exv10w46






Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisk denote omissions.




Exhibit 10.46




EXTRACORPOREAL DISPOSABLES DISTRIBUTION AGREEMENT





               This Agreement, dated as of June 15, 2009 (the “Effective Date”), is between Medisystems
Corporation, a Washington corporation with offices at 439 South Union Street, 5th Floor,
Lawrence, Massachusetts 10843 (together with its affiliates, “MDS”) and Gambro Renal Products,
Inc., a Colorado corporation with offices at 14143 Denver West Parkway, Lakewood, Colorado 80401
(together with its affiliates, “Gambro”). MDS and Gambro shall each be referred to herein as a
“Party” and collectively as the “Parties”.




               In consideration of the mutual promises made herein and other good and valuable consideration,
the receipt of which is hereby acknowledged, the Parties hereto agree as follows:



     1.0 BACKGROUND




          1.1 The following are examples of certain disposable medical devices useful in dialysis
therapies (collectively, the “Products”):




                    Non-cartridge blood tubing sets designed for use with Fresenius dialysis monitors (“BTL”).




          MDS designs and supplies certain Products under Specifications (as hereinafter defined)
including MDS labeling which MDS controls and currently has produced by subsidiaries or contract
manufacturers as set forth in Exhibit B (“MDS Products”). Gambro wishes to purchase certain MDS
Products for resale to DaVita (as defined below) and certain of its other dialysis customers in
certain countries of the world as listed in Exhibit A (the “Territory”).



     2.0 TERM OF AGREEMENT




          2.1 The term (including any extensions, the “Term”) of this Agreement shall be for a five (5)
year period beginning on the Effective Date of this Agreement. The Agreement shall terminate at the
end of the Term, unless the Parties agree on provisions for an extension of the Term not less than
six (6) months prior to the date on which this Agreement would otherwise terminate.



     3.0 MDS PRODUCTS




          3.1 The MDS Products that Gambro wishes to purchase pursuant to this Agreement are listed in
Exhibit B as “MDS BTL”, as such Exhibit B may be amended from time to time by mutual agreement of
the Parties. The codes of the MDS Products that are the subject of this Agreement are hereafter
referred to as “Codes”. The Codes shall meet specifications as set forth in Exhibit C, or as such
specifications, including labeling, may be modified from time to time pursuant to Sections 9.1, 9.2
and 9.3 (the “Specifications”), provided that such modifications are agreed upon in amendments to
Exhibit C signed pursuant to Section 18.2 hereof.




          3.2 MDS reserves the right, at its sole discretion, to incorporate clinical use enhancements
or developments in existing Codes of the MDS Products or to supply existing Codes from alternate
manufacturing sites or manufacturers even if MDS designates them with a different Code suffix,
provided that (i) no price increase is requested by MDS, (ii) the change does not alter the
Specifications (other than the Code suffix), and (iii) the change does not, in MDS’ reasonable
opinion, materially change the manufacturing process for the Codes or materially change the Codes.
If any of the preceding clauses are not satisfied, Gambro shall not be required to accept such
change, unless, in the reasonable opinion of Gambro, the change does not adversely affect the
Code’s conformance to the Code’s material performance characteristics.



     4.0 PURCHASES AND ORDERS




          4.1 Subject to the terms and conditions of this Agreement, MDS shall sell the Codes listed in
Exhibit B to Gambro and Gambro shall purchase the Codes listed in Exhibit B for use or resale by
Gambro only in the Territory.




          4.2 “Contract Year” shall mean for the first Contract Year, that period of time commencing on
the Effective Date of this Agreement and ending on December 31, 2009. Thereafter, each Contract
Year shall be from January 1 through December 31 of each calendar year during the Term of this
Agreement, except that the last Contract Year



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shall end on the termination or expiration date, if different than December 31.




          4.3 During the Exclusive Period (as defined below), Gambro hereby agrees to sell, directly or
indirectly (including without limitation to include sales through agents, representatives or
distributors) to DaVita Inc., DaVita affiliated entities, DaVita dialysis clinics, DaVita
management contract clinics, and clinics or entities jointly owned by DaVita or DaVita affiliates
(collectively, “DaVita”) BTL sourced only and exclusively from among MDS BTL listed in Exhibit B
(the “Exclusive Products”). During the Exclusive Period, MDS hereby agrees not to sell, directly
or indirectly (including without limitation to include sales through agents, representatives or
distributors) MDS BTL to DaVita; provided, however, that this obligation shall expire prior to the
expiration of the Term or earlier termination of this Agreement in the event DaVita (i) ceases to
have any material contractual ongoing purchase obligations with respect to BTL to Gambro which can
be satisfied through the purchase of MDS BTL from Gambro, or (ii) ceases to purchase at least [**]
percent ([**]%) of its BTL requirements (such requirements including, without limitation, all of
DaVita’s purchase, use, and/or inventory requirements for BTL (hereinafter, “BTL Requirements”))
from Gambro in the form of MDS BTL (as measured by Calendar Quarter, or at the reasonable request
of MDS, on a rolling [**] month basis),it being understood that Gambro shall not be deemed to be in
breach of this requirement, and MDS shall not have the right to immediately terminate this
Agreement, if such failure to satisfy such requirement is due to (i) DaVita’s purchases of MDS BTL
from MDS, Henry Schein or other third party MDS customers, (ii) MDS’ failure to deliver conforming
MDS BTL pursuant to accepted Gambro Delivery Orders, or (iii) a material increase in the percentage
of DaVita joint venture or managed clinics, to the extent such clinics are not obligated to
purchase at least [**]% of their BTL requirements from Gambro under any agreement with DaVita;
provided that during the Term Gambro shall not enter into any agreement or amendment with DaVita
which imposes a lower purchase requirement for DaVita with respect to BTL to be purchased from
Gambro in aggregate or with respect to any type of DaVita dialysis clinic or facility, or which
would impair in any way DaVita’s obligation to buy MDS BTL from Gambro hereunder. Notwithstanding
the foregoing, Gambro shall be deemed to be in breach of this requirement, and MDS shall have the
right to immediately terminate this Agreement, if in any [**] consecutive Calendar Quarters (or at
the reasonable request of MDS, [**] consecutive rolling [**] month periods) during the Exclusive
Period DaVita purchases less than [**] percent ([**]%) of its BTL Requirements from Gambro in the
form of MDS BTL, except if such failure occurs due to DaVita’s purchases of MDS BTL from MDS, Henry
Schein or other third party MDS customers, or due to MDS failure to deliver conforming MDS BTL
pursuant to accepted Gambro Delivery Orders. Gambro agrees that during the Exclusive Period, MDS
shall not be deemed to be in breach of its exclusivity obligations under this Section 4.3 with
respect to MDS BTL sold to DaVita, and that Gambro shall not have the right to immediately
terminate this Agreement, if (X) sales to DaVita of MDS BTL made by third party customers of MDS do
not in any given month exceed [**] percent ([**]%) of DaVita’s BTL Requirements (such sales to be
counted as sales by Gambro for purposes of determining compliance with the [**]% requirement set
forth herein), (Y) MDS agrees to use commercially reasonable efforts to stop such third party sales
promptly upon receiving notice thereof from Gambro, and (Z) MDS agrees to use commercially
reasonable efforts to ensure that, from and after the start of the Exclusive Period, MDS’
agreements with third party customers (including distributors) prohibit sales of MDS BTL to DaVita.
If such sales exceed [**] percent ([**]%) of DaVita’s BTL Requirements for [**] consecutive months
following the delivery of written notice thereof to MDS, Gambro shall have the right to terminate
this Agreement upon thirty (30) days notice. For purposes hereof, the “Exclusive Period” shall
mean the period of time commencing on [**] and continuing through the expiration of the Term,
except as provided herein (it being understood that MDS shall use commercially reasonable efforts
to have the Exclusive Period commence prior to [**]). In the event [**], Gambro agrees that the
Exclusive Period shall not commence until MDS is [**], it being understood that MDS shall endeavor
in good faith to ensure that the Excusive Period can commence on [**], and further that in any
event that the Exclusive Period shall start on or before [**]. Gambro further agrees
that the Exclusive Period shall not commence until Gambro has confirmed to MDS that (i) Gambro has
sufficient warehouse space and inventory of MDS BTL (consistent with the initial Delivery Orders
set forth Section 4.5 below) to support its obligations hereunder and (ii) DaVita shall purchase
MDS BTL from Gambro pursuant hereto (provided that in any event Gambro warrants that DaVita shall
commence purchasing at least [**] percent ([**]%) of its BTL Requirements from Gambro in the form
of MDS BTL on or before [**], it being understood that Gambro shall not be deemed to
be in breach of this requirement and that MDS shall not have the right to immediately terminate
this Agreement if the reason for DaVita’s failure to purchase [**]% of its BTL requirements from
Gambro in the form of MDS BTL is due to (i) DaVita’s purchases of MDS BTL from MDS, Henry Schein or
other third party MDS customers, or (ii) MDS failure to deliver conforming MDS BTL pursuant to
accepted Gambro Delivery Orders). MDS agrees that Gambro may commence non-exclusive sales of MDS
BTL to DaVita as soon as practical after receipt of the MDS BTL deliveries



