MANUFACTURING AGREEMENT
THIS MANUFACTURING AGREEMENT (this "Agreement") is entered into as of March
___, 2000, by and between Haemacure Corporation, a Canadian corporation having
its principal place of business at 2001 University, Suite 430, Montreal,
(Quebec) H3A 2A6, Canada ("Haemacure"), and Bio Products Laboratory, a unit of
the National Blood Authority, a special authority established under United
Kingdom Statutory Instrument No. 585 of 1993, having its principal place of
business at Dagger Lane, Elstree, Herts. WD6 3BX, United Kingdom ("BPL").
WHEREAS, pursuant to a license agreement (the "License Agreement") dated as
of April 21, 1997, between Immuno International AG, a Swiss corporation
("Immuno") and Haemacure, Haemacure possesses a perpetual license to, among
other things, manufacture and sell a biological fibrin sealant product recently
approved by the United States Food and Drug Administration ("FDA") and a frozen
formulation of such product, and has the right to enter this Agreement pursuant
to said license.
WHEREAS, BPL is in the business, among other things, of manufacturing
different types of biological products.
WHEREAS, subject to the terms and conditions of this Agreement, BPL desires
to manufacture to Haemacure's specifications and under Haemacure's label and
sell to Haemacure fibrin sealant products; and Haemacure desires to purchase
such products from BPL.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants set forth below, Haemacure and BPL hereby agree as follows:
1. KEY DEFINITIONS.
1.1 Act. The term "Act" means the United States Federal Food, Drug and
Cosmetics Act, as amended.
1.2 BLA. The term "BLA" means a Biologics License Application to be filed
with the FDA by Haemacure for the Products.
1.3 Devices. The term "Devices" means all accessories, applicators and
other devices supplied by Haemacure to BPL for packaging with the
Products.
1.4 Facility. The term "Facility" means BPL's facility located at Dagger
Lane, Elstree, Herts. WD6 3BX, United Kingdom.
1.5 FDA. The term "FDA" means the United States Food and Drug
Administration or any successor entity thereto, including its Center
for Biologics Evaluation and Research (CBER).
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1.6 FDA Approval Date. The term "FDA Approval Date" means the earlier of
the two dates upon which the FDA approves the BLA for the Initial
Product or Frozen Formulation to be sold in the United States and
manufactured by BPL.
1.7 Frozen Formulation. The term "Frozen Formulation" means the fibrin
sealant product in the frozen formulation state licensed by Haemacure
pursuant to the License Agreement, including any improvements
obtained by Haemacure from Immuno pursuant to such License Agreement.
1.8 Haemacure-Supplied Components. The term "Haemacure-Supplied
Components" means the various products listed on Exhibits H and L
which Haemacure shall procure and supply to BPL for processing or
inclusion in the Initial Product and Frozen Formulation.
1.9 Improved Product. The term "Improved Product" means a product
embodying an improvement, modification or change to the Initial
Product or Frozen Formulation as proposed by Haemacure and approved
by the FDA.
1.10 Initial Product. The term "Initial Product" means the fibrin sealant
product currently approved by the FDA and known under the trade name
Hemaseel APR(TM) which is fibrinogen, thrombin and diluent; the
product circular and specifications for which are attached to this
Agreement as Exhibit A and as may be amended prior to FDA approval of
the BLA for such product.
1.11 Initial Term. The term "Initial Term" shall mean the period beginning
on the date of this Agreement and expiring five (5) years from the
FDA Approval Date.
1.12 Labeling Specifications. The term "Labeling Specifications" means the
specifications by which BPL shall label the Products and Devices (if
any), including, without limitation, the graphics, brand name and any
other language, including without limitation any warnings,
descriptions or instructions relating to the use of the Products and
Devices, and any other information required by law to be placed on
the labeling for the Products and Devices. Haemacure shall be
responsible for supplying BPL with the Labeling Specifications prior
to submission to the FDA for approval. The Labeling Specifications as
approved by the FDA for a specific Product (including any Device
packaged with the Product) shall be attached to this Agreement as
Exhibit B.
1.13 Packaging Specifications. The term "Packaging Specifications" means
the specifications by which BPL shall package the Products and
Devices (if any), including, without limitation, the types, volumes
and dimensions of each container in which the Products and Devices
(if any) shall be packaged. Haemacure shall be responsible for
supplying BPL with the Packaging Specifications prior to submission
to the FDA for approval. The Packaging Specifications as approved by
the FDA for a specific Product (including any Device packaged with
the Product) shall be attached to this Agreement as Exhibit C.
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1.14 Plasma. The term "Plasma" as used in connection with the Initial
Products, Frozen Formulation or Improved Product means plasma sourced
from the United States packaged and delivered in accordance with the
specifications described on Exhibit I.
1.15 Product Specifications. The term "Product Specifications" means the
concentrations and composition of each constituent and performance of
the final product and the manufacturing process, quality testing and
release procedures and other specifications related to the Products
and which shall be attached to this Agreement as Exhibit A. The
Product Specifications may be revised by the written consent of the
parties or upon the request of the FDA; and in the event of any such
revision, the Product Specifications as so revised shall be the
Product Specifications for purposes of this Agreement. The Product
Specifications as approved by the FDA for the Initial Product are
attached as Exhibit A under the trade name Hemaseel APR(TM).
1.16 Products. The term "Products" means the Frozen Formulation, Initial
Product, Improved Product and Second-Generation Products manufactured
by BPL in accordance with the Specifications.
1.17 RPI. The term "RPI" means the General Index of Retail Prices which is
in Table 18.1 in the Monthly Digest of Statistics published in the
United Kingdom by the Office for National Statistics.
1.18 Second-Generation Products. The term "Second-Generation Products"
means the fibrin sealant product owned by Haemacure and known under
the trade name Hemaseel HMN or any and all other fibrin sealant
products or components owned by Haemacure other than the Frozen
Formulation, Initial Product or Improved Product.
1.19 Specifications. The term "Specifications" means the Packaging
Specifications, Labeling Specifications and Product Specifications.
1.20 Technically Operational Facility. The term "Technically Operational
Facility" means a facility where the Operational Qualification
protocol requirements (OQ) have been successfully completed.
Documentation will show that the Operating Performance of the
facility conforms to specifications. After this stage the facility
will be available for Performance Qualification where documentation
will be provided to demonstrate the process and product conforms to
specifications determined through independent parameter measuring and
sampling. This will be performed using actual production materials
and components.
2. PRE-MANUFACTURING OBLIGATIONS.
2.1 Technical Committee. The parties acknowledge that in order for BPL to
manufacture the Initial Product and Frozen Formulation for sale by
Haemacure in the United States, the parties must accomplish: (a) the
transfer of technology relating to the Initial Product and Frozen
Formulation from Immuno to BPL; (b) design and modify BPL's Facility
to accommodate the manufacturing process for the Initial Product and
Frozen Formulation; (c) install and validate equipment necessary for
the manufacturing process; (d) comply with FDA requirements for the
manufacture of a biologic pursuant to the Specifications; and (e)
complete
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such validation, stability, comparability and clinical studies as
required by the FDA to obtain BLA approval and issuance of a
Biologics License. In order to facilitate the achievement of these
tasks, the parties agree to establish a technical committee comprised
of at least two representatives of each party (the "Technical
Committee"). The initial members of the Technical Committee, tasks
and functions of the committee and meeting schedule are listed on
Exhibit D. The Technical Committee shall be responsible for
monitoring the progress of completing the manufacturing process at
the Facility and obtaining FDA approval for the manufacture of the
Initial Product and Frozen Formulation. The Technical Committee shall
report to the Oversight Committee described in Section 2.6 below.
