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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K/A
AMENDMENT NO. 1 TO
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
May 17, 1999
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Date of Report (Date of earliest event reported)
BioSphere Medical, Inc.
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(Exact name of Registrant as Specified in Charter)
Delaware 0-23678 04-3216867
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
111 Locke Drive, Marlborough, MA 01752
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (508) 357-7500
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ITEM 2: ACQUISITION OR DISPOSITION OF ASSETS
On May 17, 1999, BioSphere Medical, Inc. (f/k/a BioSepra Inc.)
("BioSphere") announced that it had closed a transaction for the sale of certain
assets to Life Technologies, Inc., a Delaware corporation ("Life Technologies"),
pursuant to an Asset Purchase Agreement between Life Technologies and BioSphere,
dated April 14, 1999 (the "Sale"). BioSphere sold to Life Technologies
substantially all of BioSphere's assets and business (including any business
conducted through subsidiaries) other than the assets and business of BioSphere
and its subsidiaries relating to intracorporeal and "on-line" extracorporeal
therapies or any autologous treatment and Life Technologies assumed certain
liabilities of BioSphere.
ITEM 7: FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(b) Pro Forma Financial Information
The following unaudited pro forma consolidated financial
statements are attached as Exhibit 99.3 to this Report and
incorporated herein by reference:
(i) Unaudited pro forma consolidated balance sheet as of
March 31, 1999
(ii) Unaudited pro forma consolidated statement of
operations for the three months ended March 31, 1999
(iii) Unaudited pro forma consolidated statement of
operations for the year ended December 31, 1998
(c) Exhibits
See Exhibit Index attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
July 31, 1999 BIOSPHERE MEDICAL, INC.
/S/ Philip V. Holberton
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Philip V. Holberton
Chief Financial Officer
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EXHIBIT INDEX
NUMBER DESCRIPTION
(2.1)* Asset Purchase Agreement between BioSphere Medical, Inc.
(f/k/a BioSepra Inc.), a Delaware corporation, and Life
Technologies, Inc., a Delaware corporation, dated May 17,
1999.
(2.2)** Cross License Agreement between BioSphere Medical, Inc.
(f/k/a BioSepra Inc.), a Delaware corporation, and Life
Technologies, Inc., a Delaware corporation, dated May 17,
1999.
(2.3) Supply Agreement between BioSphere Medical, Inc. (f/k/a
BioSepra Inc.), a Delaware corporation, and BioSepra S.A., a
French societe anonyme, and a wholly owned subsidiary of
Life Technologies, Inc., a Delaware corporation, dated May
17, 1999.
(99.1)*** Press release dated May 17, 1999
(99.2)*** Press release dated May 18, 1999
(99.3) (i) Unaudited consolidated pro forma balance sheet as of
March 31, 1999
(ii) Unaudited consolidated statement of operations for
the three months ended March 31, 1999
(iii) Unaudited consolidated statement of operations for
the year ended December 31, 1998
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* Incorporated by reference to the Current Report on Form 8K filed with the
Securities and Exchange Commission on April 29, 1999.
** Confidential treatment requested as to certain portions
*** Previously filed
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Exhibit 2.2
CROSS-LICENSE AGREEMENT
This CROSS-LICENSE AGREEMENT, dated as of May 17, 1999 (the "Cross
License Agreement"), is by and among BioSepra Inc., a Delaware corporation
("BioSepra") and its successors or assigns, Life Technologies, Inc., a Delaware
corporation ("LTI") and its successors or assigns, and LTI's affiliate BioSepra
S.A. ("BSA") and its successors and assigns. Each of BioSepra, BSA and LTI is
sometimes referred to herein individually as a "Party" and collectively as the
"Parties."
R E C I T A L S :
A. BioSepra and LTI have entered into an Asset Purchase Agreement
dated April 14, 1999, in connection with which certain assets of BioSepra have
been transferred to LTI (the "Asset Transfer"), including without limitation,
certain patents, patent applications, trade secrets and know-how set forth on
SCHEDULE 1 attached hereto (as further defined in SCHEDULE A, "LTI Technology").
B. As part of the Asset Transfer, LTI has acquired 100% of the
capital stock of BSA, formerly a subsidiary of BioSepra.
C. LTI and BSA have agreed to license, or sublicense, as the case
may be, the LTI Technology exclusively to BioSepra solely for use in the
BioSepra Field and BioSepra desires to obtain such licenses, or sublicenses, as
the case may be, from LTI and BSA.
D. In the future BioSepra may, based on its use or development of
the LTI Technology, develop certain technology, inventions, improvements,
derivatives, processes or know-how, that are or may be useful in the business of
LTI and/or BSA, and, in each such case, BioSepra is willing to grant to each of
LTI and BSA a license to use such technology, inventions, improvements,
derivatives, processes or know-how for such purposes.
E. In the future LTI and/or BSA may develop certain technology,
inventions, improvements, derivatives, processes or know-how, that are or may be
useful in the BioSepra Field, and, in each such case, each of LTI and BSA is
willing to grant to BioSepra a license or sublicense to use such technology,
inventions, improvements, derivatives, processes or know-how for such purposes.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each of LTI, BSA and BioSepra
hereby agree as follows:
1. DEFINITIONS. If not otherwise defined in this Cross License
Agreement, capitalized terms have the respective meanings set forth in SCHEDULE
A attached hereto and incorporated herein by reference.
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2. LICENSES.
2.1. GRANT OF LICENSE TO BIOSEPRA. Subject to the terms and
conditions of this Cross License Agreement, LTI and/or BSA hereby grant to
BioSepra a perpetual, worldwide, royalty-free and exclusive right and license,
including the right to grant sublicenses, to the LTI Technology, and all LTI
Improvements for the development, manufacture, use or sale of any products or
services within the BioSepra Field. Notwithstanding the foregoing, the right to
manufacture products employing either LTI Technology or LTI Improvements is
subject to the obligations of BioSepra under the Supply Agreement between
BioSepra and BSA of even date herewith.
2.2. THIRD-PARTY LICENSES. To the extent that any LTI
Technology or LTI Improvements licensed to BioSepra hereunder consist of rights
of LTI or BSA under an agreement or license with or from a third party, any
license granted to BioSepra hereunder shall be (a) limited to the rights which
LTI or BSA, as the case may be, has a right to grant under such agreement or
license and (b) otherwise subject to any obligations assumed by LTI or BSA, as
the case may be, in consideration of the grant or assignment of such right or
license to LTI or BSA which is sublicensed to BioSepra hereunder.
2.3. GRANT OF LICENSES TO LTI AND BSA. Subject to the terms
and conditions of this Cross License Agreement, BioSepra hereby grants to each
of LTI and BSA a perpetual, worldwide, royalty-free and exclusive right and
license, including the right to grant sublicenses, to all BioSepra Improvements
for the development, manufacture, use or sale of any products or services within
the LTI Field.
2.4. TERMINATION. The provisions of this Section 2, in so far
as they relate to Improvements, shall terminate on the fifth anniversary of the
date first written above; provided, however, that any licenses or sublicenses
granted under this Section 2 shall survive such termination to the extent that
they confer rights in and to LTI Technology or any Improvements existing on such
date of termination.
3. PATENT RIGHTS AND DISCLOSURE.
3.1. PATENT RIGHTS.
a. LTI or BSA, as the case may be, shall have the
exclusive right, at its expense, to prepare, prosecute and maintain patent
applications, and to maintain and enforce patents issued thereon with respect to
the LTI Technology and the LTI Improvements. BioSepra agrees that it will, upon
the written request of either LTI or BSA, provide reasonable assistance and
cooperation to facilitate such filing, preparation and maintenance.
b. BioSepra shall have the exclusive right, at its
expense, to prepare, prosecute and maintain patent applications and to maintain
and enforce patents issued thereon with respect to the BioSepra Improvements.
Each of LTI and BSA agree that it shall, upon the written request of BioSepra,
provide reasonable assistance and cooperation to BioSepra to facilitate such
filing, prosecution and maintenance.
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c. Subject to Sections d and e of this Section 3.1,
no Party hereto shall have any obligation to prepare, prosecute or maintain any
patent or patent application. Each Party hereto shall have the right to
determine that any Improvement owned by such Party shall be protected as a trade
secret, or shall be published, and LTI shall have the right to determine that
any component of the LTI Technology which constitutes Confidential Information
shall be protected as a trade secret, or be published. Each of LTI and BSA
hereby agree that it shall timely disclose any LTI Improvements developed by
such Party to BioSepra. BioSepra hereby agrees that it shall timely disclose any
BioSepra Improvements to LTI and BSA.
d. In the event that LTI or BSA elects not to
continue to prosecute, or maintain any patent application which has been
published, or to maintain or enforce any patent with respect to the LTI
Technology or to any LTI Improvements, such Party shall give written notice to
BioSepra which shall identify the patent or patent application not to be
prosecuted, maintained or enforced.. Following receipt of such notice, BioSepra
shall have the right to prosecute, obtain, maintain and enforce the patent
application(s) and patent(s) identified in the notice, at its sole expense, and
BioSepra shall thereafter be deemed to be the sole owner of any such application
or patent, and any such patent or patent application shall be assigned to
BioSepra. Upon such assignment, BioSepra shall grant a worldwide, irrevocable,
royalty free license, with the right to grant sub-licenses co-exclusively to LTI
and BSA for use in the LTI Field as a BioSepra Improvement hereunder.
e. In the event that BioSepra elects not to continue
to prosecute, or maintain any patent application which has been published, or to
maintain or enforce any patent with respect to the BioSepra Improvements,
BioSepra shall give written notice to LTI and BSA which shall identify the
patent or patent application not to be prosecuted, maintained or enforced.