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set forth in Section 4.5. Gambro understands and agrees that Henry Schein may continue to sell to
DaVita during the Exclusive Period any inventories it may have of MDS BTL supplied by MDS prior to
the start of the Exclusive Period pursuant to Henry Schein’s contract with DaVita; provided that
MDS agrees that it will not accept purchase orders for MDS BTL from Henry Schein for sale to
DaVita after [**]. Gambro and MDS shall endeavor in good faith to agree on the most suitable
transition to the Exclusive Period, including but not limited to providing Gambro the option,
subject to Henry Schein’s consent, to purchase any inventory in Henry Schein’s possession as of
[**]. Gambro represents that DaVita is obligated, during the Term of this Agreement, to purchase
at least [**] percent ([**]%) of its BTL requirements from Gambro, and that Gambro may satisfy this
requirement through the sale to DaVita of the MDS BTL to be sold hereunder. Gambro further
represents that it shall use all commercially reasonable efforts to ensure that DaVita satisfies
this obligation.




          4.4 This Agreement does not confer any additional distribution rights to Gambro. The Parties
agree to evaluate, in good faith, any opportunity to expand or modify the Territory as such
opportunities materialize, provided (i) that any exclusivity agreed by the Parties shall be deemed
irreversible for the remaining term of the Agreement, except as otherwise provided herein
(including, without limitation, as provided in Section 4.3 hereof), and (ii) that both MDS and
Gambro will have the right to suggest such expansion or modification. The Parties further agree to
undertake such evaluation in a manner which is not unreasonably conditioned or delayed.




          4.5 On or before the [**] day of each month (or if the [**] falls on a non-business day, the
day immediately thereafter which is a business day) during the Term of this Agreement (the “Order
Date”), Gambro will provide MDS with one or more non-cancellable delivery order(s) (a “Delivery
Order” or “Delivery Orders”) for the MDS Products. All Delivery Orders provided on or before the
[**] day of a month (or the next succeeding business day) shall be deemed to have the same Order
Date; any Delivery Order provided to MDS after the [**] day of the month (or the next succeeding
business day) shall be deemed to have an Order Date on the [**] day of the subsequent month (or the
next succeeding business day of that subsequent month). The requested delivery date (“Due Date”)
provided by Gambro on each Delivery Order having the same Order Date shall be not earlier than [**]
days after such Order Date. Unless MDS has otherwise notified Gambro within [**] business days of
receipt from Gambro, MDS shall be deemed to have accepted the Delivery Order, including Due Date.
Each Gambro Delivery Order for delivery to each DDP Location (as hereinafter defined) shall conform
to the per Code or per MDS Product quantity minimums and multiples stated in Exhibit B.
Notwithstanding the foregoing, within [**] business days of the Effective Date, Gambro shall place
Delivery Orders for [**] MDS BTL for delivery in [**], and [**] MDS BTL for delivery in [**] (such
Delivery Orders collectively hereinafter referred to as the “Initial Orders”), provided that, in
selling these volumes, Gambro will not be bound by the exclusivity obligations set forth in Section
4.3 above until the commencement of the Exclusive Period. MDS agrees that Gambro shall have no
obligation to place Delivery Orders, other than Initial Orders, pursuant to this Section 4.5 until
the commencement of the Exclusive Period. MDS agrees that the MDS BTL shipped to Gambro under the
Initial Orders shall have at least [**] months remaining shelf life at the time of delivery to
Gambro. MDS shall promptly notify Gambro in the event it anticipates any delay to the start of the
Exclusive Period beyond [**] due to anticipated ongoing sales of MDS BTL from Henry Schein to
DaVita, and shall discuss in good faith with Gambro alternatives for reducing Gambro’s carrying
costs associated with the Initial Orders, including, without limitation, delayed payment terms on
the Initial Orders or delayed delivery schedules on such orders.




          4.6 Any Delivery Orders with a common Due Date and DDP Location that cumulatively comprise
less than the number of pallets required to comprise full container loads or truck loads as
indicated in Exhibit B, shall be subject to freight cost premiums as quoted to Gambro by MDS at the
time the Delivery Order is accepted.




          4.7 During the period commencing [**] months after the commencement of the Exclusivity Period
through the expiration of the Term, and except as set forth in Section 4.8 below, MDS shall not be
required to accept any Gambro Delivery Orders with a common Order Date to the extent that the
aggregate quantity of Codes in any Code Group (as defined in Exhibit B) so ordered exceeds [**]
percent ([**]%) of the average monthly quantity ordered of that Code Group during the immediately
preceding [**] months, provided that MDS will make commercially reasonable efforts to accept such
excess. If accepted, such excess quantities shall, at MDS’ option, be deemed to have an Order Date
on the [**] day of the next subsequent calendar month and shall remain subject to the provisions of
this Section. In such event, however, such excess amount shall count towards the [**]% limit
applicable to such following Order Date; provided that MDS will make commercially reasonable
efforts to supply such excess. If MDS reallocates any Gambro Delivery Orders pursuant to this
Section 4.7, it shall consult with Gambro to



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determine which orders shall be reallocated to a future Order Date. During the period commencing
on the start date of the Exclusivity Period through [**] months after the commencement of the
Exclusivity Period, Gambro Delivery Orders with a common Order Date must be for a minimum of [**]
units (it being understood that MDS shall consider in good faith Gambro Delivery Orders below this
unit level during this [**] month period where such lower unit levels are due to DaVita’s inventory
levels of MDS BTL purchased from Henry Schein or DaVita’s ongoing purchases of MDS BTL directly
from MDS, out of Henry Schein inventories or out of the inventories of other third party MDS
customers) and no more than [**] units. During the period commencing on the Effective Date through
the start of the Exclusive Period, MDS shall not be required to accept any Gambro Delivery Orders
other than the Initial Orders; provided that MDS will make commercially reasonable efforts to
accept orders in excess of the Initial Orders.




          4.8 Notwithstanding the foregoing, during the final [**] months of this Agreement as
determined in accordance with Section 2.1 hereof, MDS have no obligation to accept Gambro Delivery
Orders to the extent that the aggregate quantity of Codes in any Code Group so ordered for delivery
in such final [**] month period exceeds the aggregate quantities ordered by Gambro during the
immediately preceding [**] months.




          4.9 By the [**] business day of each month during the Term of this Agreement, Gambro shall
provide MDS with a non-binding forecast of the quantity of each Code Gambro estimates it shall
place orders for during the following [**] months. These forecast figures will be e-mailed to the
General Manager, Medisystems.




          4.10 By the [**] business day of each [**], Gambro shall provide its ending inventory by Code
and warehouse and aggregate end user sales information by Code and warehouse for DaVita as well as
for all other customers in aggregate, in each case from the previous [**] to MDS.



     5.0 SHIPMENT OF MDS PRODUCTS




          5.1
MDS will ship the MDS Products, [**] to Gambro’s warehouses in
[**] (the “DDP Locations”) at
the prices listed in Exhibit D. Title for MDS Products shall pass to Gambro upon delivery at the
DDP Locations. MDS and Gambro may agree to add new DDP Locations in the Territory at any time
provided the incremental cost for delivery to such DDP Locations shall be added to the delivery
price by amendment to Exhibit D, signed pursuant to Section 18.2 hereof.




          5.2 MDS shall prepare and send by facsimile transmission or via e-mail to Gambro a packing
list for each shipment of MDS Products. This shipping information will include Gambro’s specific
purchase order number, item shipping quantities, and item back order information. When MDS has the
necessary systems and procedures in place, the packing slip will also accompany the shipment to
avoid loss of missing faxes and to reduce the chance of mismatching the paper to the shipment.




          5.3 MDS shall notify Gambro as soon as MDS becomes aware that any shipment may not be
delivered on or within the period prior to the Due Date and ending [**] days after the Due Date
applicable to a Delivery Order, such period being hereinafter referred to as the “Delivery Window”.
Except as set forth in Section 8.1, if MDS is delinquent with Delivery Orders properly placed by
Gambro and accepted by MDS in accordance with the terms of this Agreement, and as a result, to the
degree that Gambro has insufficient MDS Products to ship to its customer in its customary manner
and at customary prices, MDS will be responsible for incremental freight costs including all
priority and cross shipping charges associated with MDS delayed order fulfillment provided that the
proper documentation of such incremental charges is produced, with prior written authorization by
MDS, of which such authorization shall not be unreasonably conditioned, withheld or delayed.