2.2 BPL Obligations. In order to obtain FDA approval for the manufacture
of the Initial Product and Frozen Formulation in accordance with the
Specifications, BPL shall use all commercially reasonable efforts to:
(a) transfer the technologies from Immuno to BPL; (b) design the
Facility to accommodate the manufacturing processes; (c) make such
modifications to the Facility as are necessary to manufacture the
Initial Product and Frozen Formulation at the Facility; (d) procure
such equipment (other than equipment listed on Exhibits E and M),
staff and supplies necessary to obtain FDA approval for the
manufacturing of the Initial Product and Frozen Formulation; (e)
procure such material or components, other than Devices and
Haemacure-Supplied Products, necessary to manufacture the Initial
Product and Frozen Formulation; (f) in consultation with Haemacure,
develop a manual regarding the quality system for the manufacture of
the Initial Product and Frozen Formulation (the "Quality Manual");
(g) in consultation with Haemacure, develop the standard operating
procedures applicable for the Products including procedures relating
to manufacturing, testing and critical engineering system monitoring
and control, cleaning/sanitation, calibration of equipment,
preventive maintenance, employee training, pest control,
environmental control/monitoring, equipment/process validation,
labeling/packaging control, failure investigations, internal quality
audits, complaint handling, computer systems validation and
maintenance, product release, product/process change control and
delegation of authority (the "Standard Operating Procedures"); and
(h) conduct such stability, comparability and batch studies or
non-clinical studies as are required of BPL to obtain FDA approval
for the manufacture of the Initial Product and Frozen Formulation.
2.3 Haemacure Obligations. In order to obtain FDA approval for the
manufacture of the Initial Product and Frozen Formulation, Haemacure
shall use all commercially reasonable efforts to: (a) facilitate the
transfer of technology from Immuno to BPL, including exercising all
contractual avenues Haemacure has pursuant to the License Agreement
and Manufacturing Agreement between Immuno and Haemacure (including
using its best efforts to negotiate for improvements to the Frozen
Formulation or Initial Product, if any, pursuant to the License
Agreement); (b) assist BPL in the design and modifications of the
Facility; (c) provide, at no cost to BPL, a consultant skilled in
FDA/CBER biological products facility approval to assist BPL in
obtaining FDA approval for the Facility in the manufacture of the
Initial Product and Frozen Formulation; (d) procure the equipment
listed on Exhibits E and M; (e) provide such labeling and packaging
specifications as required for the submission of the BLA; (f) provide
the Devices and Haemacure-Supplied Components for purposes of
manufacturing lots for submission to the FDA pursuant to the BLA; (g)
conduct such clinical studies as are required by the FDA in order to
obtain the Biologics License; and (h) file all
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necessary governmental and regulatory applications for the sale of
the Initial Product and Frozen Formulation in the United States.
2.4 Project Schedule. The parties acknowledge that the purpose of this
Agreement is to obtain FDA approval for the manufacture of the
Initial Product on a critical time basis. The parties have mutually
established the detailed project schedule and budget attached hereto
as Exhibit F for manufacture of Initial Product, and BPL and
Haemacure shall take all steps necessary to continuously meet the
requirements of such schedule. The parties have mutually established
a preliminary project schedule and budget attached hereto as Exhibit
K for the manufacture of the Frozen Formulation, it being
specifically understood that such project schedule and budget is
preliminary and subject to revision based on further investigation by
Haemacure and BPL regarding the Frozen Formulation process. After
such additional investigation, and upon FDA approval of the Frozen
Formulation as manufactured by Immuno, the parties shall present to
the Oversight Committee a final detailed project schedule and budget
which shall be attached as Exhibit K and replace the preliminary
budget attached hereto. Any amendment or modification of such
schedules shall be in writing and signed by all members of the
Oversight Committee. The Technical Committee shall provide the
Oversight Committee with such reports as the Oversight Committee may
request in order to monitor the parties progress in the performance
of their obligations hereunder. The parties acknowledge that the
schedule attached as Exhibits F and K may need to be revised on
account of (a) information learned by BPL's visits to the Immuno
facility; or (b) lead times for the equipment required to manufacture
the Initial Product are greater than as shown on Exhibit F. A party's
failure to materially comply with Exhibit F (and K as finally
approved by the Oversight Committee) due solely to matters within its
control shall entitle the other party to terminate this Agreement.
For purposes of the foregoing sentence, material compliance shall
mean that the schedule in Exhibit F (and Exhibit K as finally
approved by the Oversight Committee) shall not be delayed greater
than five (5) months due to matters solely within the control of the
breaching party.
2.5 Subcontracts. Haemacure shall approve in advance and in writing all
subcontracts which BPL proposes to select in compliance with UK
procurement laws in order to perform its obligations hereunder for
which services or materials will require an expenditure greater than
One Hundred Thousand Dollars ($100,000). Haemacure shall not be
responsible for any orders placed or commitments made to
subcontractors in the absence of its specific written approval.
2.6 Oversight Committee. The parties agree to appoint an oversight
committee which shall consist of at least two representatives of each
party (the "Oversight Committee"). The initial members of the
Oversight Committee are listed on Exhibit G. The Oversight
Committee's main responsibility shall be the parties adherence to the
Agreement and the resolution of disputes amongst the Technical
Committee. The Oversight Committee shall also be responsible for
issuing reports to Haemacure for submission to the trustee appointed
pursuant to the Consent Order entered into between Baxter
International, Inc. and the Federal Trade Commission No. C-3726 (the
"Trustee").
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2.7 Other Products. To the extent that the parties agree to have BPL
manufacture an Improved Product or Second-Generation Product, the
Technical Committee shall develop a project schedule and budget
similar to the schedule and budget attached as Exhibit F. Upon
approval by all members of the Oversight Committee of the project
schedule and budget created by the Technical Committee, the parties
shall initiate the project in accordance with this Section 2 and the
Agreement.
2.8 Frozen Formulation. The parties acknowledge that they have executed
this Agreement prior to FDA approval of the Frozen Formulation in any
form. The parties agree to submit to the Oversight Committee all
issues regarding scheduling, budget and other issues necessary for
BPL to manufacture the Frozen Formulation. BPL will use commercially
reasonable efforts to manufacture the Frozen Formulation as licensed
by Haemacure from Immuno, as such may be modified by improvements,
modification or changes resulting from development by Immuno,
Haemacure and/or BPL. Haemacure will use commercially reasonable
efforts to negotiate for any improvements to the Frozen Formulation
pursuant to the License Agreement, including pursuing all options and
avenues with the Trustee.
3. SUPPLY OF PRODUCTS BY BPL.
3.1 Supply of Products. Subject to the terms and conditions of this
Agreement and for the term of this Agreement, BPL shall manufacture
and supply to Haemacure and Haemacure shall purchase from BPL,
Products pursuant to purchase orders placed by Haemacure in
accordance with Section 5.
3.2 Exclusive Supply. In order to ensure that Haemacure will have a
continuing and reliable source of the Products, BPL agrees that
during the term of this Agreement it shall not, without the prior
written consent of Haemacure, manufacture for, sell, give away or
otherwise supply to any person or entity other than Haemacure any of
the Products or any other biological adhesive products that
Haemacure, in its reasonable discretion, deems competitive with the
Products. This restriction shall continue for five (5) years
following the FDA Approval Date unless in any of the first three
years following FDA Approval Date Haemacure shall fail to complete
the minimum purchases required by Section 3.3, in which case this
restriction shall terminate at the end of the third such year.
Notwithstanding the foregoing, BPL may continue its research and
development of the fibrin sealant project in existence as of the date
of this Agreement, and any manufacture or sale to a third party or
other supply of the fibrin sealant product developed from this
project shall not constitute a violation of this Agreement. Further,
nothing in this Agreement shall prevent the manufacture for, sale or
supply to the National Health Service anywhere in the United Kingdom
by BPL of any product required for distribution and use within the
National Health Service.
3.3 Minimum Purchase. During each of the three years following the FDA
Approval Date, Haemacure shall purchase from BPL total annual
Products which in quantity are equivalent to the processing of 50,000
liters of Plasma at a yield of 6 x 1 ml dose equivalence (75-115 mg
fibrinogen) per liter of plasma. On or before the expiration of each
such year, the parties shall review and, if necessary, by mutual
written consent, revise the
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minimum purchase requirements for the upcoming year. If the parties
fail to revise the minimum purchase requirements in accordance with
the previous sentence, then the minimum purchase requirements for the
upcoming year shall remain the same as they were for the previous
year.
3.4 Sole and Exclusive Rights of BPL. Provided BPL is capable of
supplying all of Haemacure's requirement for Products, Haemacure
shall not, during the Initial Term, appoint or contract with any
other person, firm or company to manufacture the Initial Product or
Frozen Formulation.
3.5 Location of Manufacture. BPL shall not, without the prior written
consent of Haemacure not to be unreasonably withheld or delayed,
manufacture, affix labeling to and/or package the Products and
Devices at any location other than the Facility.