Following receipt of such notice, LTI and/or BSA, as they shall agree, shall
have the right to prosecute, obtain, maintain and enforce the patent
application(s) and patent(s) identified in the notice, at its sole expense, and
shall thereafter be deemed to be the owner of any such application or patent,
and any such patent or patent application shall be assigned to either LTI or
BSA, as they shall agree. Each of LTI and BSA agree that upon any such
assignment it shall grant a worldwide, irrevocable, royalty free license, with
the right to grant sub-licenses, exclusively to BioSepra for use in the BioSepra
Field as an LTI Improvement hereunder.
f. With respect to filing of patent applications
claiming LTI Technology, LTI Improvements or BioSepra Improvements which the
Parties have agreed shall be prosecuted by LTI or BSA, LTI or BSA, as the case
may be, shall keep BioSepra regularly informed of the status of such Patent
Rights in accordance with this Section 3.1, and shall provide copies to BioSepra
of all non-privileged filings and correspondence with the patent offices,
administrative boards or courts which it sends or receives in connection with
filing, prosecution, maintenance and defense of such Patent Rights. With respect
to filing of patent applications claiming BioSepra Improvements, or LTI
Improvements which the Parties have agreed shall be prosecuted by BioSepra,
BioSepra shall keep LTI and BSA regularly informed of the status of such Patent
Rights in accordance with this Section 3.1, and shall provide copies to LTI and
BSA of all non-privileged filings and correspondence with the patent offices,
administrative boards or courts which it sends or receives in connection with
filing, prosecution,
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maintenance and defense of such Patent Rights. Each Party agrees to cause each
of its employees and agents to take all actions and to execute, acknowledge and
deliver all instruments or agreements reasonably requested by an other Party,
and necessary for the perfection, maintenance, enforcement or defense of that
other Party's rights as set forth herein.
3.2. CONFIDENTIAL INFORMATION.
Any Party receiving Confidential Information of another Party hereto shall
maintain the confidential and proprietary status of such Confidential
Information, keep such Confidential Information and each part thereof within its
possession or under its control sufficient to prevent any activity with respect
to such Confidential Information that is not specifically authorized by this
Cross License Agreement, use commercially reasonable efforts to prevent the
disclosure of any such Confidential Information to any other Person, and use
commercially reasonable efforts to ensure that all such Confidential Information
is used only for those purposes specifically authorized herein. Notwithstanding
the foregoing, Confidential Information of a Party hereto may be disclosed by
another Party hereto to any permitted assignee, permitted sublicensee or
permitted subcontractor of either BioSepra, BSA or LTI hereunder (if such
assignee, sublicense or subcontractor accepts and is held subject to
confidentiality obligations no less restrictive than those set forth in this
Section 3.2, provided that such assignee, sublicensee or subcontractor agrees to
not disclose Confidential Information of the initial disclosing Party to any
further party). The obligations set forth in this Section 3.2 shall survive for
a period of ten (10) years from the termination or expiration of this Cross
License Agreement. Without limiting the foregoing, each of BioSepra, BSA and LTI
shall take all reasonable efforts to ensure that each of its respective
employees and agents understands and complies with the provisions of this
Section 3.2 with respect to the Confidential Information of another Party
hereto.
Each of BioSepra, LTI and BSA shall be obligated under this Section 3.2 to
protect the Confidential Information of another Party with the same degree of
care that it uses to protect its own similar Confidential Information, but in
any event, to use not less than a reasonable degree of care.
3.3 ABANDONMENT. If a filing Party (for the purposes of this
Section 3.3 the "Transferor") decides to abandon or to allow to lapse any of its
Patent Rights which have earlier been published, the Transferor shall inform the
other Party (the "Transferee", which for the purposes of this Section 3.3 shall
be LTI if BioSepra is the Transferor, and shall be BioSepra if either BSA or LTI
is the Transferor) at least forty-five (45) days prior to the effective date of
such abandonment or lapse, and the Transferee shall be given the opportunity to
assume responsibility as the filing Party with respect to such Patent Right in
which such case the Patent Right shall become a Patent Right of the Transferee,
subject to the licenses granted to the Transferor hereunder. Upon transfer of a
Party's responsibility for prosecuting, maintaining and enforcing any of its
Patent Rights to the Transferee under the preceding sentence, the Transferor
shall promptly deliver to the Transferee all necessary files related to the
transferred Patent Rights, and all Technology related exclusively thereto, and
Transferor shall take all actions and execute all documents reasonably necessary
for the Transferee to assume the prosecution, maintenance and/or enforcement of
the transferred Patent Rights.
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3.4. PERMITTED DISCLOSURES. Notwithstanding the provisions of
Section 3.2 hereof, each of BioSepra, LTI and BSA may, to the extent necessary,
and subject to the assumption by the intended recipient of obligations of
confidentiality and non-use no less restrictive than those set forth in Section
3.2, disclose and use Confidential Information of another Party hereto,
consistent with the rights of such Party granted hereunder, where such
disclosure is (a) for the purpose of engaging in research and development,
conducting clinical testing and marketing programs, or securing institutional or
government approval to clinically test or market any product, (b) for the
purpose of sharing clinical trial results and data with third parties conducting
clinical trials, (c) for the purpose of securing patent protection for an
invention within the scope of the Improvements or (d) for the purpose of
complying with laws, statute, rules or court order. Notwithstanding the
foregoing, no Party hereto may disclose the Confidential Information of another
Party hereto to a third party, other than a government for approval or patenting
purposes, unless such third party agrees not to disclose such Confidential
Information to any further party. Except as provided herein, BioSepra shall not,
without prior written consent of LTI, which may be withheld at LTI's absolute
discretion, disclose any LTI Technology or LTI Improvements. If BioSepra
requests such consent, LTI agrees to reasonably consider such request, and to
respond timely. Except as provided herein, neither LTI nor BSA shall, without
prior written consent of BioSepra, which may be withheld at BioSepra's absolute
discretion, disclose any BioSepra Improvements. If LTI or BSA requests such
consent, BioSepra agrees to reasonably consider such request, and to respond
timely.
4. DISCLAIMER OF WARRANTY; CONSEQUENTIAL DAMAGES.
4.1 DISCLAIMER OF LTI AND BSA WARRANTY. Nothing in this Cross
License Agreement shall be construed as a representation made or warranty given
by either LTI or BSA that any patents will issue based on applications pending
from time to time within the LTI Technology or LTI Improvements, or that any
such patents which do issue will be valid, or that the practice by BioSepra of
any license granted hereunder, or that the use of any LTI Technology or LTI
Improvement will not infringe the patent or proprietary rights of any other
Person. In addition, BioSepra acknowledges that THE LTI TECHNOLOGY AND LTI
IMPROVEMENTS ARE LICENSED OR SUBLICENSED, AS THE CASE MAY BE, TO BIOSEPRA AS IS,
AND LTI AND BSA EXPRESSLY DISCLAIM AND HEREBY WAIVE, RELEASE AND RENOUNCE ANY
WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO SUCH LTI TECHNOLOGY AND LTI
IMPROVEMENTS, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
4.2 DISCLAIMER OF BIOSEPRA WARRANTY. Nothing in this Cross
License Agreement shall be construed as a representation made or warranty given
by BioSepra that any patents will issue based on applications pending from time
to time within the BioSepra Improvements, or that any such patents which do
issue will be valid, or that the practice by BSA or LTI of any license granted
hereunder, or that the use of any BioSepra Improvement will not infringe the
patent or proprietary rights of any other Person. In addition, each of BSA and
LTI acknowledges that THE BIOSEPRA IMPROVEMENTS ARE LICENSED OR SUBLICENSED,
AS THE CASE MAY BE, TO BSA AND LTI, RESPECTIVELY, AS IS,
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AND BIOSEPRA EXPRESSLY DISCLAIMS AND HEREBY WAIVES, RELEASES AND RENOUNCES ANY
WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO SUCH BIOSEPRA IMPROVEMENTS,
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
4.3 INDEMNIFICATION.
a. BioSepra shall indemnify, defend and hold LTI,
BSA, their Affiliates and their respective stockholders, directors, officers,
employees and agents harmless against any liability for infringement of the
intellectual property rights of any third Person, or for injury, death or damage
to property or interest arising from actions by BioSepra, its Affiliates,
sublicensees or the agents or customers of any of the foregoing under this Cross
License Agreement, including but not limited to the manufacture, development,
sale and use of any products based on LTI Technology, LTI Improvements or
BioSepra Improvements or use of the same by BioSepra, its Affiliates,
sublicensees or the agents or customers of any of the foregoing.
b. LTI shall indemnify, defend and hold BioSepra, its
Affiliates, and their respective stockholders, directors, officers, employees
and agents harmless against any liability for infringement of the intellectual
property rights of any third Person, or injury, death or damage to property or
interest arising from actions by LTI, its Affiliates other than BSA, its
sublicensees or the agents or customers of any of the foregoing under this Cross
License Agreement, including but not limited to manufacture, development, sale
and use of any products based on LTI Technology, LTI Improvements or BioSepra
Improvements or use of the same by LTI, its Affiliates other than BSA, its
sublicensees or the agents or customers of any of the foregoing.
c. BSA shall indemnify, defend and hold BioSepra, its
Affiliates, and their respective stockholders, directors, officers, employees
and agents harmless against any liability for infringement of the intellectual
property rights of any third Person, or injury, death or damage to property or
interest arising from actions by BSA, its sublicensees or the agents or
customers of any of the foregoing under this Cross License Agreement, including
but not limited to manufacture, development, sale and use of any products based
on LTI Technology, LTI Improvements or BioSepra Improvements or use of the same
by BSA, its Affiliates other than LTI and the Affiliates of LTI other than BSA,
its sublicensees or the agents or customers of any of the foregoing.