          5.4 Gambro shall notify MDS in writing of any claim relating to: (i) any MDS Product that is
damaged or does not conform to the MDS Product Specifications at the time title to such MDS Product
is transferred to Gambro, or any MDS Product packaging that is damaged at the time title to such
MDS Product is transferred to Gambro, within [**] days of Gambro’s receipt of such shipment; or
(ii) any shortage in quantity of any shipment of MDS Product, within [**] days of Gambro’s receipt
of such shipment. In the event of rejection of such non-conforming or damaged MDS Product, any
such damaged MDS Product packaging, or shortage, MDS, unless it reasonably



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disputes Gambro’s claim,
shall, subject to Section 5.5 below, replace the MDS Product or make up the shortage
within [**] days of receiving such notice, provided that MDS has sufficient conforming MDS
Products in its inventory to do so, at no additional cost to Gambro, and shall make arrangements
with Gambro for the return or destruction of any rejected MDS Product, such return shipping charges
or costs of destruction to be paid by MDS. If sufficient conforming MDS Products are not
available, MDS shall use commercially reasonable efforts to replace the nonconforming MDS Products
with conforming MDS Products at no additional cost to Gambro as soon as possible, but in no event
shall the replacement time exceed [**] days. In addition to the foregoing, in order to minimize
the possibility of any inventory shortages resulting from the unavailability of sufficient
conforming MDS Product, MDS agrees that it will deliver conforming MDS Product as it becomes
available and will not wait until full replacement quantities are available. The provisions of
this Section 5.4 apply only to claims relating to MDS Products that have not yet been shipped to
customers. Returns of MDS Products that have been shipped to customers are governed by the
provisions set forth in Section 11.3.




          5.5 In the event of a conflict regarding any nonconforming MDS Product which Gambro and MDS
are unable to timely resolve, samples of the MDS Products shall be submitted by [**] to an
independent laboratory reasonably acceptable to both Parties for testing against the Product
Specifications and the test results obtained by such laboratory shall be final and binding upon the
Parties. The fees and expenses of such laboratory testing shall be borne entirely by the Party
against whom such laboratory’s findings are made. In the event the test results indicate that the
MDS Product in question does not conform to the Product Specifications, MDS shall replace such MDS
Product with conforming MDS Product at no additional cost to Gambro within [**] days after receipt
of such results, provided that MDS has sufficient conforming MDS Product in its inventory to do so.
If sufficient conforming MDS Product is not available, MDS shall use commercially reasonable
efforts to replace the nonconforming MDS Product with conforming MDS Product at no additional cost
to Gambro as soon as possible, but in no event shall the replacement time exceed [**] days. In
addition to the foregoing, in order to minimize the possibility of any inventory shortages
resulting from the unavailability of sufficient conforming MDS Product, MDS agrees that it will
deliver conforming MDS Product as it becomes available and will not wait until full replacement
quantities are available.




          5.6 Gambro accepts MDS’s standard packaging and palletizing methods as specified in Exhibit B.
MDS will examine proposals to modify the palletizing methods as requested by Gambro, and provided
these modifications are approved by MDS, Gambro agrees to pay any additional costs and to accept
responsibility for any damage related to the new packaging methods. MDS will use reasonable best
efforts to revisit its pallet size and work to conform to the Gambro rack height configurations.



     6.0 PRICES




          6.1 MDS will sell the Codes meeting the Specifications set forth in Exhibit C to Gambro, and
Gambro agrees to buy the Codes from MDS at the base prices and at DDP Locations listed in Exhibit D
(“Base Prices”). MDS makes no commitment to provide any Code at these Base Prices beyond [**], provided, that, any such increases shall be subject to verification by an
independent third party auditor selected and engaged by Gambro, and reasonably acceptable to MDS,
of the underlying cost increases. The Parties agree that any information provided to such
independent third party auditor shall be treated as strictly confidential by such auditor, and
shall not be disclosed to Gambro; such independent third party auditor only being authorized to
verify or not verify the requested price increase and the extent to which the underlying costs are
reasonably within MDS’ control. No information provided to any such independent third party auditor
may be copied, reproduced or removed from MDS’s premises.




          6.2 The quantity prices listed in Exhibit D are set forth on the basis of the total quantity
of Delivery Orders placed during each Contract Year for Codes. Prices include [**] DDP Gambro’s warehouse locations specified in Exhibit
D.



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          6.3 It is expressly agreed that Base Prices for the Codes include [**], (“Premiums”) will be
invoiced to Gambro.




          6.4 Gambro agrees to sell the MDS Products in accordance with the terms, covenants and
conditions contained in this Agreement. Notwithstanding the foregoing or anything contained in
this Agreement to the contrary, Gambro shall, in its sole and absolute discretion, determine the
resale prices for the MDS Products.



     7.0 PAYMENT




          7.1 The terms of payment for the MDS Products purchased by Gambro under this Agreement shall
be [**] days from MDS’s invoice date; provided that Gambro shall receive a [**] percent ([**]%)
discount from the invoiced amount in the event payment is received by MDS on or before [**] days
after the invoice date. Any amounts not paid within [**] days from the invoice date shall be
subject to a service charge until paid, in an amount equal to [**]% per month. Such service charge
shall be computed on the last working day of the calendar month, on a pro rata basis if applicable,
for invoices [**] days old or more. In addition, if full payment including service charge is not
received by MDS within [**] days from MDS’s invoice date MDS may restrict weekly sales to Gambro to
a dollar amount equal to the payments received from Gambro in the previous week. If full payment is
not received by MDS within [**] days of MDS’s invoice date Gambro shall be considered to be in
material breach of this Agreement and subject to Section 14.1. MDS may invoice Gambro upon email
notification to Gambro that Codes are available for carrier pickup at the DDP Locations listed in
Exhibit D.




          7.2 All Gambro payments are to be made by either wire transfer or ACH transfer and remitted to
the financial institution designated by MDS to receive such payments.



     8.0 ADDITIONAL OBLIGATIONS REGARDING DELAYED AND REPLACEMENT PRODUCTS




          8.1 MDS assumes no liability and shall not be liable to Gambro for any failure to fill or
delay in filling Delivery Orders received from Gambro and accepted by MDS to the extent such
failure or delay results from strikes, lockouts, or any other labor troubles, floods, fires,
accidents, import or shipping delays, delays in the delivery of raw materials, parts or completed
merchandise by the supplier thereof, or any cause beyond the reasonable control of or occurring
without the fault of MDS. In the event of any delay caused by any of the above, MDS shall use
commercially reasonable efforts to fulfill Gambro’s Delivery Orders in a timely fashion, provided,
however, that in the event of a shortage of available MDS Products, whether resulting from market
conditions, manufacturing constraints, FDA action against any company or otherwise, MDS will use
commercially reasonable best efforts to allocate in reasonable proportion to Gambro’s market share,
as compared to the total market size. MDS shall notify Gambro promptly if it anticipates any
potential delay in the filling of any of Gambro’s Delivery Orders caused by any of the above.




          8.2 Notwithstanding Section 4.3, Gambro may, at its option, be relieved of its commitment to
purchase the BTL listed in the Exclusive Products only from MDS and shall have the right to
purchase replacement Products from other suppliers or manufactured by Gambro, in whole or in part,
at Gambro’s option and at its own expense, should MDS, for the reasons specified in Section 8.1, be
unable to supply Delivery Orders and such inability continues for [**] days after the first
delivery date is missed; provided that Gambro, prior to exercising its option hereunder, must
provide MDS written notice of its intention to exercise its option hereunder, and provide MDS the
opportunity to cure such inability to supply within [**] days of receipt of Gambro’s notice
thereof. Gambro agrees to work in good faith with MDS to resolve any issues associated with any
inability to supply hereunder.




          8.3 Notwithstanding Section 4.3, Gambro may, at its option, be relieved of its obligations
with respect to any specific Delivery Order, in whole or in part, at Gambro’s option, should a
delay caused by an event described in Section 8.1 occur, if such delay is uncured within [**] days
after the Delivery Window of such Delivery Order. To the extent MDS is unable to deliver within
[**] days after the Delivery Window applicable to any Delivery Order MDS Products delayed by an
event described in Section 8.1, Gambro may purchase replacement Products from



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other suppliers or
manufactured by Gambro, in each case at its own expense, notwithstanding the obligations of
Section 4.3.




          8.4 Except as set forth in Sections 4.5, 4.7, 4.8 and 8.1, if MDS is unable to deliver MDS
Products during the Delivery Window applicable to an accepted Gambro Delivery Order, or MDS
replaces MDS Products pursuant to sections 11.3, 13.2 or 16.1, MDS will deliver or replace the MDS
Products as soon as possible, on an expedited basis (via air freight, exclusive use truck, overtime
customs clearance or similar means) at MDS’ expense if requested by Gambro.