3.6 BPL's Obligations. In addition to its warranty obligations under
Section 6.5, BPL shall: (a) procure such materials or components
other than Devices and Haemacure-Supplied Components, necessary to
fill Haemacure's orders for the Products; (b) maintain the equipment
for the production of the Products in good working condition; (c)
prepare and maintain a lot history record, including record of any
Product retention which may have been issued against the lot during
the manufacturing process, the action taken and the disposition of
the retention; (d) comply with current Good Manufacturing Practices
as promulgated under 21 C.F.R. of the United States Code and in
accordance with the Biologics Act or Food, Drug and Cosmetics Act and
all other relevant regulations or guidance issued by the FDA,
including, without limitation, any approvals or notices relating to
the Products; (e) notify Haemacure within twenty-four (24) hours of
each visit to Facility by a regulatory agency, if such visit affects
or concerns the Products or Devices; (f) after consultation with
Haemacure , respond to any FDA Form 483 Notices, Warning Letters, or
Notices of Section 305 Hearings or any other FDA communications,
which relate to the Products or Devices, and supply Haemacure within
twenty-four (24) hours after receipt and/or response with copies of
such notices and letters and responses; (g) communicate to Haemacure
within twenty-four (24) hours of receipt of any complaints relating
to the Products or Devices received by BPL; (h) communicate with and
assist Haemacure regarding the complaint analyses and decisions
relating to Adverse Drug Experiences filings with respect to the
Products; (i) maintain and comply with the quality system as
described in the Quality Manual applicable to the manufacture of the
Products; (j) not mislabel, misbrand or adulterate any of the
Products or any of the Devices; (k) maintain and comply with the
Standard Operating Procedures and FDA laws or regulations which are
applicable to the Products or Devices; and (l) grant Haemacure's
representatives access to the Facility at reasonable times for the
purpose of auditing BPL's compliance with this Section 3.6.
3.7 Labeling Specifications. Haemacure shall provide BPL with all artwork
and designs necessary for the Products and Devices to be labeled in
accordance with the Labeling Specifications and Haemacure shall be
solely responsible for the content and design of the Labeling
Specifications. BPL shall be responsible for contracting with
third-party vendors, if necessary, for the supply of labeling
materials necessary to fill Haemacure's orders for the Products.
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3.8 Packaging Specifications. Haemacure shall provide BPL with the
necessary specifications and designs necessary for the Products and
Devices to be packaged in accordance with the Packaging
Specifications, and Haemacure shall be solely responsible for the
content and design of the Packaging Specifications. BPL shall be
responsible for contracting with third party vendors for the supply
of packaging materials necessary to fill Haemacure's orders for the
Products.
3.9 Haemacure's Obligations. During the term of this Agreement, Haemacure
shall: (a) obtain and maintain the Biologics License for the
Products; (b) supply Devices and Haemacure-Supplied Components in
accordance with Article 4 hereof; (c) ensure that the labeling and
packaging design for the Products and Devices comply with the Act and
indicate that Haemacure is the seller of the Products and Devices and
that BPL is the manufacturer of the Products (as applicable); (d)
maintain complaint and Adverse Drug Experiences files on the Products
as is required by applicable law; and (e) comply with all FDA and
state laws and regulations relating to the distribution of the
Products.
3.10 Recall Responsibilities. Haemacure shall conduct product recalls,
withdrawals or quarantines as required by the FDA, or such voluntary
recalls initiated by Haemacure's reasonable belief that the Products
violate any provision of applicable law. BPL shall assist Haemacure
in all recalls, withdrawals or quarantines relating to the Product.
Haemacure and BPL shall share equally all expenses incurred in any
such recall, provided however, (a) if such action is taken due to
BPL's failure to manufacture the Products in accordance with the
Specifications or in breach of its warranties pursuant to Section
6.5, then BPL shall bear all such expenses, including the cost of
replacement Product, and (b) if such action is taken due to
Haemacure's failure to comply with the Act or the breach of its
responsibilities pursuant to this Agreement, then Haemacure shall
bear all such expenses, including the cost of replacement Product.
4. HAEMACURE SUPPLIED PRODUCTS.
4.1 Supply. Haemacure shall, from time to time, deliver to BPL the
quantity of sterilized Devices that are to be packaged with the
Products necessary for BPL to fill Haemacure's orders. Haemacure
shall, from time to time, deliver to BPL quantities of
Haemacure-Supplied Components adequate to ensure that BPL can
manufacture all of the Products requested in Haemacure orders placed
during the term of this Agreement.
4.2 Restricted Use. BPL shall store, maintain, package, process and/or
incorporate into the Products the Devices and Haemacure-Supplied
Components in accordance with the Specifications. BPL shall not use
these products for any purpose other than in connection with the
manufacture of Products for sale to Haemacure under this Agreement.
4.3 Limited Warranties. Haemacure agrees to consult with BPL in the
procurement of Haemacure-Supplied Components, and shall take such
steps as are necessary to provide BPL warranty and contractual
protections as are customary for contract manufacturing relationships
as contemplated by this Agreement, including the requirement that the
third party shall manufacture the Haemacure-Supplied Components in
accordance with the
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Specifications. Haemacure further agrees to extend to BPL the same
warranty protection it receives from the third-party supplier to the
extent that BPL is not otherwise afforded privity to the warranty. In
so far as Haemacure is unable to secure for BPL the benefit of a
warranty that such third party shall manufacture the
Haemacure-Supplied Components in accordance with the Specifications,
then Haemacure itself warrants that the Haemacure-Supplied Components
shall comply with the Specifications for such Components. SUBJECT TO
THE FOREGOING PROVISIONS OF THIS SECTION 4.3 AND TO THE PROVISIONS OF
SECTION 8.5, THE DEVICES AND HAEMACURE-SUPPLIED COMPONENTS ARE EACH
PROVIDED BY HAEMACURE AS IS AND HAEMACURE HEREBY DISCLAIMS ALL
WARRANTIES WITH RESPECT TO EACH, WHETHER EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY,
FITNESS FOR PARTICULAR PURPOSE AND NON-INFRINGEMENT.
4.4 Storage and Maintenance. BPL shall take all precautions necessary to
ensure that the Devices and Haemacure-Supplied Components remain in
usable condition and in the same condition in which they were
delivered to BPL, including, without limitation: (a) storing the
Devices and Haemacure-Supplied Components in adequate facilities and
under proper conditions; (b) keeping the Devices and
Haemacure-Supplied Components segregated from other products; and (c)
clearly labeling the Devices and Haemacure-Supplied Components to
reflect Haemacure's ownership therein.
4.5 Title. Title to the Devices and Haemacure-Supplied Components shall,
at all times, remain with Haemacure. BPL shall execute and deliver to
Haemacure, upon Haemacure's reasonable request, such public filings,
instruments and assurances as Haemacure deems necessary to reflect
the terms of this Agreement and Haemacure's ownership of the Devices
and Haemacure-Supplied Components.
4.6 Liens; Assignments; Claims. BPL shall keep the Devices and
Haemacure-Supplied Components free and clear of all liens,
encumbrances and security interests (other than those in favor of
Haemacure) and shall not (a) remove the Devices and
Haemacure-Supplied Components from the Facility, (b) remove or efface
any of Haemacure's trademarks on the Devices and Haemacure-Supplied
Components (if any), (c) do or permit anything to be done which might
prejudice Haemacure's title to the Devices and Haemacure-Supplied
Components, (d) transfer, deliver or otherwise provide the Devices
and Haemacure-Supplied Components to any other person or entity
without the prior written consent of Haemacure, (e) modify the
Haemacure-Supplied Components in any way (except to the extent
necessary to manufacture and process the Products, package the
Devices with the Products or as is otherwise necessary to maintain
the products in good condition) without Haemacure's prior written
consent, or (f) assign any rights to the Haemacure-Supplied
Components and Devices to any other person or entity without the
prior written consent of Haemacure. BPL shall comply with all laws,
ordinances and regulations applicable to the Haemacure-Supplied
Components and Devices and the custody thereof, and shall indemnify
and save Haemacure harmless from all claims, suits and liabilities of
every character whatsoever arising from the custody of the
Haemacure-Supplied Components and Devices.