4.4 CONSEQUENTIAL DAMAGES. NO PARTY TO THIS AGREEMENT SHALL BE
ENTITLED TO RECOVER FROM ANOTHER ANY SPECIAL, INCIDENTAL,
CONSEQUENTIAL(INCLUDING BUT NOT LIMITED TO LOSS OF PROFITS) OR PUNITIVE DAMAGES.
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5. ACTUAL OR THREATENED INFRINGEMENT; DEFENSE OF CLAIMS.
(a) In the event a Party becomes aware of any
possible infringement or unauthorized possession, knowledge or use in the Fields
of any intellectual property which is the subject matter of this Cross License
Agreement (in each case, an "Infringement"), that Party shall promptly notify
the other Parties and provide them with full details. LTI and BSA shall each, in
respect of the intellectual property owned by such Party, have the first right
and option, but not the obligation, to prosecute or prevent the Infringement of
any patent claiming subject matter substantially within LTI Technology or LTI
Improvements at its sole expense. In the event LTI and/or BSA elect not to
prosecute or prevent any such Infringement, LTI or BSA, as the case may be,
shall give written notice to BioSepra stating that LTI or BSA, as the case may
be, elects not to prosecute or prevent such Infringement, and BioSepra shall
have the right, but not the obligation, upon written notice to LTI or BSA, as
the case may be, to prosecute or prevent such Infringement at its sole expense.
BioSepra shall keep LTI or BSA, as the case may be, advised of all actions taken
by BioSepra in the prosecution or prevention of any Infringement of LTI
Technology or LTI Improvement, and, in any lawsuit, legal action or legal
proceeding brought by BioSepra to prosecute or prevent Infringement of any LTI
Technology or LTI Improvement, BioSepra shall keep LTI or BSA, as the case may
be, advised of all progress and developments in such lawsuit, legal action or
legal proceeding, and BioSepra shall not (i) consent to any judgement, (ii)
enter into any settlement agreement, or (iii) take any action in such lawsuit,
legal action or legal proceeding that may directly or indirectly relate to or
affect the validity and/or enforceability of any LTI Technology or LTI
Improvements without the consent of LTI or BSA, as the case may be, which
consent shall not be unreasonably withheld. If BioSepra lacks standing to bring
a suit, action or proceeding to prosecute or prevent any such Infringement, and
LTI or BSA has standing to bring such suit, action or proceeding, then LTI or
BSA, as the case may be, shall do so at the request of BioSepra, at BioSepra's
sole expense.
BioSepra shall have the first right and option, but not the obligation, to
prosecute or prevent the Infringement of any patent claiming subject matter
within the BioSepra Improvements. In the event BioSepra elects not to prosecute
or prevent any such Infringement, BioSepra shall give written notice to LTI and
BSA stating that BioSepra elects not to prosecute or prevent such Infringement,
and LTI and BSA shall each have the right, but not the obligation, upon written
notice to BioSepra, to prosecute or prevent such Infringement, at its sole
expense. LTI and BSA shall keep BioSepra advised of all actions taken by LTI or
BSA, as the case may be, in the prosecution or prevention of any Infringement of
BioSepra Improvements, and, in any lawsuit, legal action or legal proceeding
brought by LTI or BSA to prosecute or prevent Infringement of any BioSepra
Improvement, LTI or BSA, as the case may be, shall keep BioSepra advised of all
progress and developments in such lawsuit, legal action or legal proceeding, and
LTI or BSA, as the case may be, shall not (i) consent to any judgement, (ii)
enter into any settlement agreement, or (iii) take any action in such lawsuit,
legal action or legal proceeding that may directly or indirectly relate to or
affect the validity and/or enforceability of any BioSepra Improvements without
the consent of BioSepra, which consent shall not be unreasonably withheld. If
LTI or BSA lacks standing to bring a suit, action or proceeding to prosecute or
prevent any such Infringement, and BioSepra has standing to bring such suit,
action or proceeding, then BioSepra shall do so at the request of LTI or BSA, at
the sole expense of LTI or BSA, as the case may be.
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If a Party determines that it is necessary or desirable for another Party hereto
to join any such suit, action or proceeding, such other Party shall execute all
papers and perform such other acts, at the expense of the Party prosecuting an
Infringement, as may be reasonably required in the circumstances. Each Party
shall bear the full cost of any proceeding or suit it will bring under this
Section 5, and shall have the full right to any recovery from such suit or
settlement. Each Party shall always have the right to be represented by counsel
of its own selection and at its own expense in any suit instituted under this
Section 5 by another Party for Infringement.
b. In any action under this Section 5, the Parties
shall fully cooperate with and assist each other. No suit under this Section 5
relating to an Infringement in the BioSepra Field may be settled by LTI or BSA
without BioSepra's consent, and no suit under this Section 5 relating to an
Infringement in the LTI Field may be settled by BioSepra without LTI's consent.
c. In the event that any action, suit or proceeding
is brought against BioSepra, BSA or LTI, or any Affiliate, licensee or
sublicensee of a Party hereto (the "Defending Party") alleging the infringement
of the intellectual property rights of a third party by reason of the discovery,
development, manufacture, use, sale, importation or offer for sale by the
Defending Party of a product in respect of which the Defending Party is a
licensee or sub-licensee hereunder, the Defending Party will have the sole
obligation to defend itself. The other Party (the "Secondary Party", which for
the purposes of this Section 5c shall mean BioSepra in those instances where the
Defending Party is BSA, LTI or any of their Affiliates, licensees, or
sub-licensees, and either or both, as the context requires, BSA and LTI in those
instances where the Defending Party is BioSepra or any of their Affiliates,
licensees, or sub-licensees) shall have the right to separate counsel at its own
expense in any such action or proceeding. The Parties will cooperate with each
other in the defense of any such suit, action or proceeding. The Parties will
give each other prompt written notice of the commencement of any such suit,
action or proceeding or claim of infringement and will furnish each other a copy
of each non-privileged communication relating to the alleged infringement. No
Party as a Defending Party shall compromise, litigate, settle or otherwise
dispose of any such suit, action or proceeding which involves the use of
Technology or Patent Rights licensed to the Defending Party hereunder without
the advice and prior consent of the Secondary Party, provided that such
Secondary Party shall not unreasonably withhold its consent to any settlement
which does not have a material adverse effect on its business. If the Defending
Party desires that the Secondary Party should join any suit, action or
proceeding pursuant to this Section 5c, which suit, action or proceeding
pertains to Technology or Patent Rights licensed hereunder to the Defending
Party, and the Secondary Party consents in writing to such joinder, the
Defending Party may at its expense, join the Secondary Party as a party to the
suit, action or proceeding, and the Secondary Party so joined shall execute all
documents and take all other actions, including giving testimony, which may
reasonably be required in connection with the prosecution or defense of such
suit, action or proceeding. If as a consequence of such action, suit or
proceeding by a third party claiming that the discovery, development,
manufacture, use or sale by or for the Defending Party of a product in respect
of which the Defending Party is a licensee or sub-licensee hereunder, infringes
such third party's intellectual property rights, the Defending Party is
prohibited or is only allowed in a
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restricted manner or subject to some conditions, financial or other, to
discover, develop, manufacture, use and/or sell such a product, the Parties
shall examine and discuss in good faith the consequences of such prohibition or
restriction or other conditions on this Cross License Agreement and on possible
modifications thereto.
6. NO IMPLIED WAIVERS; RIGHTS CUMULATIVE. No failure on the part of
BioSepra, LTI, or BSA to exercise and no delay in exercising any right, power,
remedy or privilege under this Cross License Agreement, or provided by statute
or at law or in equity or otherwise, shall impair, prejudice or constitute a
waiver of any such right, power, remedy or privilege or be construed as a waiver
of any breach of this Cross License Agreement or as an acquiescence therein, nor
shall any single or partial exercise of any such right, power, remedy or
privilege preclude any other or further exercise thereof or the exercise of any
other right, power, remedy or privilege.
7. FORCE MAJEURE. Each of BioSepra, LTI and BSA shall be excused for
any failure or delay in performing any of its respective obligations under this
Cross License Agreement if such failure or delay is caused by Force Majeure.
8. NOTICES. All notices, requests and other communications to BioSepra,
BSA or LTI hereunder shall be in writing (including telecopy or similar
electronic transmissions), shall refer specifically to this Cross License
Agreement and shall be personally delivered or sent by telecopy or other
electronic facsimile transmission or by registered mail or certified mail,
return receipt requested, postage prepaid, in each case to the respective
address specified below (or to such other address as may be specified in writing
to the other Party hereto):
BioSepra Inc.
111 Locke Drive
Marlborough, MA 01752
ATTENTION: President
with a copy to:
Mintz, Levin, Cohn, Ferris
Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
ATTENTION: William T. Whelan, Esq.
Life Technologies, Inc.
9800 Medical Drive
Rockville, MD 20850-3321
ATTENTION: Director Corporate Development
with a copy to: General Counsel
9
<PAGE> 10
BioSepra SA,
C/o Life Technologies, Inc.
9800 Medical Drive
Rockville, MD 20850-3321
ATTENTION: Director Corporate Development
with a copy to: General Counsel
and with a copy to:
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, NY 10103
ATTENTION: Mara Rogers, Esq.
Any notice or communication given in conformity with this Section 8 shall be
deemed to be effective when received by the addressee, if delivered by hand,
telecopy or other electronic facsimile transmission, and three (3) days after
mailing, if mailed.
