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news.MedPro Safety Products has entered into two medical supply manufacturing agreements with Greiner Bio-One, a division of Greiner Bio-One International, an international manufacturer and supplier of medical products with locations in Austria, Germany, Hungary, US and Brazil as well as a worldwide distribution network.
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The two agreements grant Greiner the right to manufacture, market and distribute MedPro’s tube-activated and skin-activated blood collection systems and its winged ‘butterfly’ safety needle system.
Each agreement extends for a six-year term from the commencement of initial commercial manufacturing of the applicable product. Greiner agreed to pay MedPro a production royalty per unit on a minimum volume of units of each product over the term of the agreements plus additional cash amounts to acquire the production lines for the products.
Greiner agreed to pay MedPro a capital amount not to exceed $8.6 million for the rights to MedPro’s tube-activated and skin-activated blood collection system. Additionally, Greiner is obligated to pay a minimum production royalty of $33 million for its commitment of a minimum of 275 million pieces during the initial five years of the agreement.
Greiner also entered into an agreement for the exclusive right to manufacture, market and distribute the winged ‘butterfly’ safety needle system on similar terms. Under the agreement for the winged butterfly product, Greiner agreed to pay MedPro a capital amount not to exceed $5 million in exchange for the production line for this product.
Greiner will make an initial payment of $1 million of this amount upon delivery and acceptance of the initial design plan by Greiner on or before October 1, 2008. Additionally, Greiner is obligated to pay a minimum production royalty of $10.8 million for its commitment of a minimum of 75 million pieces during the initial five years of the agreement.
Including combined capital investment and minimum royalty payments, these agreements obligate Greiner to pay MedPro a minimum of $57.8 million for all products and production line equipment during the term of the agreements.