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4.7 Risk of Loss. BPL shall bear all risk of loss or damage to the
Haemacure-Supplied Components and Devices from the time the products
are delivered to BPL until they are delivered in accordance with
Section 6.4.
4.8 Inspection. BPL shall grant Haemacure's representatives access to BPL
Facility at reasonable times to inspect the Haemacure-Supplied
Components and Devices.
4.9 Plasma Processing. BPL shall process the Plasma in accordance with
the Specifications in order to extract the cryoprecipitate necessary
to manufacture the Initial Product in accordance with the
Specifications. After extraction of the cryoprecipitate, BPL shall
segregate and store the cryo-poor plasma in accordance with
Specifications determined by the Technical Committee. BPL shall take
all precautions necessary to insure that the cryo-poor plasma remains
in usable condition, segregated from other products and clearly
labeled as to reflect Haemacure ownership of the cryo-poor plasma.
BPL shall store the cryo-poor plasma until such time as Haemacure
provides written direction as to its disposition, but such storage
shall not exceed a reasonable time period. Haemacure agrees to
negotiate with BPL for the purchase of all or components of the
cryo-poor plasma. Provided BPL is unable to properly store the
cryo-poor plasma, either (i) Haemacure will take immediate possession
of the cryo-poor plasma or (ii) BPL will process the cryo-poor plasma
pursuant to instruction of the Technical Committee and for a
processing fee to be mutually agreed upon by the Oversight Committee.
5. PRICING AND PAYMENT.
5.1 The price for BPL's services and Products manufactured shall be the
following:
(a) Pre-Manufacturing Costs. BPL shall charge Haemacure its actual
cost in providing pre-manufacturing services, work, equipment
and materials in accordance with Section 2. These costs shall
include a charge for the BPL employee time, supplies, equipment
and subcontracting work. BPL shall also be entitled to a service
charge of fifteen (15)% of the fees for the man-hours incurred
on the pre-manufacturing services (the "Service Fee"). Attached
as Exhibits F and K are projected budgets for the charges for
all services and tasks to be performed by BPL and subcontractors
for the pre-manufacturing obligations in relation to the Initial
Product. Haemacure shall be responsible for the actual man-hours
incurred by BPL, and the cost of the supplies, equipment and
subcontracting work completed, provided however, Haemacure shall
not be responsible for variances over the projected budget of
110% unless pre-approved in writing by Haemacure, provided
however, the final budget for the Frozen Formulation shall be
attached to this Agreement after approval by the Oversight
Committee. Upon reasonable request of Haemacure, BPL shall make
available to Haemacure or its representatives, all records kept
in the normal course of business that relate to the
pre-manufacturing costs.
(b) Manufactured Products. The purchase price to be paid by
Haemacure to BPL for the Initial Product and Frozen Formulation
delivered pursuant to Haemacure's orders shall be a base price
of $37.25 per m1 (the "Purchase Price"). If BPL completes a
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Technically Operational Facility prior to January 1, 2001, the
Purchase Price for the initial term shall be increased by 5%.
The Purchase Price will also be increased by 1% of $37.25 per ml
for each month earlier than October 31, 2001 (with a maximum of
five months) that BPL and Haemacure have filed the FDA license
application for the Initial Product. The Purchase Price shall be
finalized for the initial term by agreement of the parties
within two months prior to BPL's manufacture of the Product for
sale in the United States. The parties acknowledge and agree
that the Purchase Price determined for the initial term may be
influenced by the following factors:
(i) Whether Haemacure has provided BPL with the opportunity
to manufacture an Improved Product or Second Generation
Product;
(ii) If Haemacure's anticipated orders during the first three
(3) years of the term of this Agreement are greater than
420,000 ml per year of Product;
(iii) Whether Haemacure has granted to BPL distribution rights
for Hemaseel HMN or other products in the United Kingdom;
(iv) Whether Haemacure has requested BPL to manufacture
fibrinogen or thrombin in bulk pursuant to this
Agreement;
(v) Whether BPL's inspection and investigation of the Immuno
facility and process requires manufacturing modifications
or additional costs materially different than previously
believed pursuant to the review of technical information
provided at the execution of this agreement;
(vi) The cumulative annualized increase or decrease in the RPI
retail price index;
(vii) The fluctuation in the currency exchange between the
dollar and the pound;
(viii) The variation from the anticipated volume mix of packages
to be ordered during the first three years of the term of
this Agreement, from the previous believed product mix of
35%-5ml, 55%-2ml and 10%-1ml as a function of the number
of packaged products for delivery to Haemacure;
(ix) The impact on the cost to manufacture the Frozen
Formulation after review by BPL of the final
specifications of the Frozen Formulation;
(x) The impact on the cost to manufacture for BPL to obtain
and package the aprotinin; and
(xi) The variations in yield. The parties set the initial
price based on a yield of 6 ml/litre which should be
routinely achieved by BPL. For yields in excess of 6
ml/litre, the benefit accruing from the more efficient
use of the plasma shall be split 25/75 percent in
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favor of Haemacure. For yields below 6 ml/litre, BPL
would be responsible for 25% of the extra plasma cost per
ml up to the 6 ml/litre mark.
If the parties are unable to agree upon the Purchase Price pursuant to the
process herein described, the parties shall submit the determination of Purchase
Price to arbitration pursuant to Section 10.7 hereof to be decided in accordance
with this Section 5.1 and the factors identified herein. The Purchase Price will
be adjusted upward or downward on each anniversary date of the FDA Approval Date
to reflect changes in the RPI and currency exchange fluctuation the previous
year.
(c) Other Products. To the extent additional Products (including
bulk forms of such Product) are agreed to in accordance with
Section 2.7, the price for services and costs shall be computed
in accordance with Section 5.1(a) and (b) above.
5.2 Payment. BPL shall bill Haemacure on the fifteenth (15th) of each
month for all services performed, costs incurred and Products shipped
in the previous calendar month. Haemacure shall pay such invoices
within forty-five (45) days of their receipt. Interest at the rate of
one percent (1%) per month shall accrue and be paid by Haemacure on
all invoice amounts not paid within such forty-five (45) days.
6. TERMS AND CONDITIONS OF SALE.
6.1 Orders. BPL will manufacture the Products specified in each order
submitted by Haemacure, and will deliver the Products to the
location, in the quantities and by the date specified in such order.
The terms and conditions of this Agreement, as supplemented only by
the delivery dates and quantity of Products contained in a written
order, shall govern all sales of Products hereunder notwithstanding
any additional, different or conflicting terms set forth in an
acknowledgement or other forms of correspondence with BPL (all of
which additional, different or conflicting terms, if any, are hereby
expressly rejected). An order must be received by BPL at least 90
working days prior to the date that the Products must be shipped from
the Facility.
6.2 Cancellation. No order accepted by BPL may be cancelled or altered by
BPL except upon terms and conditions acceptable to Haemacure, as
evidenced by its written consent. Subject to Haemacure's compliance
with the provisions of Section 3.3., Haemacure may cancel any order
at any time, with or without cause, and Haemacure's liability for
such cancellation shall be limited to BPL's production and
out-of-pocket costs and expenses incurred for such cancelled order.
6.3 Product Forecasts. For planning purposes only, and not as a firm
order or promise to purchase, upon the date of Haemacure's submission
of the BLA, Haemacure shall provide BPL with an annual forecast of
the Initial Product that Haemacure anticipates that it will order
during the year following the FDA Approval Date. Following the FDA
Approval Date and for so long as this Agreement shall continue,
Haemacure shall give BPL a forecast of the orders of product that
Haemacure expects to place with BPL during each of the next six
months. The forecast for the next three months shall constitute firm
orders.
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Haemacure will provide product forecasts in accordance with this
Section 6.3 for Products other than the Initial Product.
6.4 Shipping. Unless otherwise agreed to in writing by the parties, all
Products manufactured by BPL shall be shipped to Haemacure ExWorks
(IncoTerms 1990) the Facility. All risk of loss and damage to the
Products while at the Facility will remain with BPL.