9. FURTHER ASSURANCES. Each of BioSepra, BSA and LTI agrees to duly
execute and deliver, or cause to be duly executed and delivered, such further
instruments and do and cause to be done such further acts and things, including,
without limitation, the filing of such additional agreements, documents and
instruments, that may be necessary or as a Party hereto may at any time and from
time to time reasonably request in connection with this Cross License Agreement
or to carry out more effectively the provisions and purposes of, or to better
assure and confirm unto such other Party its rights and remedies under, this
Cross License Agreement.
10. SUCCESSORS AND ASSIGNS. The terms and provisions of this Cross
License Agreement shall inure to the benefit of, and be binding upon LTI, BSA,
BioSepra, and their respective successors and assigns. Each of LTI, BSA or
BioSepra may assign or otherwise transfer its rights and interests, and delegate
any of its respective obligations hereunder, pursuant to a merger or
consolidation, sale of stock or sale of all or substantially all of a Party's
assets related to the business to which this Cross License Agreement pertains
without the prior written consent of any other Party hereto. Any attempt to
assign or delegate any portion of this Cross License Agreement in violation of
this Section 10 shall be null and void. Any reference to LTI, BSA or BioSepra
hereunder shall be deemed to include the successors thereto and assigns thereof.
11. AMENDMENTS. No amendment, modification, waiver, termination or
discharge of any provision of this Cross License Agreement, nor consent to any
departure by LTI, BSA or BioSepra therefrom, shall be effective unless the same
shall be in writing specifically identifying this Cross License Agreement and
the provision intended to be amended, modified, waived, terminated or discharged
and signed by LTI, BSA and BioSepra, and each such amendment, modification,
waiver, termination or discharge shall be effective only in the specific
instance and for the specific purpose for which given. No provision of this
Cross License Agreement shall be
10
<PAGE> 11
varied, contradicted or explained by any oral agreements, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by LTI, BSA and BioSepra.
12. GOVERNING LAW. This Cross License Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, without
giving effect to the principle of conflicts of laws.
13. SEVERABILITY. If any provision hereof should be held invalid,
illegal or unenforceable in any respect in any jurisdiction, then, to the
fullest extent permitted by law, (a) all other provisions hereof shall remain in
full force and effect in such jurisdiction and shall be liberally construed in
order to carry out the intentions of the parties hereto as nearly as may be
possible and (b) such invalidity, illegality or unenforceability shall not
affect the validity, legality or enforceability of such provision in any other
jurisdiction. To the extent permitted by applicable law, each of LTI, BSA and
BioSepra hereby waive any provision of law that would render any provision
hereof prohibited or unenforceable in any respect.
14. HEADINGS. Headings used herein are for convenience only and shall
not in any way affect the construction of, or be taken into consideration
interpreting, this Cross License Agreement.
15. EXECUTION IN COUNTERPARTS. This Cross License Agreement may be
executed in counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original, and all of which counterparts,
taken together, shall constitute one and the same instrument.
16. ENTIRE AGREEMENT. This Cross License Agreement together with any
Schedules and agreements referenced herein, constitutes, on and as of the date
hereof, the entire agreement of LTI, BSA and BioSepra with respect to the
subject matter hereof, and all prior or contemporaneous understandings or
agreements, whether written or oral, between LTI, BSA and BioSepra with respect
to such subject matter are hereby superseded in their entirety.
17. TERMINATION.
a. This Cross License Agreement shall continue unless
and until terminated as set forth below.
b. In the event of material breach of any provision
of this Cross License Agreement, the breaching Party shall have sixty (60) days
after written notice thereof by a non-breaching Party within which to cure such
breach. In the event such breach has not been cured within such period of time,
a non-breaching Party may on notice to the breaching Party terminate this Cross
License Agreement.
c. Any Party may terminate this Cross License
Agreement on notice to a Party who becomes the subject of a petition filed for
relief under any bankruptcy or insolvency law, which is not dismissed within
sixty (60) days of its filing, any general arrangement with its creditors, or
any liquidation, termination or winding up of its business.
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<PAGE> 12
d. This Cross License Agreement may not be terminated
pursuant to either Section 17b or 17c by either BSA or LTI on account of (i)
uncured breach by LTI or BSA, respectively, or (ii) the occurrence of the events
described in Section 17c. by LTI or BSA, respectively.
e. Termination of this Cross License Agreement for
any reason shall not extinguish the obligations of any Party that accrued prior
to the effective date of termination. The obligations and rights of all Parties
under Sections 3.2, 4, 5, 8, 10, and 12 hereof shall survive termination for any
reason.
f. If the Party who has failed to cure a material
breach, or who has suffered the events described in Section 17c., is BioSepra,
the termination of this Agreement shall result in the termination of all rights
granted in Sections 2.1 and 2.2 above. In the event of such termination, the
rights granted to LTI and BSA in section 2.3 shall survive such termination. In
such event, BioSepra shall either promptly return to or dispose of all
Confidential Information of BSA or LTI in any form whatsoever which it may have
in its possession, custody or control (whether direct or indirect), provided
that any such disposition shall be conducted in a manner that protects the
confidentiality of such information.
If the Party who has failed to cure a material breach, or who has suffered the
events described in Section 17c, is BSA or LTI, the termination of this
Agreement shall result in the termination of all rights granted in Section 2.3
above. In the event of such termination, the rights granted to BioSepra in
Sections 2.1 and 2.2 above shall survive such termination. In such event, LTI
and BSA shall either promptly return to or dispose of all Confidential
Information of BioSepra in any form whatsoever which it may have in its
possession, custody or control (whether direct or indirect), provided that any
such disposition shall be conducted in a manner that protects the
confidentiality of such information.
g. No Party shall by reason of the termination of
this Cross License Agreement be liable to another for special, incidental or
consequential damages arising under this Cross License Agreement.
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<PAGE> 13
IN WITNESS WHEREOF, the parties hereto have caused this Cross License
Agreement to be duly executed under seal and delivered as of the date first
above written.
BIOSEPRA INC.
By: /s/ Jean-Marie Vogel
----------------------------------------
Jean-Marie Vogel
President and Chief Executive Officer
LIFE TECHNOLOGIES, INC.
By: /s/ C. Eric Winzer
----------------------------------------
C. Eric Winzer
Vice President-Finance, Chief Financial
Officer, Secretary and Treasurer
BIOSEPRA S.A.
By: /s/ Therese Bourdy
----------------------------------------
Therese Bourdy
Director General
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<PAGE> 14
SCHEDULE A
GLOSSARY
"AFFILIATE" shall mean any corporation, firm, partnership or other
entity which directly or indirectly is controlled by or is under common control
with a Party to this Cross License Agreement. "Control" means ownership,
directly or through one or more Affiliates, of fifty percent (50%) or more of
the shares of stock entitled to vote for the election of directors, in the case
of a corporation, fifty percent (50%) or more of the equity interests in the
case of any other type of legal entity, status as a general partner in any
partnership, or any other arrangement whereby a Party controls or has the right
to control the Board of Directors or equivalent governing body of a corporation
or other entity. Notwithstanding the foregoing, an "Affiliate" of LTI or BSA
shall not include The Dexter Corporation and its subsidiaries other than LTI and
LTI's subsidiaries. Notwithstanding the foregoing, an "Affiliate" of BioSepra
shall not include Sepracor Inc. and its subsidiaries other than BioSepra and
BioSepra's subsidiaries.
"BIOSEPRA FIELD" shall mean intracorporeal and "on line" extracorporeal
therapy, or any autologous treatment.
"BIOSEPRA IMPROVEMENTS" shall mean any developments directly relating
to any LTI Technology, including but not limited to variations, extensions,
improvements or enhancements to any LTI Technology that are discovered,
developed or otherwise acquired by BioSepra prior to the termination date set
forth in Section 2.4.
"CONFIDENTIAL INFORMATION" shall mean (1) all LTI Technology and LTI
Improvements disclosed by LTI or BSA to BioSepra and (2) all BioSepra
Improvements disclosed by BioSepra to LTI and/or BSA pursuant to this Cross
License Agreement, provided, however, that Confidential Information shall not
include any LTI Technology, LTI Improvement or BioSepra Improvement which is (a)
independently developed after the Effective Date hereof by the receiving Party
as demonstrated to the reasonable satisfaction of the disclosing Party, (b) in
the public domain at the time of its receipt or thereafter becomes part of the
public domain through no fault of the receiving Party as demonstrated to the
reasonable satisfaction of the disclosing Party, (c) received after the
Effective Date hereof without an obligation of confidentiality from a third
party having the right to disclose such information, (d) released from the
restrictions of Section 3.2 of this Cross License Agreement by the express
written consent of the disclosing Party, or (e) required by law, statute, rule
or court order to be disclosed (the receiving Party shall use reasonable efforts
to provide the disclosing Party the opportunity to obtain confidential treatment
of any such Confidential Information).
"FIELDS" shall mean the LTI Field and the BioSepra Field.
"FORCE MAJEURE" shall mean any act of God, any accident, explosion,
fire, storm, earthquake, flood, drought, peril of the sea, riot, embargo, war or
foreign, federal, state or municipal order of general application seizure,
requisition or allocation, any failure or delay of transportation, shortage of
or inability to obtain supplies, equipment fuel or labor or any other
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<PAGE> 15
circumstances or event beyond the reasonable control of the Party relying upon
such circumstance or event.
"IMPROVEMENTS" shall mean LTI Improvements and the BioSepra
Improvements.
"KNOW-HOW" shall mean originals or copies of laboratory notebooks,
primary data, research records and documentation, research plans, proposals,
conclusions, specification and information, to the extent any of the foregoing
is recorded in any tangible form, including, without limitation, gels,
photographs, printouts, electronic files and paper documents.