          8.5 In addition to those rights set forth in Sections 5.4 and 8.4, and except as set forth in
Sections 4.5, 4.7, 4.8 and 8.1, to the extent MDS is unable to deliver MDS Products within [**]
days of the Delivery Window applicable to an accepted Gambro Delivery Order (the number of units of
MDS Products not delivered within [**] days of the Delivery Window applicable to an accepted Gambro
Delivery Order hereinafter referred to as the “Shortfall”), MDS shall promptly notify Gambro
thereof and, in MDS’ sole discretion, deliver to Gambro within [**] days of the Delivery Window
either (i) alternate MDS BTL in quantities equivalent to the Shortfall, or (ii) alternate Products
at effective pricing no greater than as listed on Exhibit D for the MDS BTL subject to the
Shortfall, provided such alternate Products are determined to be reasonably suitable alternatives
by Gambro or its customers (such alternate Products under this Section 8.5 (ii) hereinafter
referred to as “Substitute Product”) for purposes of addressing the Shortfall. If MDS does not
have sufficient quantities of alternate MDS BTL to deliver to address the Shortfall within such
[**] day window, or Gambro or its customers reasonably determines that no other alternate Product
offered by MDS is a suitable alternative to the MDS BTL sold hereunder, then Gambro may, at its
option, purchase replacement Products from other suppliers or manufactured by Gambro to the extent
necessary to meet its and its customers’ immediate needs, up to
the amount of the Shortfall, and [**] and in no event shall [**] hereunder. In the event MDS remains unable to deliver MDS Products or Substitute Products
in full satisfaction of accepted Gambro Delivery Orders placed over [**] consecutive months, either
Gambro or MDS may terminate this Agreement upon written notice to the other effective at the end of
such [**] month period. In addition to the foregoing, Gambro also reserves the right to cancel
outstanding accepted Gambro Delivery Orders if not delivered within [**] days of the Delivery
Window and MDS is not able to provide, within that [**]day period, assurances reasonably acceptable
to Gambro that MDS will be able to fulfill those outstanding orders.




          8.6
In addition to the rights and obligations set forth in
Section 8.5, MDS shall[**], and provided that Gambro will [**]; and provided further that MDS shall
have no obligation to[**] pursuant hereto over the Term of this
Agreement. MDS may [**]




          8.7 Gambro and MDS will make a cooperative effort to evaluate and implement supply chain
improvement opportunities, as mutually agreed upon.



     9.0 MDS PRODUCT CHANGES AND NEW MDS PRODUCTS




          9.1 During the Term of this Agreement, MDS shall offer to incorporate into the MDS BTL to be
sold by Gambro under this Agreement any MDS BTL clinical use enhancements or developments or new
MDS BTL that MDS designs, which enhancements, developments or products MDS controls, such
enhancements being subject to prior sale, exclusive license or exclusive contract.




          9.2 If Gambro agrees in writing to accept any such enhancement or development or new MDS BTL,
then the



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Parties shall meet in good faith to discuss any price adjustment made necessary or
possible by such enhancement or
development, provided (i) that such price adjustment for such improvement shall be no more than
proportionate to any price adjustment MDS is able to successfully negotiate with other key
customers, and (ii) that such price adjustment is not higher than the volume-based price adjustment
to any other MDS customer in the Territory. Pursuant to agreement between the Parties in writing on
any price adjustment for such enhancement or development, Exhibits B, C and D shall be amended to
incorporate such changes. Notwithstanding the above, MDS reserves the right to incorporate clinical
use enhancements or developments in MDS BTL as described herein, in accordance only with Section
9.3, provided that no price increase is requested by MDS.




          9.3 MDS shall notify Gambro in writing, using the “Vendor Notice of Change” form attached as
Exhibit E, at least [**] days prior to any substantial change in Specifications of the MDS
Products, components of the MDS Products or packaging which may necessitate in-servicing or
notification to end-users. Notwithstanding anything in this Agreement to the contrary, if MDS
provides such notice to Gambro, Gambro shall have the right to test such MDS Product, components or
packaging, including [**], to confirm that it would not result
in an adverse change in the clinical results and/or product quality/reliability of the MDS Product.
If Gambro, upon completion of such testing, notifies MDS in writing (which must occur no later
than [**] days following MDS’ Vendor Notice of Change) that, in Gambro’s reasonable judgment, an
adverse change would result, MDS shall notify Gambro in writing, within [**] days thereafter,
whether it will continue to supply the existing MDS Product to Gambro. If MDS notifies Gambro that
it will not, Gambro shall have the right to terminate this Agreement on one hundred and eighty
(180) days written notice; provided that, during such 180-day period, MDS shall, at Gambro’s
option, continue to supply the existing MDS Product to Gambro.



     10.0 REGULATORY RESPONSIBILITY; LABELING; ADVERTISING, PROMOTIONS AND TRADE NAMES




          10.1 MDS shall be responsible, at its expense, for complying with all applicable regulatory
requirements of the U.S. Food and Drug Administration (“FDA”) relating to the sale or use of the
MDS Products, including but not limited to obtaining authorization or clearance under Section
510(k) of the U.S. Federal Food, Drug, and Cosmetic Act, as amended (the “Act”). Failure of an MDS
Product to meet the applicable FDA requirements or to obtain FDA approval or clearance shall be
considered a material breach of this Agreement by MDS, except where such failure results from any
cause or event arising from the responsibility of Gambro under this Agreement or from a breach by
Gambro or one or more of its representations and warranties under this Agreement, or is otherwise
attributable to Gambro or its customers. In such event, Gambro shall have the right to (i)
terminate this Agreement under Section 14.1 (provided such breach is not cured within [**] days of
notice from Gambro thereof), (ii) terminate any specified Delivery Order(s) under Section 12.1
and/or (iii) if MDS is unable to deliver alternate MDS BTL or Substitute Products within [**] days
of receipt of notice of such failure from Gambro to replace those MDS Products which fail to meet
the applicable FDA requirements, or which fail to obtain FDA approval, purchase Products from
others or to manufacture such Products itself to replace those MDS Products which fail to meet the
applicable FDA requirements, or which fail to obtain FDA approval. In the event Gambro exercises
its rights under Section 10.1 (iii), MDS shall [**].  Notwithstanding the foregoing, if MDS’
inability to supply MDS Products complying with applicable regulatory requirements persists for
longer than [**] months and MDS is unable to provide Substitute Products, either Gambro or MDS may
terminate this Agreement effective at the end of such [**]
month period. [**] as a result of a failure or inability to
supply product complying with applicable regulatory requirements; provided that Gambro will [**] and provided further that MDS shall have
no obligation [**] in connection with
any Delivery Order not complying with applicable regulatory requirements  [**], in
aggregate, pursuant hereto over the Term of this



8









 






Agreement. [**], subject to applicable confidentiality
restrictions, and [**].




          10.2 Each use on the MDS Products of any MDS trade name owned or controlled by MDS (a “MDS
Trade Name”) shall inure to the benefit of MDS. Should any such use vest in Gambro any rights in
any MDS Trade Name, Gambro shall transfer such rights to MDS or its designee upon request of MDS.




          10.3 MDS represents and warrants to Gambro that MDS has the right to authorize and so
authorizes Gambro to use any MDS Trade Name that MDS requests be used on or with MDS Products sold
under this Agreement. MDS shall indemnify and hold Gambro harmless from any and all claims,
liability, damages, loss, cost, or expense (including reasonable attorneys’ fees and expenses)
arising out of, based on, or caused by any claim that the use by Gambro of an MDS Trade Name in a
manner approved by MDS infringes (or is alleged to infringe) upon any copyright, right to use,
trade name, trademark or other right of any person or entity.




          10.4 Except as provided in this Agreement, Gambro shall not use any MDS Trade Name, trademark,
logo, or any trade name, trademark or logo confusingly similar therewith in any MDS Product
advertisement or display. Notwithstanding the foregoing, MDS agrees to co-label MDS BTL sold by
Gambro hereunder with Gambro’s name and logo, if requested in writing by Gambro, so long as Gambro
orders of MDS BTL exceed [**] Units-of-Sale per month, and provided that, in the case of the first
order of co-labeled MDS Product, MDS shall have [**] days to comply with any co-labeling request by
Gambro, which shall comprise mutually approved camera-ready art. Gambro shall indemnify and hold
MDS harmless from any and all claims liability, damages, loss, cost or expense (including
reasonable attorney’s fees and expenses) arising out of, based on, or caused by any claim that the
use by MDS of a Gambro mark pursuant hereto in a manner approved by Gambro infringes (or is alleged
to infringe) upon any copyright, right to use, tradename, trademark or other right of any person or
entity.