6.5 Product Warranties. Except for non-conformity or breach on account of
Haemacure-Supplied Components, BPL warrants that each of the Products
shipped to Haemacure under this Agreement, at the time of shipment,
shall: (a) conform to the Specifications, Quality Manual and SOPs and
shall not be "adulterated" or "misbranded" as those terms are defined
under the Federal Food, Drug and Cosmetic Act (the "Act"), as the Act
is in effect on the date of shipment, (b) not be an article which may
not, under the provisions of the Act, be introduced into interstate
commerce, and (c) not violate any state or local laws and regulations
actually known to BPL. All claims for a breach of warranty with
respect to any Products shall be made in accordance with Section
6.6(d). EXCEPT FOR THE FOREGOING EXPRESS WARRANTIES, BPL HEREBY
DISCLAIMS ALL WARRANTIES WITH RESPECT TO PRODUCTS, WHETHER EXPRESSED
OR IMPLIED, INCLUDING BUT NOT LIMITED TO, IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NON-INFRINGEMENT.
6.6 Claims Procedure. Haemacure shall inspect and analyze the Products
for conformity with the applicable order and the Specifications
within thirty (30) days after receipt by Haemacure of such shipment
of Products. Haemacure shall make all claims with respect to the
Products as follows:
(a) Claims for Damage During Transit. Any claims by Haemacure for
loss or damage to Products while in transit shall be made by
Haemacure to its carrier or agent and not to BPL.
(b) Claims for Delivery Error. Any claim that a shipment contains a
shortage of Products or other error in delivery must be made by
Haemacure to BPL in writing within thirty (30) days from the
date of receipt by Haemacure of such shipment of Products
together with a reasonably detailed description of the amount of
the shortage or other delivery error. Haemacure's failure to
make a claim in accordance with the foregoing sentence shall
constitute agreement by Haemacure that there was no error in
delivery. Provided that Haemacure makes a claim in accordance
with this Section 6.6(b) and proves that such shipment contains
a shortage of Products or other error in delivery, BPL, at
Haemacure's option, shall deliver to Haemacure to the
location(s) designated by Haemacure, at BPL's risk and cost and
expense, the amount of Products in shortage in such shipment, or
credit Haemacure the amount of such shortage.
(c) Claims for Non-Conforming Goods. In the event that Haemacure
claims that upon delivery any of the Products are
non-conforming, Haemacure may reject the same,
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provided that (i) within thirty (30) days after receipt by
Haemacure of such shipment of Products, Haemacure notifies BPL
of such rejection, in writing, together with a reasonably
detailed description of why the Products have been rejected
("Rejection Notice"), (ii) Haemacure returns to BPL the rejected
Products or shipment, subject to the terms and conditions
hereinafter provided, within thirty (30) days after Haemacure
sends the Rejection Notice, and (iii) none of the Products
(except for reasonable test and inspection quantities) has been
changed from its original condition. Haemacure's failure to make
a claim in accordance with the foregoing sentence shall
constitute unqualified acceptance of all shipments and Products.
Provided that the rejected Products have been rejected by
Haemacure in accordance with the terms of the preceding sentence
and are proved to have been non-conforming (i) BPL shall
reimburse Haemacure for all costs and expenses incurred by
Haemacure in shipping the rejected Products back to BPL, (ii)
the risk of loss with respect to the rejected Products shall
pass to BPL upon delivery of the rejected products by Haemacure
to the carrier/shipping agent designated by Haemacure for the
delivery of the reject products to BPL, (iii) BPL, at
Haemacure's option, will replace all rejected Products with
conforming Products or refund to Haemacure the price that
Haemacure paid for such rejected Products, and (iv) any such
replacement Products will be shipped, at BPL's risk and expense,
to the location(s) designated by Haemacure, provided however,
the non-conformity was not on account of the non-conformity of
the Haemacure-Supplied Components.
(d) Warranty Claims. In the event that Haemacure, in good faith,
claims that any of the Products are in breach of the warranties
set forth in Section 6.5 above, Haemacure may make such a claim
provided that: (i) such claim is made by Haemacure no later than
two (2) years after such Products are delivered to Haemacure;
(ii) such claim is made in writing and contains a reasonably
detailed description of the reason that the Products are in
breach of the warranties contained in Section 6.5; (iii)
Haemacure returns the Products in question to BPL no later than
one hundred twenty (120) days after Haemacure makes its claim to
BPL; and (iv) none of the Products in question (except for
reasonable use, test and/or inspection quantities) has been
changed from its original condition. The failure by Haemacure to
make a warranty claim in accordance with the terms of the
foregoing sentence shall constitute a waiver by Haemacure of all
claims for breach of warranty by Haemacure with respect to the
applicable Products. Provided that Haemacure makes its warranty
claim in accordance with the terms of this Section 6.6(d) and
the Products are proved to be in breach the warranties provided
in Section 6.5: (1) BPL shall reimburse Haemacure for all costs
and expenses incurred by Haemacure in shipping the Products back
to BPL, (2) the risk of loss with respect to the Products shall
pass to BPL upon delivery of the Products by Haemacure to the
carrier/shipping agent designated by Haemacure to ship the
Products back to BPL, (3) BPL, at Haemacure's option, will
replace all Products with conforming Products or refund to
Haemacure the price that Haemacure paid for such Products, at no
cost to Haemacure, and (4) such replacement Products will be
shipped, at BPL's risk and expense, to the location(s)
designated by Haemacure. Provided that Haemacure makes a
warranty claim in accordance with the terms of this Section
6.6(d), Haemacure shall make available to BPL all records and
documents related to the custody of such products by Haemacure
or its customers.
(e) Resolution of Disputes. In the event that the parties dispute a
warranty claim, the parties agree to select an independent
expert in the field involving the specific
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dispute, whose decision shall be final and binding. If the
parties are unable to agree upon the identity of the independent
expert or the procedures for resolution, the dispute shall be
submitted to arbitration in accordance with Section 10.7 hereof.
(f) Haemacure-Supplied Components. Haemacure agrees to include
claims procedures in contracts with third-party suppliers of
Haemacure Supplied Components similar to the procedures
contained in this Section 6 and agrees that this Section 6.6
shall apply mutatis mutandis to any claim by BPL that Haemacure
Supplied Components do not comply with warranty.
6.7 Insurance. Haemacure acknowledges that BPL does not customarily
maintain product liability insurance or other insurance to protect
against any hazards that may be associated with BPL's manufacture of
the Product. Haemacure shall maintain insurance against product
liability and any other hazards as are customarily covered by
casualty and general liability insurers for the manufacture and
distribution of Products from the date of the first sale of Product.
The level of such insurance shall be twenty million US dollars
($20,000,000) unless BPL shall give notice requiring an increase in
the level of coverage (not to exceed a total of seventy million U.S.
dollars ($70,000,000)) and shall pay one half of the increase in the
amount of premium required for such purpose. Haemacure agrees to
consult with BPL regarding the procurement of such additional
insurance, shall obtain a minimum of three competitive quotes for the
insurance, and shall promptly effect the procurement of such
insurance upon BPL's request. To the extent that either party does
maintain such insurance protecting against all hazards, such party
shall name the other party as an additional insured under such
policies and shall produce on demand evidence of the payment of the
current premium therefor.
7. INDEMNIFICATION.
7.1 BPL Indemnification. BPL agrees to indemnify Haemacure and defend and
hold it harmless from any liability, loss, expense, cost, claim or
judgment (including reasonable attorneys' fees) arising directly out
of (a) any claim by a third party for property damage, personal
injury or death which is alleged to have been caused by BPL's failure
to manufacture the Product or package any Device in accordance with
the Act or FDA approved specifications or (b) any claim by a third
party resulting from BPL's breach of this Agreement.
7.2 Haemacure Indemnification. Haemacure agrees to indemnify BPL and
defend and hold it harmless from any liability, loss, expense, cost,
claim or judgment (including reasonable attorneys' fees) arising
directly out of (a) any claim by a third party for property damage,
personal injury or death which is alleged to have been caused by
Haemacure's action or inaction after the Product and Device is
delivered to Haemacure by BPL, (b) any claim by a third party
resulting from Haemacure's breach of this Agreement, or (c) any
breach of third party intellectual property rights.
7.3 Binding. The foregoing indemnity obligations shall be binding upon
and shall inure to the benefit of BPL and Haemacure and their
respective affiliates, successors and assigns.