"LTI FIELD" shall mean all applications outside of the BioSepra Field.
"LTI IMPROVEMENTS" shall mean any development directly relating to any
LTI Technology, including but not limited to variations, extensions,
improvements or enhancements to any LTI Technology, that is discovered,
developed or otherwise acquired by LTI and/or BSA prior to the termination date
set forth in Section 2.4.
"LTI PATENT RIGHTS" shall mean Patent Rights owned by LTI and/or BSA.
"LTI TECHNOLOGY" shall mean all Technology which (i) was transferred to
LTI in the Asset Transfer, and is owned or controlled by LTI, or under which, as
a result of the Asset Transfer, LTI is licensed or sub-licensed and has the
right to grant licenses, sub-licenses or sub-sub-licenses, as the case may be,
as of the date hereof, or (ii) is owned or controlled by BSA, or under which BSA
is licensed or sub-licensed and has the right to grant licenses, sub-licenses or
sub-sub-licenses, as the case may be, as of the date hereof, including, but not
limited to, the LTI Patent Rights and other rights listed and described in
SCHEDULE 1.
"PATENT RIGHTS" shall mean (a) issued patents and patent applications,
(b) any patent application constituting an equivalent, counterpart, reissue,
extension or continuation (including, without limitation, continuations-in-part,
divisions, and renewals, all letters patent granted thereon, all reissues,
reexamination) of any of the foregoing applications, including pending patent
applications in any country and (c) any patent issued or issuing upon any of the
foregoing applications.
"PERSON" shall mean any individual, partnership, corporation, firm,
association, unincorporated organization, joint venture, trust or other entity.
"TECHNOLOGY" shall mean public and nonpublic technical or other
information, trade secrets, Know-How, processes, formulations, concepts, ideas,
preclinical, clinical, pharmacological or other data and testing results,
experimental methods, or results, descriptions, scientific plans, depictions,
and any other written, printed or electronically stored materials that
constitute or contain any of the foregoing.
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<PAGE> 1
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
Exhibit 2.3
SUPPLY AGREEMENT
This Supply Agreement. ("Supply Agreement"), dated as of May 17, 1999,
is by and between BioSepra Inc., a Delaware corporation (together with its
successors or assigns, "BioSepra"), and BioSepra S.A, a French societe anonyme
(together with its successors and assigns, "BSA"), regarding the manufacture and
sale by BSA of certain Products (as further defined in SCHEDULE A) to be
purchased by BioSepra. Each of BioSepra and BSA is sometimes referred to herein
individually as a "Party" and collectively as the "Parties."
R E C I T A L S :
A. BioSepra and Life Technologies, Inc., a Delaware corporation
("LTI"), have entered into an Asset Purchase Agreement dated April 14, 1999 (the
"Asset Purchase Agreement"), in connection with which certain assets of BioSepra
are being transferred to LTI (the "Asset Transfer"), including without
limitation, certain patents, patent applications, trademarks, trade secrets and
know-how for use in the development, manufacture, use or sale of Products that
may be useful in the BioSepra Field (as further defined in Schedule A).
B. As part of the Asset Transfer, LTI is acquiring 100% of the capital
stock of BSA, a former subsidiary of BioSepra.
C. BSA has agreed to manufacture and sell and BioSepra has agreed to
purchase Products subject to and upon the terms provided herein.
NOW, THEREFORE, in consideration of the mutual promises, terms and
conditions hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties do hereby
agree as follows:
1. DEFINITIONS.
Any capitalized term used herein, and not otherwise defined in the
text, shall have the meaning defined in Schedule A.
2. MANUFACTURING OBLIGATIONS.
a. For the purposes hereof, "Products" shall mean Standard
Products and those Custom Products which BSA agrees to manufacture. For each
such Product, BSA shall advise BioSepra of the lead time required to permit the
manufacture and quality assurance of such Product by BSA (the "Lead Time").
b. During the term of this Supply Agreement and subject to
Section 2(f) below, BSA shall manufacture for BioSepra and BioSepra shall order
and purchase from BSA the Standard Products required by BioSepra during the term
hereof.
<PAGE> 2
c. During the term of this Supply Agreement, BioSepra shall
provide to BSA, prior to the beginning of each calendar quarter, a binding
forecast for such quarter and a non-binding forecast for the three succeeding
calendar quarters of BioSepra's anticipated requirements of and desired delivery
dates for the Standard Products and for those Custom Products for which the
terms of purchase and sale have been otherwise agreed between the Parties.
BioSepra shall from time to time place firm orders for specific Products with
BSA not less than the applicable Lead Time in respect of each such Product
before the delivery date for such Product by the transmittal to BSA, of written
orders on BioSepra's regular purchase order forms, which shall be deemed
accepted upon BSA's written acceptance thereof. Such purchase orders shall
identify the (i) Products ordered, (ii) quantities ordered, (iii) requested
delivery date(s) and (iv) any export/import information required to enable BSA
to fill the order.
d. Unless BioSepra requests otherwise, all Products ordered
shall be packed for shipment and storage in accordance with BSA's standard
commercial practices, except that such Products shall be labeled as follows:
"Manufactured for BioSepra Inc.
CAUTION: For use as a raw material component in a further manufacturing
application. The performance characteristics of this product have not been
established."
It is BioSepra's obligation to notify BSA at BSA's address pursuant to Section
14(e) hereof and obtain BSA's consent to any special packaging requirements
(which shall be at BioSepra's expense).
e. In the event of any discrepancy or conflict between the
terms of this Supply Agreement, the terms of sale under which BSA sells goods,
and the terms of BioSepra's purchase order, the terms of this Supply Agreement
shall govern. To the extent that this Supply Agreement does not address a
discrepancy or conflict between the terms of sale under which BSA sells goods,
and the terms of BioSepra's purchase order, the terms of sale under which BSA
sells goods shall govern.
f. During the term of this Supply Agreement, BioSepra shall
purchase such of its requirements of Standard Products from BSA as it elects.
g. For each Standard Product, BioSepra hereby agrees to
undertake when appropriate the necessary actions (including without limitation a
current Good Manufacturing Practices audit) to qualify BSA or its designated
Affiliate with the FDA and other regulatory agencies as a supplier to BioSepra
with respect to such Standard Product. BSA agrees to cooperate with BioSepra
with respect to such undertaking.
h. For the avoidance of doubt, BSA shall be under no
obligation to develop, manufacture or sell any Custom Product to BioSepra unless
the Parties have agreed in writing to all of the relevant Specifications, price,
and any other applicable terms.
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<PAGE> 3
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
3. COMPENSATION FOR MANUFACTURING OBLIGATION.
a. For the manufacture of a Standard Product to be purchased
by BioSepra, BSA shall receive compensation in the amount of:
(i) the lowest price made available by BSA during the six months prior
to the placement of an order by BioSepra for such Standard Product to
any of its end-use customers other than BioSepra or its Affiliates,
BSA's Affiliates and BSA's or its Affiliates' distributors (such other
customer, the "Most Favored Customer"), less a *** discount, or
(ii) Cost plus ***, if
(A) BSA is not then supplying such Standard Product to any of
its end-use customers other than BioSepra or its Affiliates,
BSA's Affiliates and BSA's or its Affiliates' distributors, or
(B) the price paid by the Most Favored Customer, less ***
discount, would yield a Gross Margin (as defined below) to BSA
of less than Cost plus ***.
"Cost" for the purposes of this Supply Agreement is defined in respect
of each Product as BSA's actual direct manufacturing material, labor and
overhead costs plus indirect manufacturing overhead costs for such Product, all
as determined by generally accepted accounting principles. "Gross Margin" for
the purposes of this Supply Agreement in respect of each Product is defined as
the difference between (x) the revenues net of freight, duty and other shipping,
packaging, tax or related charges, which are received by BSA from the sale of
such Product, and (y) Cost.
b. For the manufacture of Custom Products to be purchased by
BioSepra, BSA shall receive compensation based upon a price schedule mutually
agreed upon for such Custom Products. It is the intent of the Parties that BSA
will charge prices to BioSepra for each Custom Product that will be negotiated
annually in good faith, but which shall not deliver to BSA a Gross Margin in
excess of ******************* based upon BSA's standard cost accounting system
(such limitation on Gross Margin to be binding only if all research and
development costs associated with the manufacture of such Custom Products has
been paid by BioSepra). Such prices will be negotiated annually by the parties
to provide BSA with a reasonable manufacturing profit and BioSepra with an
economically viable product.
c. BSA shall keep and maintain complete and accurate records
and books of account in sufficient detail and form so as to enable verification
of its costs. Such records and books of account shall be maintained for a period
of not less than two (2) years following the calendar year to which they
pertain. BSA shall permit such relevant records and books of account to be
examined by independent accountants of BioSepra, reasonably acceptable to BSA,
no more frequently than once each calendar year, to the extent necessary for
BioSepra to have such costs verified. Such examination shall be during normal
business hours, upon not less than twenty (20) days' prior written notice to
BSA, and at BioSepra's expense unless the examination should establish that
BSA's claimed costs for the period examined were more than one hundred
3
<PAGE> 4
and ten percent (110%) of BSA's actual costs for such period, in which case BSA
shall be responsible for the expenses of such examination. BioSepra's
accountants will be permitted to disclose the results of their audit to BioSepra
only as a report that BSA is either in or out of compliance with this Supply
Agreement, and if out of compliance, the amount and direction of such
non-compliance. If BSA and BioSepra accept the auditor's conclusion, prompt
adjustment shall be made by the proper Party to compensate for any errors or
omissions revealed by such audit. Information obtained during the course of such
an examination shall be kept confidential by BioSepra's auditor. If either Party
rejects the results of such audit, the dispute will be resolved by arbitration
as provided for in this Supply Agreement.