          10.5 Packaging for each unit-of-sale comprises multiples of each Code, whether such Codes are
individually pouched or not, in cartons which are sealed, shippable and contain all such Codes’
labeling or references required by end-users (the “Unit-of-Sale”). Such Codes’ Units-of-Sale are
detailed in Exhibit B herein. Gambro acknowledges that it will store, ship, handle and sell the MDS
Products in their original, unopened Unit-of-Sale and in accordance with the labeling, and Gambro
will not remove, modify, repack, amend or relabel such Unit-of-Sale without prior, written approval
of MDS.




          10.6 Gambro hereby agrees that any written or oral statement, warning or representation made
by Gambro or its representatives in any advertising, publicity, promotion or sale regarding any of
the MDS Products shall be consistent with the labeling of the MDS Products.




          10.7 Gambro agrees to use its commercially reasonable best efforts to promptly notify MDS
whenever it becomes aware of the use of the MDS Products in a manner inconsistent with the labeling
or the indications for use.




          10.8 Gambro shall have the right to include the MDS Products as part of its marketing strategy
and value proposition for its hemodialysis products. Gambro agrees to obtain MDS’s written
authorization prior to the first publication or distribution of any advertising, displays or
promotional material regarding or referencing the MDS Products. To that end, Gambro shall provide
MDS with draft proofs of all marketing materials to be used in promoting the MDS Products. Unless
MDS has notified Gambro of its disapproval of such materials within [**] days of receipt from
Gambro, MDS shall be deemed to have consented to the use of such materials without any further
action required on the part of Gambro.




          10.9 During the Term of this Agreement, Gambro shall allow MDS to buy back MDS Product from
Gambro’s inventory, provided that, unless such buy back is intended to satisfy a regulatory
obligation (such as a recall or correction and removal), Gambro shall not be required to sell
inventory back to MDS if such sale could adversely affect Gambro’s ability to meet its customers’
requirements. Such product shall be used at MDS’ discretion for post market testing, product
quality audits, market acceptance studies, stock rotation, market withdrawal, or other purposes in
compliance with 21 CFR § 806, “Medical Devices; Reports of Corrections and Removals.” The
definition of market withdrawal, and the interpretation of stock rotation, shall be according to 21
CFR § 806.2(h). MDS shall issue a returned goods authorization to Gambro for such inventory of MDS
Products to be purchased by



9









 






MDS. MDS agrees to purchase such inventory of MDS Product from Gambro
at a cost equal to Gambro’s original
purchase price from MDS, plus any shipping or freight charges.




          10.10 Each Party shall promptly and, in any event, within [**] days of receipt of notice of
inquiry, inform the other in writing of any formal or informal inquiry relating to any MDS Product
by FDA or any regulatory agency of any state within the Territory.



     11.0 QUALITY CONTROL




          11.1 All MDS Products shall be subjected to a quality control inspection in accordance with
MDS’s quality control standards and the applicable FDA regulations. MDS shall manufacture, or
cause to manufacture, the MDS Products in accordance with (i) the applicable MDS Quality Systems
and GMP Requirements, (ii) all pertinent rules, requirements and regulations from FDA, as the same
may be amended from time to time, and (iii) the Product Specifications.




          11.2 The term “Lot” shall mean all MDS Products bearing the same lot number.




          11.3 If any customer of Gambro returns to Gambro MDS Products which are violative under the
Act or otherwise fail to perform as intended when used in accordance with the labeled indications
for use, such MDS Products may be returned to MDS, at MDS’ expense and option, provided that Gambro
requests such return within [**] days of Gambro’s receipt of the non-conforming MDS Products. Prior
to any MDS Product return, Gambro shall submit a written request to MDS to accept the MDS Product
return. Gambro’s request shall include, at a minimum, the reason for the return or the relevant
complaint reference, and the Code(s), quantities, and Lots of the MDS Products Gambro wishes to
return. MDS shall accept a return of any MDS Products that are returned by a customer to Gambro
where such customer alleges one of the reasons specified in the first sentence hereof. Within [**]
days of the receipt by MDS of a return, Gambro shall receive, at its option, a credit or refund for
such MDS Products returned to MDS, or by mutual agreement of Gambro and MDS, Gambro shall receive
replacements for such MDS Products returned to MDS; provided in each case that MDS reasonably
determines that such returned products fall within one of the reasons for return set forth in the
first sentence hereof. If MDS reasonably determines that such returned products do not fall within
one of such reasons, Gambro shall have the option to (i) either not contest the applicable
customer’s return or MDS’ determination, in which case the products wrongfully returned to MDS
shall be returned to Gambro, at Gambro’s expense, or (ii) contest the applicable customer’s return
or MDS’ determination, in which case MDS shall send samples of the returned MDS Product to an
independent third party, mutually acceptable to Gambro and MDS, to determine whether the returned
products fall within one of the reasons for return set forth in the first sentence hereof. The
determination of such third party shall be binding upon both parties. If the third party
determines that the MDS Product was not returned for one of the aforementioned reasons, the
products wrongfully returned to MDS shall be returned to Gambro at Gambro’s expense, and Gambro
shall pay such third party’s fees and expenses related thereto. If the third party determines that
the MDS Product was returned for one of the aforementioned reasons, [**].




          11.4 In the event that Gambro receives any complaint regarding the MDS Products, Gambro shall
notify MDS promptly using a complaint communication form which form shall be substantially in the
form of Exhibit F. MDS will be responsible for evaluating these complaints and promptly submitting
to Gambro a statement of its findings and corrective actions as appropriate. Nothing in this
section shall be deemed to relieve either party of its own reporting responsibilities under
applicable FDA regulations.




          11.5 MDS shall be responsible for issuing all written and oral communications with third
parties regarding any complaint about, alleged defect in, or recall of the MDS Products. Except as
required by law, Gambro will make no written or oral statements regarding any complaint about,
alleged defect in, or recall of the MDS Products without the prior written approval of MDS.




          11.6 During normal Gambro working hours, with prior written notice to Gambro, Gambro shall
allow MDS to enter Gambro’s facilities in which MDS’ Products are stored in order for MDS to
determine inventories by MDS lot



10









 






number, provided, that, unless such on-site visit is for
regulatory reasons, MDS may not conduct more than [**] in
any [**] period and no more than [**] in any Contract Year. In addition, MDS shall have regulatory
access to MDS Products in Gambro’s inventory in order for MDS to obtain MDS Product samples or
otherwise analyze MDS Products in Gambro inventory for MDS trending purposes. Gambro agrees to
assist MDS in such action. MDS agrees to reimburse Gambro for reasonable cost for Gambro’s labor
and handling resulting from Gambro’s assistance for such action. As a condition of provision to
MDS of access to Gambro’s facilities, personnel and/or documentation, all information obtained by
MDS as a result of such access shall be treated as Confidential Information of Gambro under this
Agreement and no such information may be copied, reproduced or removed from Gambro’s premises
without Gambro’s consent.




          11.7 Upon reasonable prior notice, MDS shall, from time to time during the Term of this
Agreement, but no more than [**] per Contract Year: allow an independent third party auditor
selected and engaged by Gambro and reasonably acceptable to MDS to (a) tour and inspect all
facilities utilized by MDS in manufacturing, finishing, testing, packaging, storing and shipping
MDS Products sold to Gambro under this Agreement, provided, however, that all such tours and
inspections shall be limited to a tour of the facilities and such other requirements as may be
agreed to by the Parties; (b) review MDS manufacturing quality control documentation; and (c) meet
with MDS quality and/or regulatory representatives. As a condition of provision to such an
independent third party auditor of access to MDS’s facilities, personnel and/or documentation, such
independent third party auditor shall agree to keep all information obtained as strictly
confidential and shall not disclose the same to Gambro, but shall only be able to indicate whether
MDS is compliant with MDS Quality System and GMP Requirements. No information provided to any such
independent third party auditor may be copied, reproduced or removed from MDS’s premises.




          11.8 MDS, at its expense, shall, where applicable, prepare Material Safety Data Sheets
(“MSDS”) and generate any other information and documentation related to product safety, including
but not limited to physical, chemical, and biological characteristics of each of the MDS Products
that Gambro requests as needed for addressing safety issues related to each MDS Product.




          11.9 Each Party will immediately (within [**] business days) notify the other Party in writing
of any event or complaint that gives rise or could give rise to the need to file a Medical Device
Report (an “MDR”) within the meaning of the Act, with respect to any MDS Product or the
manufacture, distribution or use thereof in accordance with the MDR regulation, 21 C.F.R. Part 803.
Each such written notice shall be Confidential Information under this Agreement. MDS shall have
sole responsibility and authority to file MDR’s relating to MDS Products sold hereunder.