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7.4 Notice. Upon obtaining knowledge of the institution of any action,
proceeding, or other event which could give rise to a claim for
indemnity hereunder, the party seeking indemnification shall promptly
notify the other party thereof. Failure of any indemnified party to
promptly give such notice shall not relieve the indemnifying party of
its obligation to indemnify under this Section 7, but as a result of
any such failure, the indemnifying party shall not be liable to the
indemnified party for the amount of actual damages caused by such
failure to promptly notify. If such claim or demand relates to a
claim or demand asserted by a third party, the indemnifying party
shall have the right at its expense to employ counsel to defend such
claim or demand and the indemnified party shall have the right, but
not the obligation, to participate in the defense of any such claim
or demand at its own expense. So long as the indemnifying party is
defending such claim or demand in good faith, the indemnified party
will not settle such claim or demand without the indemnifying party's
consent. The indemnified party shall make available to the
indemnifying party all records and other materials reasonably
required by it in contesting a claim or demand asserted by a third
party against the indemnified party and shall cooperate in the
defense thereof.
7.5 Cap. Apart from the indemnity given by Haemacure in respect of the
infringement of third party intellectual property rights and referred
to in Section 7.2(c), which shall be without limitation, an
indemnifying party's aggregate indemnification obligations under this
Section 7 in any year shall not exceed $70,000,000 or the market
capitalization of Haemacure whichever is the lower. The value of the
market capitalization of Haemacure shall be determined by a mutually
agreed upon internationally recognized accounting firm as determined
on January 1 of the year such cap is at issue. A year for the
purposes of this Section 7.5 shall be the period of twelve months
commencing on the first date of sale of Products or the anniversary
thereof.
8. LICENSE; CONFIDENTIALITY; AND REPRESENTATIONS.
8.1 Definitions. For purposes of this Agreement, the following
definitions shall apply:
(a) The term "Confidential Information" means all of the currently
(as of the date of this Agreement) existing and hereafter
developed intellectual property (including without limitation,
patents, technology, know-how, inventions, trademarks,
tradenames, graphics, logos, designs and copyrights), recipes,
processes, technology, samples, models, sketches, drawings,
specifications, data, data sheets, sales and technical
bulletins, service manuals, customer lists, strategic and
tactical plans, project details, market analyses, sales
projections, methods and techniques, financial reports and data
(including cost and pricing) and any other business information,
all information regarding the regulatory approval of the
Products and/or Devices and any labeling packaging therefor or
improvements thereto, and any other information, whether or not
prepared, compiled, developed or created by BPL or Haemacure,
whether or not reduced to writing and whether or not patentable
or susceptible to any other form of legal protection, relating
to the design, manufacture, packaging, sterilization, labeling,
sale, pricing, distribution of Products or Devices specifically
or to the business of Haemacure or BPL generally.
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(b) The term "BPL Confidential Information" means any Confidential
Information which BPL can demonstrate by competent documentary
evidence (i) was prepared, compiled, developed or created by BPL
prior to the date of this Agreement relating to fibrin sealant
technology; (ii) relates to its own fibrin sealant project
developed independently of this project; or which relates to its
business or products not the subject of this Agreement.
(c) The term "Haemacure Confidential Information" means all
Confidential Information relating to the subject matter of this
Agreement other than BPL Confidential Information.
(d) The term "Resultant Technology" means and includes all
improvements, enhancements and modifications to the Products,
and any and all technical developments, know-how, methods,
techniques, systems, drawings, designs, plans, specifications,
software, documentation, data and other information that is
conceived, created, first fixed in a tangible medium, first
made, first used or first reduced to practice during the term of
this Agreement or in connection with the services, tasks or
endeavors which BPL has been engaged by Haemacure to undertake
on its behalf pursuant to this Agreement.
8.2 Technical Information License to BPL. Haemacure hereby grants to BPL,
for the term of this Agreement only, a non-exclusive, royalty-free,
right and license (with no right to sub-license), to use Haemacure
Confidential Information (including the patents listed on Exhibit J
attached hereto), but only to the extent necessary for BPL to perform
its obligations under this Agreement. Pursuant to the foregoing
license, BPL may, among other things, manufacture the Products and
affix Haemacure's trademarks on any such Products, but BPL shall not
remove or deface any of Haemacure's trademarks. BPL hereby
acknowledges the high level of quality currently associated with
Haemacure's trademarks and agrees that it will use the foregoing
grant only in a manner consistent with maintaining the high level of
quality currently associated with Haemacure's trademarks. BPL hereby
agrees that its every use of Haemacure Confidential Information,
including all Haemacure patents, trademarks and copyrights shall
inure solely to the benefit of Haemacure and that BPL shall not at
any time acquire any rights to any Haemacure Confidential
Information. BPL agrees to cooperate with Haemacure, at Haemacure's
cost and expense, in any action deemed necessary or appropriate by
Haemacure to protect its rights in the Haemacure Confidential
Information. BPL recognizes the validity of the Haemacure
Confidential Information and any registrations thereof, and
acknowledges Haemacure as the owner of all right, title and interest
in and to the Haemacure Confidential Information and any
registrations thereof.
8.3 BPL Confidentiality. BPL hereby acknowledges that all of the
Haemacure Confidential Information and Resultant Technology is, as
between the parties to this Agreement, the sole and exclusive
property of Haemacure. BPL shall not use (except as provided in
Section 8.2 above) or disclose any of the Haemacure Confidential
Information or Resultant Technology (except to the Secretary of State
as required by law) and shall use the same degree of care as BPL uses
to protect its own confidential information of a like nature, but no
less than a reasonable degree of care, to prevent the unauthorized
use or disclosure of any Haemacure Confidential Information and
Resultant Technology. BPL shall restrict
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the number of people having access to the Haemacure Confidential
Information and Resultant Technology to only those of its employees,
agents and consultants involved in any business discussions related
to this Agreement or who may have any occasion to view, handle or
obtain any of the Haemacure Confidential Information and Resultant
Technology pursuant to the terms of this Agreement; and BPL shall
notify each such employee, agent and consultant of the terms of this
Section 8. The covenants contained in this Section 8 shall not apply
to any Haemacure Confidential Information and Resultant Technology
(except that only the covenant of non-disclosure contained in this
Section 8 applies to Haemacure Confidential Information and Resultant
Technology in (ii) below) which is (i) in the public domain or comes
into the public domain through no fault of BPL or otherwise becomes
known to BPL through no act or omission of BPL, (ii) required to be
disclosed by statute, regulation, discovery in connection with
litigation or other dispute resolution, or other legal or regulatory
proceedings, provided that Haemacure is notified of such requirement
and has an opportunity to challenge it, (iii) can be documented as
legally in BPL's possession prior to July 13, 1998; or (iv) can be
documented by BPL to have been developed by BPL independent of
Haemacure or this Agreement. Upon request by Haemacure and, in any
event, upon termination or expiration of this Agreement for any
reason, BPL will immediately return to Haemacure any and all written
or other tangible Haemacure Confidential Information or Resultant
Technology, including any copies, translations and conversions
thereof, then in its possession; provided, however, BPL may retain
one copy of the same for record-keeping purposes only in the event of
a dispute concerning the same.
8.4 Haemacure Confidentiality. Haemacure hereby acknowledges that all of
BPL Confidential Information is, as between the parties to this
Agreement, the sole and exclusive property of BPL. Haemacure hereby
agrees not to use or disclose any of BPL Confidential Information
except to the extent necessary to perform its obligations under this
Agreement and shall use the same degree of care as Haemacure uses to
protect its own confidential information of a like nature, but no
less than a reasonable degree of care, to prevent the unauthorized
use or disclosure of any BPL Confidential Information. Haemacure
shall restrict the number of people having access to BPL Confidential
Information to only those of its employees, agents and consultants
involved in any business discussions related to this Agreement or who
may have any occasion to view, handle or obtain any of BPL
Confidential Information pursuant to the terms of this Agreement; and
shall notify each such employee, agent and consultant of the terms of
this Section 8. The covenants contained in this Section 8 shall not
apply to any BPL Confidential Information (except that only the
covenant of non-disclosure contained in this Section 8 applies to BPL
Confidential Information in (ii) below) which is (i) in the public
domain or comes into the public domain through no fault of Haemacure
or otherwise becomes known to Haemacure through no act or omission of
Haemacure, (ii) required to be disclosed by statute, regulation,
discovery in connection with litigation or other dispute resolution,
or other legal or regulatory proceedings, provided that BPL is
notified of such requirement and has an opportunity to challenge it,
(iii) can be documented as legally in Haemacure's possession prior to
July 13, 1998, or (iv) can be documented by Haemacure to have been
developed by Haemacure independent of BPL. Upon request by BPL and,
in any event, upon termination or expiration of this Agreement for
any reason, Haemacure will immediately return to BPL any and all
written or other tangible BPL Confidential Information, including any
copies, translations and conversions thereof, then in
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its possession; provided, however, Haemacure may retain one copy of
the same for record-keeping purposes only in the event of a dispute
concerning the same.