BSA shall use commercially reasonable efforts to procure components,
raw materials, and other services necessary to manufacture Products at the
lowest cost reasonably practicable.
4. PAYMENT.
All payments required in this Supply Agreement, including without
limitation payment for Products described in Section 3 above, shall be made
within thirty (30) days of BSA's submitting its invoice for such payment to
BioSepra.
5. DELIVERY.
a. PRE-SHIPMENT RELEASE. BSA shall, at the prior written
request of BioSepra, prior to releasing the first shipment from any lot of
Product for shipment to BioSepra, deliver to BioSepra (i) a certificate of
analysis to the extent available at that time summarizing the results of BSA's
tests of conformity of such lot to the applicable Specifications; (ii) a
pre-release sample of Product from such lot for BioSepra's testing, provided
that BioSepra shall have executed BSA's form of quality control waiver in
respect of such sample; and (iii) such other documentation as the Parties shall
have mutually agreed. BioSepra shall, within forty five (45) days of receipt of
a pre-release sample of such Product, perform any and all tests as it, in its
sole discretion, deems appropriate to satisfy itself that the Product sampled is
in complete conformity with all applicable Specifications, and shall notify BSA
in writing of any items of non-conformance to the Specifications applicable to
such Product. If BioSepra reasonably demonstrates that a pre-release sample of a
Product is not in compliance with the applicable Specifications, BSA shall take
such actions as are reasonably necessary to cause the Product to be in
compliance with the Specifications to BioSepra's reasonable satisfaction prior
to releasing any shipment from such lot for shipment to BioSepra. If BSA
declines to accept the results of BioSepra's pre-release testing, such
acceptance not to be unreasonably declined, BSA and BioSepra shall seek a
mutually acceptable resolution of the issue. The failure of the Parties to agree
shall be a basis for either Party to appoint an independent, qualified third
party to assess compliance of the Product with the Specifications. The costs
incurred shall be borne by BioSepra if the Product is found to be in compliance
with the applicable Specifications, and by BSA if otherwise.
b. SHIPPED UNIT ACCEPTANCE TESTING. BSA shall deliver to
BioSepra with each lot of Product delivered, a certificate of analysis
summarizing the results of BSA's tests of conformity of such lot to the
applicable Specifications and such other documentation as the Parties shall have
mutually agreed. BioSepra shall, within forty five (45) days of receipt of such
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<PAGE> 5
Product, perform any and all tests as it, in its sole discretion, deems
appropriate to satisfy itself that the Product is in complete conformity with
all applicable Specifications, and shall notify BSA in writing of any items of
non-conformance to the Specifications applicable to such Product. If BioSepra
reasonably demonstrates that a Product is not in compliance with the applicable
Specifications, BioSepra shall return, at BSA's expense, such Product to BSA. If
BSA declines to accept the results of BioSepra's testing, such acceptance not to
be unreasonably declined, BSA and BioSepra shall seek a mutually acceptable
resolution of the issue. The failure of the Parties to agree shall be a basis
for either Party to appoint an independent, qualified third party to assess
compliance of the Product with the Specifications. The costs incurred shall be
borne by BioSepra if the Product is found to be in compliance with the
applicable Specifications, and by BSA if otherwise. Each unit of Product
received by BioSepra shall be deemed accepted by BioSepra unless BSA is notified
in writing of BioSepra's rejection of such delivery within forty five (45) days
after the delivery date for such unit due to non-conformance of such unit with
the Specifications, or within five (5) days after the delivery date on account
of shortage, damage in transit, or other deficiency. In the event of rejection
of any part of such delivery, the remedies set forth in Section 9.1(c) shall
apply. BSA reserves the right, at BSA's expense, to have one or more
representatives present at any inspection of BSA-delivered units conducted by
BioSepra and to verify the results of any such inspection and rejection of
units. BioSepra's acceptance of Product shall not terminate BioSepra's warranty
remedies specified below.
c. All deliveries of Products shall be FCA (Incoterms 1990)
BSA's place of manufacture of the Products. It shall be BioSepra's
responsibility to arrange and pay for all transportation, insurance and other
charges incurred after delivery of the Products to BSA's dock.
d. BSA agrees to use reasonable efforts to meet the estimated
shipping dates set froth in BioSepra's purchase orders, but does not warrant
that any specified delivery date will be met.
e. BSA assumes no responsibility or liability for any loss or
damage incurred by BioSepra by reason of a delay in the delivery date, inability
to ship or any of the reasons set forth in Section 7 below.
f. BioSepra shall have the right to assume manufacturing of
any Standard Product, and BSA shall, upon written request of BioSepra, provide
to BioSepra a copy of all written Know-How (as further defined in SCHEDULE A)
directly related to the manufacture of such Standard Products as BioSepra has
elected to manufacture. All such Know-How shall be Confidential Information of
BSA.
6. PASSAGE OF TITLE.
Beneficial ownership of, title and risk of loss to the Products shall
pass to BioSepra when such Products are picked up by a common carrier at BSA's
facility.
7. FORCE MAJEURE.
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<PAGE> 6
Except for obligations of payment, BioSepra and BSA shall each be
excused for any delay or failure to fulfill any of their respective obligations
under this Supply Agreement if such failure or delay is caused by any act of
God, any accident, explosion, fire, storm, earthquake, flood, drought, peril of
the sea, riot, embargo, war or foreign, federal, state, provincial or municipal
order of general application, seizure, requisition or allocation, any failure or
delay of transportation, shortage of or inability to obtain supplies, equipment,
fuel or labor, or any other circumstances or event beyond the reasonable control
of the Party relying upon such circumstances or event.
8. CONFIDENTIALITY.
Each Party acknowledges and agrees that in the course of its
performance of this Supply Agreement confidential technology, trade secrets,
Product Specifications or other proprietary information relating to the
development, manufacture and sale of the Products (hereinafter "Confidential
Information") may be made known or made available to the other Party.
Accordingly, during and after the term of this Supply Agreement, each Party:
a. represents that it has the right to disclose the
Confidential Information that it discloses;
b. agrees that the other Party hereto has a proprietary
interest in Confidential Information disclosed by such other Party (the
"Discloser");
c. agrees that during and after the term of this Supply
Agreement, all disclosures of Confidential Information received by the receiving
Party (the "Recipient") shall be held in strict confidence by such Recipient.
Such Recipient shall disclose the Confidential Information of the Discloser only
to those of its agents, sublicensees, consultants, subcontractors and its or
their employees to whom it is necessary to make such disclosure in order to
permit the Recipient to properly exercise its rights and perform its obligations
hereunder. During and after the term of this Supply Agreement, the Recipient
shall not use the Confidential Information of the Discloser except for the
purposes of exercising its rights and carrying out its duties hereunder. Each
Party shall take necessary steps to ensure that its agents, sublicensees,
consultants, subcontractors and its or their employees respect the terms of this
Section 8.
d. agrees that notwithstanding the provisions of this
Section 8, each Party may, to the extent necessary, disclose and use
Confidential Information of the other Party, consistent with the rights of such
Party otherwise granted hereunder, for the purpose of:
(i) engaging in research and development pertaining to one or more
Products or products made by the employment of a Product, conducting
clinical testing and marketing programs pertaining to products made by
the employment of a Product, or securing institutional or governmental
approval to clinical test or market any product made by the employment
of a Product; or
(ii) sharing clinical trial results and data with third parties
conducting clinical trials on products made by the employment of a
Product; or
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<PAGE> 7
(iii) securing patent or other intellectual property protection for an
invention pertaining to one or more Products;
Provided, However, the Recipient shall make no disclosure of information
designated by the Discloser as Confidential Information except under written
confidentiality and non-use agreements obligating the party to whom the
Recipient intends to make such disclosure in a manner no less burdensome than
the manner by which the Recipient is burdened hereunder. Except as provided
above and in Subsection 8(e)(v) below, Recipient shall not, without prior
written consent of Discloser, which may be withheld at Discloser's absolute
discretion, disclose any Confidential Information of the Discloser. If a Party
as a Recipient requests such consent, Discloser agrees to reasonably consider
such request, and to respond timely.
e. agrees that notwithstanding anything contained in this
Supply Agreement to the contrary, the Recipient shall not be liable for a
disclosure of the Discloser's Confidential Information if the information so
disclosed:
(i) was in the public domain without violation of the rights of the
Discloser at the time it was disclosed by the Discloser to the
Recipient; or
(ii) enters the public domain without violation of the rights of the
Discloser after the time it was disclosed by the Discloser to the
Recipient; or
(iii) was known to or contained in the records of the Recipient from a
source with rights thereto not in violation of the rights of the
Discloser at the time of disclosure by the Discloser to the Recipient
and can be so demonstrated by the Recipient; or
(iv) becomes known to the Recipient from a source other than the
Discloser without breach of this Supply Agreement by the Recipient and
can be so demonstrated by the Recipient; or
(v) becomes required to be disclosed under legal or administrative
process, provided that the Recipient has given the Discloser not less
than ten (10) days' prior written notice of the Recipient's intention
to make a disclosure pursuant to this Section 8(e)(v); and
f. agrees that if either Party as a Recipient discovers a
misappropriation of the other Party's Confidential Information by a third party,
it shall give the Discloser prompt notice thereof and shall take no other action
against the alleged misappropriator without the prior written consent of the
Discloser. The Recipient agrees to cooperate with the Discloser, at no
out-of-pocket expense to the Recipient, in connection with any action taken by
the Discloser to pursue such misappropriator. Any recovery of damages or
attorneys' fees in such actions, or amounts received at settlement thereof,
shall accrue to the Discloser, net of any costs and expenses incurred by the
Recipient in obtaining such recovery.
