a business day in the U.S. (excludes weekendsand federal holidays) and, if not, on the next business day, or (iii) if delivered, upon delivery,provided same is on a business day and, if not, on the next business day.**13.****ENTIRE AGREEMENT****.**     This Agreement and the Exhibits thereto set forth the entire Agreement between the parties.Any prior agreements, promises, negotiations, or representations, either oral or written, relatingto the subject matter of this Agreement not expressly set forth in this Agreement are of no forceor effect. This Agreement may be executed in counterparts, both of which together shall constitutea single agreement.**14.****MODIFICATION****.**     This Agreement, or any part of section of it, may not be amended or modified except by thewritten consent of both parties to the Agreement.**15.****APPLICABLE LAW****.**     This Agreement shall be construed in accordance with the laws of the State of Ohio, withoutgiving effect to any conflict of laws principles.**16. WAIVER.**     Waiver or breach of any provision of this Agreement shall not be deemed a waiver of any otherbreach of the same or a different provision of this Agreement.**17.****INDEPENDENT CONTRACTOR****.**     CTS is providing its services hereunder as an independent contractor. Nothing herein shallcreate any affiliation, partnership or joint venture between the parties hereto, or anyemployer/employee relationship.**18.****SEVERABILITY****.**     The provisions of this Agreement shall be severable, and if a court of competent jurisdictionholds any provisions of this Agreement to be in violation of any applicable law, the remainingprovisions shall nevertheless remain in full force and effect.**19.****SUCCESSORS****.**     This Agreement shall be binding upon and inure to the benefit of the parties and theirpermitted successors and assigns.
13

 
**20.****DISPUTE RESOLUTION**     Osteotech will arrange with CTS to hold regular meetings to discuss issues that may ariseunder this Agreement. If a dispute arises between the parties under this Agreement, CTS andOsteotech will first attempt to negotiate a resolution in good faith within thirty (30) days ofnotice of such dispute. If the difference is not resolved by the parties, then any action broughtby either party hereto shall be brought only in the appropriate court in the State of Ohio.     **IN WITNESS WHEREOF,**the parties have caused this Agreement to be executed by their dulyauthorized officers as of the date first written above.      **COMMUNITY BLOOD CENTER**