8.5 Haemacure Representations and Warranties. Haemacure warrants that (i)
neither the Product as currently proposed to be manufactured by BPL
nor the process for manufacturing the Product infringe any patent
owned by a third party in the United States of UK; (ii) it is the
owner or licensee of the Haemacure Confidential Information; (iii) it
has the right to license said Haemacure Confidential Information in
the manner set forth in this Agreement; and (iv) it has not received
and does not reasonably expect to receive any notice of litigation
from any third party that the Product, as currently proposed to be
made by BPL, incorporates know-how or trade secrets wrongfully
obtained directly or indirectly from said third party. Haemacure
further warrants that the Specifications are free from defects in
design.
9. TERM AND TERMINATION.
9.1 Term. Unless earlier terminated as provided in Section 9.2 below or
by mutual written consent, this Agreement shall continue in full
force for the Initial Term. Thereafter, this Agreement shall
automatically renew for successive three (3) year renewal terms,
unless either party gives notice of nonrenewal to the other not less
than one hundred twenty (120) days prior to the expiration of the
initial or the then-current renewal term. The continuation of
correspondence, meetings or other dealings following the expiration
or termination of this Agreement shall not be considered an extension
or renewal of this Agreement. To the extent that BPL accepts an order
from Haemacure following the termination or expiration of this
Agreement, the same shall be governed by terms identical to the terms
of this Agreement but such acceptance shall not be considered an
extension or renewal of the term of this Agreement.
9.2 Termination. Either party may terminate this Agreement at any time
prior to the expiration of the initial or the then-current renewal as
provided in Section 9.1 above, as follows:
(a) by either party, effective immediately, in the event that the
other party fails to perform any of its obligations under this
Agreement and fails to remedy such failure within sixty (60)
days after receiving written demand to remedy such failure;
(b) by either party upon written notice to the other, effective
immediately, in the event the other party shall become the
subject (voluntarily or involuntarily) of any proceeding
relating to bankruptcy or insolvency, or make an assignment or
other arrangement for the benefit of its creditors, or be
dissolved or liquidated (except as a consequence of a merger,
consolidation or other corporate reorganization not involving
the insolvency of such dissolved or liquidated party);
(c) by either party, effective immediately, if any force majeure
described in Section 10.3 of this Agreement remains in effect so
as to delay or prohibit the performance of any obligation under
this Agreement by the other party for a period of ninety (90)
days or longer;
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(d) by either party, effective immediately, if any law, regulation,
order or directive from the Secretary of State for Health of the
United Kingdom or other entity prohibits BPL from performing its
obligations under this Agreement;
(e) by either party, effective immediately, in the event that the
License Agreement is terminated for any reason by the FTC;
(f) by either party, upon three (3) months written notice, if the
parties shall have not received FDA approval for the Products
within five (5) years of the date of this Agreement;
(g) by either party, effective immediately, if Haemacure loses its
license for the initial product or the Facility is shut down by
the FDA for more than ninety (90) consecutive days; or
(h) by Haemacure for a period beginning upon execution of this
Agreement and ending two (2) years following the FDA Approval
Date, upon sixty (60) days written notice, for any reason.
9.3 Accrued Rights. Termination of this Agreement shall not affect the
respective rights and obligations of the parties accrued during the
term of this Agreement.
9.4 Return of Confidential Information; Ownership of Equipment. Upon
termination or expiration of this Agreement for any reason:
(a) BPL shall deliver to Haemacure all Haemacure Confidential
Information and Resultant Technology, any Devices not then
packaged with Products and any Haemacure-supplied components not
then incorporated into Products, then in the possession or under
the control of BPL, and if Haemacure should so request, all
other documents or objects furnished to BPL by Haemacure, and
all copies of any such documents, objects, Haemacure
Confidential Information or Resultant Technology in the
possession or under the control of BPL;
(b) Haemacure shall deliver to BPL all BPL Confidential Information
then in the possession or under the control of Haemacure, and if
BPL should so request, all other documents or objects furnished
to Haemacure by BPL, and all copies of any such documents,
objects or BPL Confidential Information in the possession or
under the control of Haemacure; and
(c) At either party's request, but at Haemacure's expense (including
repair of facility to an operating state), BPL shall deliver to
Haemacure the Equipment listed on Exhibits E and M and any other
equipment or supplies purchased by BPL pursuant to this
Agreement and paid for by Haemacure. To the extent Haemacure
refuses within 60 days to remove the Equipment or pay for such
removal, for any reason, title shall forthwith pass to BPL, who
may dispose of or utilize the equipment in its sole discretion.
9.5 Purchase of Termination Inventory. Upon termination or expiration of
this Agreement for any reason, Haemacure shall have the option, but
no obligation, to
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purchase from BPL, or credit BPL for, any Products in BPL's
possession at the time of termination or expiration of this Agreement
that were not manufactured pursuant to an Order (the "Termination
Inventory"). Haemacure may, at its sole option, no later than thirty
(30) days of the effective date of termination or expiration of this
Agreement, purchase from BPL the Termination Inventory, in whole or
part.
9.6 Orders Placed Prior to Expiration or Termination. Following
termination or expiration of this Agreement for any reason other than
default or insolvency on behalf of Haemacure, BPL shall fill all
Orders submitted by Haemacure during the term of this Agreement
regardless of whether any of the Products in such Orders are to be
delivered after the expiration or termination of this Agreement.
9.7 Haemacure Termination Liability. If this Agreement is terminated by
either party for any reason, BPL shall immediately (a) stop work as
specified in the notice; (b) place no further subcontracts or orders
for materials, tooling, equipment, etc.; (c) cancel all subcontracts
and orders to the extent that they relate to work pursuant to this
Agreement; (d) with the approval of Haemacure, settle all outstanding
liabilities arising from termination of subcontracts or orders; and
(e) take such other action as may be necessary or appropriate to
minimize and mitigate the costs of and consequences of termination
and to protect and to preserve the property owned by Haemacure
pursuant to this Agreement.
Within ninety (90) days of the notice of termination, BPL shall submit a
termination settlement proposal to Haemacure computing any amounts owed pursuant
to Section 5 for the work completed previous to the termination as specified in
Exhibit F.
In addition, if this Agreement is terminated by Haemacure pursuant to
Section 9.2(h) or by BPL pursuant to Section 9.2(a) for Haemacure's willful,
knowing and continuing breach of this Agreement, BPL shall be entitled to be
paid as liquidated damages ("Liquidated Damages") any unpaid estimated Service
Fees for the pre-manufacturing services of BPL and either, if such Termination
occurs within twelve (12) months of the date of this Agreement, thirty percent
(30%) or otherwise fifty percent (50%), of any unpurchased minimum purchases
pursuant to Section 3.3 whether or not the FDA license has been granted.
In determining the Liquidated Damages under this Section 9.7, the price to
be paid in determining the minimum purchases shall be $37.25 per ml, and the
average yield of 6 x 1 ml dose equivalence (75-115 mg fibrinogen) per liter of
plasma shall be used.
Such Liquidated Damages are the parties' best estimate of the loss and
damage which would be suffered by BPL in the event of such Termination. Any
payment of Liquidated Damages shall be the sole and exclusive recovery for such
loss and damage.
If Haemacure disputes the calculation of the amount of the settlement
proposal, the parties shall submit the same to arbitration pursuant to Section
10.7. Upon payment of such amount and (for the avoidance of doubt) in relation
only to Haemacure's obligations under Sections 3.1 (Supply of Products), 3.3
(Minimum Purchase), 5.1 (Pre-manufacturing Costs and Manufactured Products), 5.2
(Payment) and 6.3 (Product Forecasts) BPL shall execute full release of
Haemacure and Haemacure shall not be liable for any other
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compensation, reimbursement or damages for any reason, including loss of
prospective compensation, good will or otherwise.