7
<PAGE> 8
9. PRODUCT AND MANUFACTURER'S WARRANTIES.
9.1 BSA's Warranties.
a. BSA shall manufacture, package, and ship the Products in
conformity with the Specifications and free from defects in material and
workmanship, which shall include, for those Standard Products which are
microbeads or microparticles as described in Subsections 1 through 5 of the
definition of Standard Products, (i) manufacture in conformity with the
then-current applicable Good Manufacturing Practices (as described in Title 21
of the U.S. Code of Federal Regulations, Part 820), and any other applicable
standards for manufacturing of a Product, (ii) compliance with all requirements
for product release specified in the applicable Drug Master File for a Product,
(iii) maintenance by BSA of its manufacturing facility, equipment and procedures
so as to obtain and comply with ISO 9001 certification requirements as
designated by an appropriately authorized third party, and (iv) packaging and
labeling under a label of BioSepra. BSA warrants that the manufacture of the
Product hereunder shall be (x) in compliance in all material respects with all
applicable federal, state and local laws, rules, regulations and executive
orders, including without limitation, employee compensation law, health and
safety and environmental laws applicable to BSA's facility, and applicable
regulations of the FDA or such similar governmental body in France, as
applicable, as they pertain to a Product; and (y) performed in a professional,
workmanlike manner in accordance with prevailing industry standards.
b. BioSepra explicitly acknowledges and accepts that (i) BSA
provides no representations or warranties that the Products are suitable for use
as therapeutics or as raw materials for the manufacture of therapeutics; (ii)
BSA's warranties shall not be effective if BSA reasonably demonstrates that
BioSepra or its designee, or the customer(s) of either, have misused the Product
or a product containing, made from, or employing the Product in any manner; and
(iii) BSA's warranties are personal to BioSepra as to the Products, and shall
not be construed as running to the benefit of BioSepra's distributors or its or
their customers.
c. BSA shall either repair or replace or provide to BioSepra
full credit for the purchase price of any Product which is defective due to
BSA's failure to comply with BSA's warranties set forth in Section 9.1(a), as
limited by Section 9.1(b) hereunder. Any credit shall be made within thirty (30)
days after BSA takes receipt of the defective Product; and any such repair or
replacement shall be made within the applicable Lead Time for the Product in
question. All shipping and other costs incurred in connection with the repair or
replacement of any defective Product shall be borne by and for the account BSA.
d. EXCEPT AS STATED ABOVE, BSA DISCLAIMS ALL WARRANTIES OF ANY
KIND, WHETHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO THE PRODUCTS,
INCLUDING ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. BSA'S LIABILITY FOR DAMAGES TO BIOSEPRA FOR ANY CAUSE WHATSOEVER,
REGARDLESS OF THE FORM OF ANY CLAIM OR ACTION, SHALL NOT EXCEED THE TOTAL COST
PAID BY BIOSEPRA FOR THE PRODUCT INVOLVED. BSA SHALL IN NO EVENT BE LIABLE TO
BIOSEPRA OR ANY THIRD PARTY FOR ANY DAMAGES
8
<PAGE> 9
RESULTING FROM LOSS OF PROFITS, OR FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR
EXEMPLARY DAMAGES ARISING OUT OF, OR IN CONNECTION WITH, THE USE, MANUFACTURE OR
SALE OF THE PRODUCTS, THE MANUFACTURE, USE OR SALE OF ANY PRODUCTS MADE FROM OR
INCORPORATING THE PRODUCTS, OR THE PERFORMANCE OF ANY SERVICE IN WHICH A PRODUCT
IS EMPLOYED.
9.2 BioSepra's Warranties.
BioSepra warrants that:
(a) Any
(i) product whose manufacture employs in anyway any Product delivered hereunder
to BioSepra, and
(ii) Product manufactured (A) by BioSepra or (B) by a third party other than BSA
for BioSepra
shall be manufactured, packaged and shipped, and all Product delivered or
manufactured hereunder shall be used by or for BioSepra, in compliance in all
material respects with all applicable federal, state and local laws, rules,
regulations and executive orders, including without limitation, employee
compensation law, health and safety and environmental laws applicable to
BioSepra's facilities, and all applicable customs laws and regulations, and
applicable regulations of the FDA and the European Community and Japanese
equivalents of the FDA; and
(b) BioSepra's obligations in the manufacturing, packaging and
shipping of any Product or product made using Product supplied hereunder shall
be performed in a professional, workmanlike manner in accordance with prevailing
industry standards; and
(c) any product made using Product supplied hereunder shall be
free from defects in material and workmanship; and
(d) BioSepra will have reasonably determined that the
Specifications are adequate to confirm the suitability of the Product supplied
hereunder for the uses to which said Product will be put by BioSepra and its
Affiliates; and
(e) BioSepra shall perform diligently sufficient incoming
inspection to satisfy its obligations under this Supply Agreement and under all
applicable laws, rules and regulations.
The parties hereto acknowledge and agree that BioSepra shall have no liability
to BSA under this Section 9.2 except with respect to third party claims asserted
against BSA which are based in whole or in part on breaches of product
warranties of the nature included herein made to users of BioSepra products
incorporating or made from Products.
10. INTELLECTUAL PROPERTY WARRANTIES
9
<PAGE> 10
a. INTELLECTUAL PROPERTY WARRANTY BY BIOSEPRA. BioSepra
represents and warrants to BSA that BioSepra will own, or will have the full
right to use under written agreements, all intellectual property rights included
in the technology which, from and after the date hereof, BioSepra will develop
and provide or license to BSA in connection with transactions contemplated
hereby, which intellectual property rights will be used or practiced in order
for BSA to manufacture the Products. BioSepra has no knowledge of any
infringement of any intellectual property right of any third party which will
arise out of or be incident to manufacture or sale of any Product pursuant to
this Supply Agreement insofar as such manufacture or sale is based on any of the
foregoing intellectual property rights.
b. INTELLECTUAL PROPERTY WARRANTY BY BSA. BSA represents and
warrants to BioSepra that it will own, or will have the full right to use under
written agreements, all intellectual property rights which will be used or
practiced, from and after the date hereof, in order for BSA to manufacture
Products in connection with transactions contemplated hereby other than (i) the
intellectual property rights which BioSepra will provide or license to BSA in
connection with transactions contemplated hereby, or (ii) the intellectual
property rights acquired by LTI in the Asset Purchase Agreement, and (iii) any
intellectual property rights owned by or licensed under written agreements to
BSA as of the date of the Asset Purchase Agreement. BSA has no knowledge of any
infringement of any intellectual property right of any third party which will
arise out of or be incident to manufacture or sale of any Product pursuant to
this Supply Agreement.
11. INDEMNIFICATION.
a. BSA shall defend and hold harmless BioSepra, its
Affiliates, and its or their stockholders, officers, directors, employees and
agents from any and all losses, claims, costs or damages (including reasonable
attorneys' fees and expenses) arising out of any claim or action for bodily
injury, death or property damage based on the use by or for BioSepra of any
Products in the BioSepra Field to the extent such loss, claim, cost or damage
results, directly or indirectly, (i) from a breach by BSA of its warranties as
set forth in this Supply Agreement, or (ii) from any negligent, willful or
intentional acts by BSA or its Affiliates or its or their employees or agents.
In no event will any indemnification by BSA exceed the total purchases of
Products by BioSepra pursuant to this Supply Agreement.
b. BioSepra shall indemnify, defend and hold harmless BSA, its
Affiliates, and its and their stockholders, officers, directors, employees and
agents from any and all losses, claims, costs or damages (including reasonable
attorney's fees and expenses) arising out of any claim or action for bodily
injury, death or property damage caused by or arising from (i) a breach by
BioSepra of any of its warranties as set forth in this Supply Agreement, (ii)
the use by or for BioSepra or its direct or indirect customers of any Product or
any product made from or incorporating a Product in any application, (iii)
manufacture of Custom Products, provided, that BSA has manufactured such Custom
Products in accordance with the applicable Specifications, (iv) the negligent,
willful or intentional acts of BioSepra, its Affiliates, its or their customers,
employees or agents, and (v) any other circumstance relating to this Supply
Agreement other than those caused by a breach by BSA of its warranties set forth
in this Supply Agreement, or the negligent, willful or intentional acts of BSA
or its Affiliates or its or their employees or agents.
10
<PAGE> 11
12. TERMINATION.
a. The term of this Supply Agreement shall commence on the
date hereof and shall continue unless sooner terminated as set forth below until
April 30, 2004. The term shall be extended automatically on the same terms and
conditions for successive periods of one (1) calendar year each unless either
Party, in its sole discretion, shall give written notice to the other not less
than six months prior to the expiration of the initial term or of any extension
thereof of either cancellation or a requirement to renegotiate any term or
condition hereof.
b. In the event of material breach of any provision of this
Supply Agreement, the breaching Party shall have sixty (60) days after written
notice thereof by the non-breaching Party within which to cure such breach. In
the event such breach has not been cured within such period of time, the
non-breaching Party may on notice to the breaching Party terminate this Supply
Agreement.
c. Either Party may terminate this Supply Agreement on notice
to the other Party in the event the other Party (i) becomes the subject of a
petition filed for relief under any bankruptcy or insolvency law, which is not
dismissed within sixty (60) days of its filing; (ii) becomes subject to any
general arrangement with its creditors; or (iii) engages in any liquidation,
termination or winding up of its business.
d. Termination of this Supply Agreement for any reason shall
not extinguish the unpaid obligations of any Party that accrued prior to the
effective date of termination.