          11.10 From time to time, for mutually agreed upon services and MDS Products in the Territory,
MDS may, at Gambro’s request, and as mutually agreed by the Parties, provide specialized training
to clinical and/or technical instructors designated by Gambro. Such training, to the extent deemed
relevant by MDS, shall consist of MDS’s standard courses for its MDS Products. Thereafter, Gambro
shall train its field representatives and its customers in the Territory through training sessions
or distribution of bulletins as appropriate. All incremental, out-of-pocket training course
related costs, except for the materials provided during the training courses, shall be paid by
Gambro, including, but not limited to, all travel and related out-of-pocket expenses.




          11.11 The training described in Section 11.10 shall be provided by MDS at a mutually agreeable
location in the Territory.




          11.12 In connection with the training provided by MDS as described in Section 11.10, MDS shall
furnish, at no cost to Gambro, all such training materials that are included in the course,
including, but not limited to, papers, procedures, books, and manuals, and all other training,
instruction, and presentation aids which MDS reasonably believes are necessary or appropriate (the
“Training Materials”). MDS agrees to promptly provide to Gambro, at no charge, a copy of
all additional, new and revised Training Materials which are in MDS’s possession or which MDS may
develop, for all mutually agreed upon services provided. Gambro shall also have access to MDS’s
customer support web site on which all recent up-date, download material and other key information
is published. Gambro shall be responsible for all the costs related to the training of its own
field service engineers and its customers in the field, including, but not limited to, the
reproduction of relevant training materials provided by MDS at the training sessions referred to in
Section 11.10. All equipment and training aids furnished by MDS for training purposes
shall



11









 






remain the property of MDS and will be returned to MDS upon termination of this Agreement,
ordinary wear and
tear excepted. MDS agrees that Gambro may freely reproduce any Training Materials, unless such
items are designated by MDS as Confidential Information, in which case such items may be reproduced
for Gambro’s internal use only. At MDS’s request and expense, Gambro shall return the foregoing
Training Materials to MDS.




          11.13 As soon as possible, but in any event within [**] days, after the Effective Date,
representatives from MDS’s and Gambro’s quality and regulatory organizations will meet to agree in
good faith upon quality assurance and regulatory policies and operating principles governing the
relationship hereunder.



     12.0 REPRESENTATION




          12.1 All MDS Products sold to Gambro under this Agreement are hereby represented by MDS, as of
the time the title to the MDS Products is transferred to Gambro, to be not adulterated or
misbranded within the meaning of the Act, and not articles which may not, under the provisions of
Section 510, 514, 515 or 516 of the Act, be introduced into interstate commerce. If MDS breaches
this representation with respect to any Lot, Gambro may immediately return to MDS, at MDS’s
expense, any MDS Products of such Lot received by Gambro. At Gambro’s option, MDS either will
immediately credit Gambro for such MDS Products, or repay to Gambro any moneys paid by Gambro for
such MDS Products. Without limiting Gambro’s rights under Sections 11.3 and 10.1, Gambro may
purchase Products at its own expense to replace any MDS Products which are in breach of this
representation from another supplier.



     13.0 WARRANTIES AND INDEMNIFICATIONS




          13.1 MDS warrants that MDS Products sold to Gambro under this Agreement are free from defects
in design, workmanship and materials and are merchantable and fit for their intended purposes.
EXCEPT AS SET FORTH IN THE PRECEDING SENTENCE, SECTION 12.1 AND IN THE LABELING FOR THE MDS
PRODUCT, MDS MAKES NO REPRESENTATION OR WARRANTY WHATSOEVER, WRITTEN OR ORAL, EXPRESS OR IMPLIED,
AS TO ANY OF THE MDS PRODUCTS, OR THEIR MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, AND
MDS HEREBY EXPRESSLY DISCLAIMS ANY SUCH REPRESENTATION AND WARRANTY. ALL OF THE WARRANTIES SET
FORTH IN THIS SECTION 13.1 OR IN SECTION 12.1 ARE VOID AND OF NO EFFECT IF THE MDS PRODUCTS ARE NOT
STORED AND USED IN ACCORDANCE WITH THE DIRECTIONS ON THE LABELING OR PRODUCT INSERTS ACCOMPANYING
THE MDS PRODUCTS.




          13.2 GAMBRO ACKNOWLEDGES AND AGREES THAT, EXCEPT FOR THE PROVISIONS OF SECTIONS 10.1, 11.3,
13.3, 13.4 AND ARTICLE 14, MDS’ SOLE RESPONSIBILITY TO GAMBRO IN THE CASE OF BREACH OF THE
FOREGOING WARRANTY OR OF SECTION 12.1 SHALL BE FOR MDS, BY MUTUAL AGREEMENT OF GAMBRO AND MDS, TO
REPAIR OR REPLACE THE MDS PRODUCTS WITH RESPECT TO WHICH SUCH WARRANTY OR REPRESENTATION IS
BREACHED, OR, AT GAMBRO’S ELECTION TO RETURN ALL PAYMENTS MADE BY GAMBRO TO MDS WITH RESPECT TO
SUCH MDS PRODUCTS OR TO CREDIT GAMBRO IN THE AMOUNT OF ALL PAYMENTS MADE BY GAMBRO TO MDS WITH
RESPECT TO SUCH MDS PRODUCTS.




          13.3 MDS hereby indemnifies and agrees to hold Gambro, its affiliates, successors and assigns
harmless from and against all claims, liability, damage, cost or expense of Gambro, including its
attorneys’ fees, with respect to any product liability claim brought by a Gambro customer, an
employee or patient thereof or other third party arising out of, or in connection with, or as a
result of the failure of any of the MDS Products to meet the representation in 12.1 or the warranty
set forth in Section 13.1 at the time of delivery to Gambro. In order to discharge its obligations
under this Section 13.3, MDS shall obtain and keep in force during the Term of this Agreement,
product liability insurance with a limit of liability of not less than $[**] per occurrence,
and naming Gambro as an additional insured.




          13.4 MDS shall defend, indemnify and hold Gambro harmless with respect to any liability of
Gambro for infringement of any patent or copyright arising out of the use or sale in the Territory
of the MDS Products supplied to Gambro under this Agreement. Gambro shall communicate to MDS all
charges of alleged infringement within a reasonable time after their receipt. Gambro will cooperate
fully with MDS in defending or otherwise resolving any



12









 






charges of infringement. MDS will have full
control of the defense of any litigation brought against Gambro for
alleged infringement by MDS Products supplied under this Agreement; however, Gambro, at its
expense, may be represented by its own counsel in any such litigation. MDS agrees to bear all other
costs and expenses of litigation, including any bonds required by a court and its own attorneys’
fees in connection with such alleged infringement, and MDS will reimburse Gambro for any
disbursement made by Gambro in satisfaction of any final judgment issued in such litigation.




          13.5 Gambro shall indemnify and hold MDS harmless from any and all claims, liability, damages,
loss, cost, or expense (including reasonable attorneys’ fees) with respect to any claim brought by
a Gambro customer, an employee or patient thereof or other third party arising out of, based on, or
caused by (i) any product claims, representations, descriptions or other statements, whether oral
or written, made or alleged to be made by Gambro or its representatives in any advertising,
publicity, promotion or sale of any of the MDS Products where such product claims were inconsistent
with the labeling, and (ii) any product claim arising out of, based on, or caused by negligent
handling of the MDS Products by Gambro or its agents (including, without limitation, failure to
sell MDS Products in the original, unopened Units of Sale, as described in Exhibit B). In order to
discharge its obligations under this Section 13.5, Gambro shall obtain and keep in force during the
Term of this Agreement general liability insurance with a limit of liability of not less than
$[**], and naming NxStage as an additional insured.




          13.6 With respect to any claim for which a Party (the “Claiming Party”) seeks indemnification
from the other Party (“Indemnifying Party”) under this Agreement, the Claiming Party shall: (a)
advise the Indemnifying Party of any claim, proceeding or suit (individually, an “Action”), in
writing, within thirty (30) days after the claiming Party has received notice of such Action or
within such period of time so as not to materially prejudice the right of the Indemnifying Party
with regard to the defense of such Action, whichever period is shorter; (b) assist the Indemnifying
Party and its representatives in the investigation and defense of any Action for which
indemnification is provided; and (c) not offer to settle, settle or otherwise compromise such
Action without the Indemnifying Party’s prior written consent, which consent will not be
unreasonably withheld, unless such settlement fully releases the Claiming Party without any
liability, loss, cost or obligation to such Party.




          13.7 NOTWITHSTANDING ANY PROVISION IN THIS AGREEMENT THAT MAY BE INTERPRETED TO THE CONTRARY,
IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR THE OTHER PARTY’S LOSS OF PROFITS, LOSS OF USE, OR
INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES OF ANY KIND.