9.8 BPL Termination Liability. If this Agreement is terminated by
Haemacure pursuant to Section 2.4, except to the extent BPL's failure
to materially comply with the schedule due to matters solely within
its control is willful and wanton, BPL's sole and exclusive liability
to Haemacure shall be reimbursement and payment to Haemacure of: (a)
any Service Fee paid to BPL pursuant to Section 5.1; (b) the cost and
expense incurred by Haemacure for the purchase of equipment, material
or supplies pursuant to this Agreement; and (c) Haemacure's
reasonable out-of-pocket expenses incurred in connection with this
Agreement.
10. MISCELLANEOUS PROVISIONS.
10.1 Entire Agreement. This Agreement, including any Exhibits hereto,
represents the entire agreement between the parties on the subject
matter hereof and supersedes all prior discussions, agreements and
understandings of every kind and nature between them, including the
January 15, 1999 Manufacturing Agreement and the letter amendments
thereto. No modification of this Agreement will be effective unless
in writing and signed by both parties.
10.2 Notices. All notices under this Agreement shall be in English and
shall be in writing and given by registered airmail, cable or
facsimile addressed to the parties at the addresses in this Section
10.2, or to such other address of which either party may advise the
other in writing. Notices will be deemed given when sent:
If to BPL: BPL
Dagger Lane, Elstree, Herts
WD 6 3BX United Kingdom
Attention: C D Hadfield
Phone: 0181 258 2540
Facsimile: 0181 258 2604
with a copy to: BPL
Dagger Lane, Elstree, Herts
WD 6 3BX United Kingdom
Attention: R C D Walker
Phone: 0181 258 2252
Facsimile: 0181 258 2603
If to Haemacure: Haemacure Corporation
2 North Tamiami Trail, Suite 802
Sarasota, Florida 34231
Attention: Marc R. Paquin
Phone: 941-361-2166
Facsimile: 941-365-1051
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with a copy to: Haemacure Corporation
2001 University, Suite 430
Montreal, (Quebec) H3A 2A6
Canada
Attention: Gilles Lemieux
Phone: 514-282-3350
Facsimile: 514-282-3358
with a copy to: Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202-5367
Attention: James F. Stern
Phone: 414-271-2400
Facsimile: 414-297-4900
10.3 Force Majeure. Neither party shall be in default hereunder by reason
of any failure or delay in the performance of any obligation under
this Agreement where such failure or delay arises out of any cause
beyond the reasonable control and without the fault or negligence of
such party. Such causes shall include, without limitation, storms,
floods, other acts of nature, fires, explosions, riots, war or civil
disturbance, strikes or other labor unrests, embargoes and other
governmental actions or regulations which would prohibit either party
from ordering or furnishing Products or from performing any other
aspects of the obligations hereunder, delays in transportation, and
liability to obtain necessary labor, supplies or manufacturing
facilities.
10.4 Severability. In the event any one or more of the provisions
contained in this Agreement are deemed illegal or unenforceable, such
provision (a) shall be construed in a manner to enable it to be
enforced to the extent permitted by applicable law, and (b) shall not
affect the validity and enforceability of any legal and enforceable
provision of this Agreement.
10.5 Nonassignment. This Agreement shall be binding upon, inure to the
benefit of, and shall be enforceable by, the successors, heirs,
beneficiaries, personal representatives and assigns of each party. In
the event that the National Health Service shall divest itself of the
whole or a substantial part of the undertaking of BPL, including the
Facility, by reason of the sale or transfer of the whole or such part
of BPL into private ownership or into a public/private partnership,
this Agreement and the rights and obligations created by it may be
assigned by BPL to the party acquiring the whole or such part of BPL.
Otherwise this Agreement and the rights or obligations created by
this Agreement, may not be assigned, sold, delegated or otherwise
transferred, by either party without the prior written consent of the
other party, which consent shall not be unreasonably withheld, unless
by operation of law. Any attempt by a party to assign, sell, delegate
or otherwise transfer this Agreement or the rights or obligations
created by this Agreement in contravention of this Section shall be
deemed void and without effect.
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10.6 Applicable Law. THIS AGREEMENT SHALL BE CONSTRUED UNDER AND GOVERNED
BY THE INTERNAL LAWS OF ENGLAND AND WALES WITHOUT REGARD TO CHOICE OF
LAW RULES. THE RIGHTS AND OBLIGATIONS OF THE PARTIES IN CONNECTION
WITH THIS AGREEMENT AND ANY PURCHASE OF THE PRODUCTS SHALL NOT BE
GOVERNED BY THE PROVISIONS OF THE 1980 U.N. CONVENTION ON CONTRACTS
FOR THE INTERNATIONAL SALE OF GOODS.
10.7 Dispute Resolution. Any and all disputes of whatever nature, arising
between the parties of this Agreement or the underlying business
relationship, including termination thereof and statutory claims, and
which are not resolved between the parties themselves, shall be
submitted to binding arbitration to be conducted in English, in New
York, New York before a single arbitrator in accordance with the
rules of the International Chamber of Commerce in effect as of the
date of this Agreement. Judgment upon the award of the arbitrator may
be entered in any court having jurisdiction thereof.
10.8 Waiver. Each party agrees that the failure by the other party at any
time to require performance of any of the provisions herein shall not
operate as a waiver of the right of that party to request strict
performance of the same or like provisions, or any other provisions
hereof, at a later time.
10.9 Language. The English language version of this Agreement shall govern
and control any translations of the Agreement into any other
language.
10.10 Captions. Captions of sections of this Agreement are included for
reference only, shall not be construed as part of this Agreement and
shall not be used to define, limit, extend or interpret the terms
hereof.
10.11 Currency. Unless otherwise agreed by the parties in writing, all
payments required to be made under this Agreement shall be made in
United States Dollars.
10.12 Cumulative Remedies. Each and every right and remedy hereunder is
cumulative with each and every other right and remedy herein or in
any other agreement between the parties or under applicable law.
10.13 Receipt. Each party hereby acknowledges receipt of a signed copy of
this Agreement.
10.14 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same document.
10.15 No Partnership, etc. Nothing contained in this Agreement shall create
or shall be construed as creating a partnership, a joint venture,
agency or employment relationship between the parties. The parties
agree to perform in accordance with this Agreement only as
independent contractors. Neither party has the right or authority to
assume or create any obligations or responsibilities, express or
implied, on behalf of the other party,
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and neither party may bind the other party in any manner or thing
whatsoever. Neither party shall be liable, except as expressly
provided otherwise in this Agreement, for any expenses, liabilities
or other obligations incurred by the other.
10.16 Year 2000 Compliance. BPL hereby represents and warrants that all of
the equipment utilized by BPL in connection with its obligations
under this Agreement, including but not limited to computer software,
databases, hardware, controls and peripherals, will (i) perform in
all material respects in accordance with their specification and
documentation regardless of which century or century dates are
encountered in the use of such equipment or software; (ii) accurately
and correctly manage and manipulate data in accordance with its
intended use involving all dates, whether single century or
multi-century, regardless of the format in which such dates are
expressed; and (iii) not require any repair, rewrite, conversion or
other adaptation because of or due in any way to the use of century
dates.
10.17 Use of Haemacure Equipment. All equipment procured by BPL that is
paid for by Haemacure, and the equipment on Exhibits E and M (or
other equipment purchased by Haemacure and provided to BPL), shall be
used for the exclusive benefit of manufacturing the Products, and BPL
agrees not to utilize such equipment for any other purpose, provided
however Haemacure agrees to reasonably consent to the use of such
equipment for non-Products so long as Haemacure is reasonably
compensated for the use and such use is consistent with Haemacure's
timing needs and the specifications for its Products.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first written above.
BIO PRODUCTS LABORATORY HAEMACURE CORPORATION
("BPL") ("Haemacure")
By: /s/ Richard C.D. Walker By: /s/ Marc R. Paquin
--------------------------------- ---------------------------------
Richard C.D. Walker Marc R. Paquin
Chief Executive Officer President and Chief Executive
Officer
Attest: Attest:
----------------------------- -----------------------------
Title: Title:
----------------------------- -----------------------------
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