     14.0 TERMINATION


In addition to the rights of termination provided elsewhere in this Agreement:





          14.1 Either party may terminate this Agreement for any material breach of it by the other
party, by giving [**] days written notice to the other party, if such breach shall, as of the
expiration of this [**] day period, remain uncured.




          14.2 Either Party may terminate this Agreement upon written notice to the other in the event
of: (i) insolvency of the other Party, or the appointment of a receiver by the other Party for all
or any substantial part of its properties, provided that such receiver is not discharged within
sixty (60) days of its appointment; (ii) the adjudication of the other Party as a bankrupt; (iii)
the admission by the other Party in writing of its inability to pay its debts as they become due;
(iv) the execution by the other Party of an assignment for the benefit of its creditors; (v) the
inability of the other Party to pay its debts as they come due; or (vi) the filing by the other
Party of a petition to be adjudged as a bankrupt, or a petition or answer admitting the material
allegations of a petition filed against the other Party in any bankruptcy proceeding, or the acts
of the other Party to any other judicial proceeding intended to effect a discharge of the debts of
the other Party, in whole or in part.



     15.0 EFFECT OF TERMINATION




          15.1 No termination of this Agreement, other than by reason of breach of this Agreement by
Gambro or if Gambro has received notice of termination pursuant to Section 14.2 of this Agreement,
will relieve MDS from its obligation to deliver all MDS Products ordered pursuant to any Delivery
Order of Gambro properly placed by Gambro in accordance with the provisions of this Agreement (with
a Due Date falling within the Term of this Agreement), nor will any termination, other than by
reason of breach of this Agreement by MDS or if MDS has received notice of termination pursuant to
Section 14.2 of this Agreement, relieve Gambro from accepting and



13









 






paying for all MDS Products
ordered by Gambro under any Delivery Order properly issued by Gambro in
accordance with the provisions of this Agreement or relieve Gambro of its obligation pursuant to
Section 4.3.




          15.2 Each Party understands that the rights of termination hereunder are absolute and, except
as provided otherwise in this Agreement, are cumulative with any other legal and equitable remedies
that may be available to the terminating Party. Except as otherwise provided for in this
Agreement, neither Party shall incur any liability whatsoever for any damage, loss or expenses of
any kind suffered or incurred by the other arising from or incident to the terminating Party’s
proper exercise of its termination rights in accordance with Section 14 of this Agreement. In
particular, without in any way limiting the foregoing, neither Party shall be entitled to any
damages on account of prospective profits or anticipated sales related to such exercise of
termination rights.




          15.3 MDS shall repurchase from Gambro, upon Gambro’s or MDS’s request, on or before [**], any inventory remaining in Gambro’s inventory from the Initial Orders at the purchase
price paid for such inventory by Gambro to MDS[**], if the
Exclusive Period does not commence on or before[**], as well as, upon MDS’s request,
any inventory remaining in Gambro’s inventory following the termination date at the purchase price
paid for such inventory by Gambro to MDS (any such repurchase to occur no later than days after the
termination date). Any inventory not purchased by MDS may be sold, at Gambro’s sole discretion and
to Gambro’s sole benefit, provided that (i) Gambro must comply with all applicable terms of this
Agreement in connection with such sale and (ii) all such sales must be completed within one hundred
and eighty (180) days of termination. If Gambro elects to sell the remaining inventory of
Products, Gambro shall be considered an authorized distributor for MDS and may use any
then-existing promotional material for the sole purpose of selling such remaining Gambro inventory.



     16.0 MDS PRODUCT RECALL




          16.1 If any Product defect or any final, non-appealable governmental or court action or any
voluntary action by MDS results in: (a) the recall, destruction or withholding from the market of
any MDS Product sold under this Agreement (a “Recall”); or (b) institution of a field correction of
any MDS Product sold under this Agreement (a “Field Correction”) (Recalls and Field Corrections
shall be collectively referred to herein as “Product Actions”), MDS shall bear the Direct Costs (as
hereinafter defined) of and shall be responsible for all corrective actions associated with such
Product Action to the extent such Product Action: (i) results from any cause or event arising from
the responsibility of MDS, or from a breach by MDS of one or more of its representations and
warranties, under this Agreement; or (ii) is otherwise attributable to MDS. Gambro shall bear the
Direct Costs of and shall be responsible for all corrective actions associated with such Product
Action to the extent such Product Action: (x) results from any cause or event arising from the
responsibility of Gambro under this Agreement or from a breach by Gambro of one or more of its
representations and warranties under this Agreement; or (y) is otherwise attributable to Gambro.
If the Parties are equally at fault for such Product Action, or should it prove impossible to
assign fault to either Party, the Parties shall share such Direct Costs equally. Regardless of the
cause of the Product Action, MDS will be responsible for communication to the regulatory or
governmental entities and all customers regarding such Product Action. Gambro shall provide MDS a
list of all customer locations to enable MDS to fulfill its obligations hereunder. For purposes of
this Section 16.1, the term “Direct Costs” shall mean all reasonable out-of-pocket costs and
expenses reasonably and actually incurred by Gambro or MDS in notifying customers, destroying or
returning MDS Products in connection with the Product Action, and providing replacement MDS
Products in connection with the Product Action. Gambro’s rights hereunder shall be in addition to
those set forth in Section 10.1.




          16.2 Gambro shall maintain complete and accurate records, for such periods as may be required
by applicable law, of all the MDS Products sold by Gambro. Gambro may purchase at its own expense
from another supplier, or manufacture for itself, replacement Products for recalled MDS Products.




          16.3 In the event of a recall of any of the MDS Products sold by Gambro, the Parties will
cooperate fully with each other in effecting such a recall, including without limitation promptly
contacting any customer of Gambro and communicating to such customer of Gambro any information or
instructions that either party may desire be communicated to such customer of Gambro in conformance
with the obligations of Section 11.5.




          16.4 Gambro shall not initiate any recall of MDS Products.



14









 





     17.0 DISCLOSURE OF INFORMATION




          17.1 Disclosure of information between the Parties hereto shall be covered by that certain
non-disclosure agreement between the Parties hereto dated as of [**]



     18.0 OTHER PROVISIONS




          18.1 All sales of MDS Products to Gambro under this Agreement shall be subject to the
provisions of this Agreement and shall not be subject to the terms and conditions contained in any
Delivery Order of Gambro, or confirmation or invoice of MDS except insofar as any such Delivery
Order, confirmation or invoice establishes (i) the quantity of Codes ordered for delivery, (ii) the
Due Date of such Codes, and (iii) the quantity of Codes to be delivered at each DDP Location.




          18.2 This Agreement contains the entire agreement between the Parties relating to the MDS
Products and all prior proposals, discussions, and writings by and between the Parties and relating
to the subject matter herein are superseded by this Agreement. None of the terms of this Agreement
shall be deemed to be waived by either party or amended unless such waiver or amendment is in
writing and is signed by the party to be charged with such waiver or amendment, and such writing
recites specifically that it is a waiver of, or amendment to, the terms of this Agreement.




          18.3 All notices and other communications provided for or permitted hereunder shall be made in
writing by hand delivery, certified mail, return receipt requested facsimile transmission (with
confirmation of transmission), or air courier which guarantees overnight delivery:




          If to Gambro:




               Gambro Renal Products, Inc.




               14143 Denver West Parkway




               Lakewood, CO 80401




               Attention: Marketing Manager, Bloodlines & Concentrates




               With a copy to: Chief Legal Counsel




          If to MDS:




               President




               Medisystems Corporation




               439 South Union Street, 5th Floor




               Lawrence, MA 01843




               With a copy to: General Counsel




or to such other address as to which either party may properly notify the other. All such notices
and communications shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; three business days after being deposited in the mail, postage prepaid, if
mailed; when receipt is acknowledged, if sent by facsimile transmission; and on the day delivered,
if sent by overnight air courier guaranteeing next day delivery.




          18.4 This Agreement shall be binding upon and inure to the benefit of the Parties, their
successors and permitted assigns. This Agreement shall be assignable by either party with the
written consent of the other; provided, however, that either party may assign this Agreement to any
entity controlled by or under common control with such party and in such event the assigning party
shall provide the other party with written notice of such assignment.




          18.5 This Agreement is deemed to have been entered into in the State of Delaware and its
interpretation, construction, and the remedies for its enforcement or breach are to be applied
pursuant to and in accordance with the laws of the State of Delaware.




          18.6 In the event that a court of competent jurisdiction holds that particular provisions or
requirements of this Agreement are in violation of any law, such provisions or requirements shall
be enforced and shall remain in full force and effect to the extent they are not in violation of
any such law or are not otherwise unenforceable, and all other provisions and requirements of this
Agreement shall remain in full force and effect.



15









 








          18.7 This Agreement may be executed in two (2) original counterparts, each of which shall be
deemed an
original, but both of which together shall constitute one and the same instrument. One or more
counterparts of this Agreement may be delivered by facsimile, with the intention that delivery by
such means shall have the same effect as delivery of an original counterpart hereof.




          18.8 Failure to insist upon strict compliance with any of the terms, covenants, or conditions
hereof will not be deemed a waiver of such term, covenant, or condition, nor will any waiver or
relinquishment of, or failure to insist upon strict compliance with, any right or power hereunder
at any one or more times be deemed a waiver or relinquishment of such right or power at any other
time or times.




          18.9 The relationship of the Parties under this Agreement is that of independent contractors.
Nothing contained in this Agreement is intended or is to be construed so as to constitute the
Parties as partners, joint venturers, or either Party as an agent or employee of the other.
Neither Party has any express or implied right under this Agreement to assume or create any
obligation on behalf of or in the name of the other, or to bind the other Party to any contract,
agreement or undertaking with any third party, and no conduct of the Parties shall be deemed to
infer such right.



     19.0 DEFINITIONS




          The following list of defined terms used in this Agreement is provided for convenience only.
Reference must be made to the relevant sections of this Agreement for the complete definitions.




	
	          19.1 The “Act” has the meaning set forth in Section 10.1.






	
	          19.2 “Action” has the meaning set forth in Section 13.6.






	
	          19.3 “Base Prices” means the prices indicated on Exhibit D as Base Prices
[**] (Section 6.1).






	
	          19.4 “BTL” has the meaning set forth in Section 1.1.






	
	          19.5 “Calendar Quarter” means each three (3) month period ending on March 31, June 30,
September 30 and December 31 during the Term of this Agreement






	
	          19.6 “Claiming Party” has the meaning set forth in Section 13.6.












	
	          19.7

“Codes” means the codes of each MDS Product that meet the Specifications (Section 3.1).









	
	          19.8 “Confidential Information” shall have the meaning given to it under the
Non-Disclosure Agreement entered into between the Parties dated as of October 31, 2008.






	
	          19.9 “Contract Year” has the meaning set forth in Section 4.2.







	
	          19.10 “DDP Location” has the meaning set forth in Section 5.1.






	
	          19.11 “Delivery Order” means noncancellable monthly order(s) for MDS Products that Gambro
commits to purchase from MDS (Section 4.5.).






	
	          19.12 “Delivery Window” has the meaning set forth in Section 5.3.






	
	          19.13 “Direct Costs” has the meaning set forth in Section 16.1






	
	          19.14 “Due Date” has the meaning set forth in Section 4.5.






	
	          19.15 “Effective Date” means the date set forth in the Preamble of this Agreement.






	
	          19.16 “Exclusive Period” has the meaning set forth in Section 4.2.






	
	          19.17 “Exclusive Products” has the meaning set forth in Section 4.3.






	
	          19.18 “FDA” has the meaning set forth in Section 10.1.






	
	          19.19 “Field Correction” has the meaning set forth in Section 16.1.






	
	          19.20 “Gambro” has the meaning set forth in the Preamble.






	
	          19.21 “Indemnifying Party” has the meaning set forth in Section 13.6






	
	          19.22 “Lot” has the meaning set forth in Section 11.2.






	
	          19.23 “MDR” has the meaning set forth in Section 11.10.






	
	          19.24 “MDS” has the meaning set forth in the Preamble.






	
	          19.25 “MDS Products” has the meaning set forth in Section 1.1.






	
	          19.26 “MSDS” (“Material Data Safety Sheets”) has the meaning set forth in Section 11.9.






	
	          19.27 “Order Date” has the meaning set forth in Section 4.5






	
	          19.28 “Premiums” means [**] (Section 6.3).






	
	          19.29 “Product Actions” has the meaning set forth in Section 16.1.







	
	          19.30 “Products” has the meaning set forth in Section 1.1.





16









 








	
	          19.31 “Quality Systems and GMP Requirements” means the current and any future quality system
and good
manufacturing practices regulations under 21 C.F.R. Part 820 to the extent that such
regulations are applicable to any MDS Product, as such regulations are promulgated by the
FDA. The applicable Quality Systems and GMP Requirements for any lot of MDS Product shall
be those regulations in effect when such lot, or portion thereof, is manufactured for
Gambro (Section 11.1)






	
	          19.32 “Recall” has the meaning set forth in Section 16.1.






	
	          19.33 “Specifications” means the specifications of the Codes as set forth in Exhibit C, or as
such Exhibit may be amended from time to time pursuant to Sections 9.1 or 9.2 hereof, or as
modified by Section 9.3 (Section 3.1).






	
	          19.34 “Term” means the five (5) year period beginning on the Effective Date of this Agreement
and any extensions thereof (Section 2.1).






	
	          19.35 “Territory” means the United States of America (Exhibit A and Section 1.1).







	
	          19.36 “Training Materials” has the meaning set forth in Section 11.13.






	
	          19.37 “Unit of Sale” means the packaging which comprises multiples of each Code, whether such
Codes are individually pouched or not, in cartons which are sealed, shippable and contain all
such Codes’ labeling or references required by end-users and are described in Exhibit B
(Section 10.5).






	
	          19.38 “Vendor Notice of Change” means the form set forth in Exhibit E (Section 9.3).





     IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their authorized
representatives as of the date first set forth above.



GAMBRO RENAL PRODUCTS, INC.



	 	 	 	 
	By: 
	/s/ Nick Mendez	 	 
	Name: Nick Mendez


	 	 
	Title: President Gambro Americas
		 	 






MEDISYSTEMS CORPORATION



	 	 	 	 
	By: 
	/s/ Jeffrey H. Burbank	 	 
	Name: Jeffrey H. Burbank

	 	 
	Title: President and CEO
	 	 






17









 






Exhibit A



Territory



The Territory is the United States of America for MDS Products sold to DaVita. The Territory is
the United States of America for MDS BTL sold to [**]




18









 








Exhibit B

MDS PRODUCTS

List of Codes




[**]








19









 





Exhibit C — Specifications



(sample page)




[**]
  

 
 






20











 






Exhibit D

Base Prices




	 	 	 	 	 
	
	 			 
	 [**]
	 	 	 	 
	

	 			 
	
	 	 		 








21









 










Exhibit E

VENDOR NOTICE OF CHANGE



Reference is made to the Extracorporeal Disposables Distribution Agreement dated
                     between Medisystems Corporation and Gambro, pursuant to which MDS has agreed to notify
Gambro in writing of any substantial change in design, components, or packaging of the MDS Products
which may necessitate in-servicing or notification to end-users:



MDS hereby notifies Gambro of the following change:
 

Plans for initiation of this change are as follows:
 





	 	 	 	 	 	 	 
	 	 	MEDISYSTEMS CORPORATION
	 	 	 
	 	 	 	 
	 	 	By:	 	 

	 	 	 

	 	Signature	 	 
	 	 	 
	 	 	 	 
	 	 	 

	 	Name:
	 	 

	 	 	 
	 	 	 	 
	 	 	Title:	 	 

	 	 	 
	 	 	 	 
	 	 	 

	 	Date:
	 	 










 

22









 





Exhibit F

 Medisystems Field Experience Worksheet




Date Received:                    

Received Via (Circle): Fax, Telephone, Letter            From:                    

Received By:                                                  

Incident Date:                                                                 

No. of Patients/Donors:                     No. of Incidents:                    

Product Code:                    

Lot Numbers(s):                                                              

No. of Products Involved:                    

Complainant: Name:                    

Title:                                                  

Health Care Professional (Circle): Yes/No

Occupation:                    

Facility:                    

Address:                                                                                

City:                     State & Zip:                    

Telephone: (___)                    

Complainant’s Ref. No:                    

Distributor(s):                     

Contact:                                                                 

Complaint Description:                    



 

Patient/Donor Injury? (Circle): Yes / No



 





23









 








     If yes, describe injury and any medical intervention (i.e., transfusion) required:



      




	 	 	 	 	 
	Blood Loss? (Circle): Yes/No.

	 	Amount of Blood Loss:
	 	<20cc. 20-100cc. >100cc.
	 

	 	 	 	Exact Amount if Available; if
not circle closest estimate







As appropriate list device and/or machine codes and lots which interfaced with the complaint
device: Item:                    




Code:                     Lot:                    




Item:                     Code:                     Lot:                    




Will the complainant return samples? Yes / No.




Samples may be returned via Fedex with billing to Medisystems Account # 1058-39626





Did the user clinic or distributor file a MedWatch form with the FDA? (Circle) Yes / No



	 	 	 
	 
	(Signature)

	 	(Date)







Immediately fax form with all available information to Medisystems Corporation




24