13. EFFECT OF TERMINATION. Upon termination of this Supply
Agreement for any reason:
a. Each Party shall, at the request of the other, either
promptly return to the other Party or dispose of all of the other Party's
Confidential Information in any form whatsoever which it may have in its
possession, custody or control (whether direct or indirect), provided that any
such disposition shall be conducted in a manner that protects the
confidentiality of such information.
b. BioSepra shall, at the request of BSA, repurchase all or
any portion of BSA's then existing inventory of (i) the Custom Products and the
parts, materials and components thereof and (ii) the parts, materials and
components purchased by BSA for the manufacture of Standard Products in order to
fulfil orders of BioSepra, to the extent such inventory is in excess of BSA's
requirements for the sale of Standard Products to its other customers. All
finished Custom Products shall be purchased at the price then in effect for such
Custom Products. All parts, materials and components of the Custom Products, and
the excess of the parts, materials and components of the Standard Products shall
be purchased at the price paid for such items by BSA, plus an amount equal to
the transportation, insurance and warehousing expenses incurred by BSA in
acquiring and storing such parts, materials and components. In the event that
BioSepra does not purchase all such inventory within fourteen (14) days after
the termination of this Supply Agreement, BSA shall have the right to sell or
11
<PAGE> 12
dispose of such inventory, in whatever manner it seems fit, without liability to
BioSepra for any reason, including without limitation infringement of any
intellectual property rights of BioSepra. To the extent that such disposition
causes a net loss to BSA, BioSepra shall reimburse such loss to BSA.
c. BioSepra shall not be released from its obligation to pay
any sums then owing to BSA and neither Party shall be released from the
obligation to perform any other duty or to discharge any other liability that
has been incurred prior thereto. Subject to the foregoing, neither Party shall
by reason of the termination of this Supply Agreement be liable to the other for
compensation or damages on account of the loss of profits or sales, or
expenditures, investments or commitments in connection therewith, except as
provided for above.
14. MISCELLANEOUS.
a. No Party shall assign any or all of its rights or
obligations hereunder to any third party without first obtaining the written
consent thereto of the other Party, which consent shall not be unreasonably
withheld or delayed, except that in the event of an assignment in connection
with a sale or transfer of all or substantially all of the assets of the
assigning Party, no such consent shall be required, if the assignee agrees to be
bound by the terms hereof within five (5) days after such assignment. The terms
and provisions of this Supply Agreement shall inure to the benefit of, and be
binding upon, BioSepra, BSA and their respective successors and permitted
assigns. Any reference to BioSepra and BSA hereunder shall be deemed to include
the successors thereto and permitted assigns thereof.
b. This Supply Agreement shall be governed by and construed in
accordance with the laws of France applicable to agreements made and to be fully
performed therein, without regard to principles of conflicts of law and without
regard to the United Nations Convention on Contracts for the International Sale
of Goods.
c. No amendment, modification, waiver, termination or
discharge of any provision of this Supply Agreement, nor consent to any
departure by either Party therefrom, shall be effective unless the same shall be
in writing specifically identifying this Supply Agreement and the provision
intended to be amended, modified, waived, terminated or discharged and signed by
each Party, and each such amendment, modification, waiver, termination or
discharge shall be effective only in the specific instance and for the specific
purpose for which given. No provision of this Supply Agreement shall be varied,
contradicted or explained by any oral agreements, course of dealing or
performance or any other matter not set forth in an agreement in writing and
signed by each Party.
d. Nothing herein contained shall be deemed to create a joint
venture, agency, partnership or employer-employee relationship between the
Parties hereto. Neither Party shall have any power to enter into any contracts
or commitments in the name of, or on behalf of, the other Party, or to bind the
other Party in any respect whatsoever.
e. All notices, requests and other communications to BioSepra
or BSA hereunder shall be in writing (including telecopy or similar electronic
transmissions) and shall be
12
<PAGE> 13
personally delivered or sent by telecopy or other electronic facsimile
transmission during normal business hours or by registered mail or certified
mail, return receipt requested, postage prepaid, in each case to the respective
address specified below (or to such other address as may be specified in writing
to the other Party hereto):
BioSepra Inc.
111 Locke Drive
Marlborough, MA 01752
Attention: President
BioSepra S.A.
c/o Life Technologies, Inc.
9800 Medical Drive
Rockville, MD 20850-3321
Attention: Director Corporate Development
With a copy to General Counsel at the same address.
Any notice or communication given in conformity with this Section 14(e) shall be
deemed to be effective when received by the addressee if delivered by hand,
telecopy or other electronic facsimile transmission, and three (3) days after
mailing, if mailed.
f. This Supply Agreement constitutes, on and as of the date
hereof, the entire agreement of BioSepra and BSA with respect to the subject
matter hereof, and all prior or contemporaneous understandings or agreements,
whether written or oral, between BioSepra and BSA with respect to such subject
matter are hereby superseded in their entirety.
g. If any provision hereof should be held invalid, illegal or
unenforceable in respect in any jurisdiction, then, to the fullest extent
permitted by law, (i) all other provisions hereof shall remain in full force and
effect in such jurisdiction and shall be liberally construed in order to carry
out the intentions of the Parties hereto as nearly as may be possible and (ii)
such invalidity, illegality or unenforceability shall not affect the validity,
legality or enforceability of such provision in any other jurisdiction. To the
extent permitted by applicable law, BioSepra and BSA hereby waive any provision
of law that would render any provision hereof prohibited or unenforceable in any
respect.
h. No failure on the part of BioSepra or BSA to exercise and
no delay in exercising any right, power, remedy or privilege under this Supply
Agreement, or provided by statute or at law or in equity or otherwise, shall
impair, prejudice or constitute a waiver of any such right, power, remedy or
privilege or be construed as a waiver of any breach of this Supply Agreement or
as an acquiescence therein, nor shall any single or partial exercise of any such
right, power, remedy or privilege preclude any other or further exercise thereof
or the exercise of any other right, power, remedy or privilege.
i. Notwithstanding anything else in this Supply Agreement to
the contrary, the Parties agree that Sections 8, 9, 10, 11, 12d and 13 shall
survive the termination or expiration
13
<PAGE> 14
of this Supply Agreement, as the case may be, to the extent required thereby for
the full observation and performance by any or all of the Parties hereto.
j. Headings used herein are for convenience only and shall not
in any way affect the construction of, or be taken into consideration
interpreting, this Supply Agreement.
k. This Supply Agreement may be executed in counterparts, each
of which counterparts, when so executed and delivered, shall be deemed to be an
original, and all of which counterparts, taken together, shall constitute one
and the same instrument.
1. Any dispute concerning solely the determination of facts
such as, but not limited to, whether pricing for Products to BioSepra is in
compliance with the applicable terms of this Supply Agreement, and which dispute
does not involve a question of law, shall be settled by final and binding
arbitration in Paris, France pursuant to the Rules of Arbitration of the
International Chamber of Commerce by one or more arbitrators appointed in
accordance with said Rules. The decision of the arbitration tribunal shall be
final, and judgment upon such decision may be entered in any competent court for
juridical acceptance of such an award and order of enforcement. Each party
hereby submits itself to the jurisdiction of the courts of the place of
arbitration, but only for the entry of judgment with respect to the decision of
the arbitrators hereunder.
IN WITNESS WHEREOF the Parties hereto have executed this Supply
Agreement as an instrument under seal by their duly authorized officers.
BIOSEPRA S.A. BIOSEPRA INC.
By: By:
----------------------------- ----------------------------------------
Name: Therese Bourdy Name: Jean-Marie Vogel
-------------------------- --------------------------------------
Title: Director General Title: President and Chief Executive Officer
------------------------- -------------------------------------
14
<PAGE> 15
SCHEDULE A
"AFFILIATE" shall mean any corporation, firm, partnership or other
entity which directly or indirectly is controlled by or is under common control
with a Party to this Supply Agreement. "Control" means ownership, directly or
through one or more Affiliates, of fifty percent (50%) or more of the shares of
stock entitled to vote for the election of directors, in the case of a
corporation, fifty percent (50%) or more of the equity interests in the case of
any other type of legal entity, status as a general partner in any partnership,
or any other arrangement whereby a Party controls or has the right to control
the Board of Directors or equivalent governing body of a corporation or other
entity. Notwithstanding the foregoing, an "Affiliate" of BSA shall not include
The Dexter Corporation and its subsidiaries other than LTI and LTI's
subsidiaries. Notwithstanding the foregoing, an "Affiliate" of BioSepra shall
not include Sepracor Inc. or its subsidiaries other than BioSepra and BioSepra's
subsidiaries.
"BIOSEPRA FIELD" shall mean intracorporeal and "on line" extracorporeal
therapy, or any autologous treatment.
"STANDARD PRODUCTS" shall mean any products
(a) produced by BSA for use in the BioSepra Field as of the date of
this Supply Agreement, and
(b) as made available by BSA to its customers other than BioSepra
following the date of this Supply Agreement (including modifications or
improvements to such product which BSA may formulate, develop or produce,
or cause to be formulated, developed or produced during the term of this
Supply Agreement)
and which fall into any of the following categories:
1. Microbeads or microparticles for vascular embolization, such as
"microspheres" sold under the trade name of"Embospheres".
2. Microbeads or microparticles made of any solid material and carrying ion
exchange charges chemically attached.
3. Microbeads or microparticles made of any solid material and carrying
chemical or biochemical ligands chemically attached that adsorb, activate
or inactivate biological molecules in vivo or ex vivo.
4. Microbeads or microparticles made of any solid material carrying reversibly
molecules of biological interest for in vivo or ex vivo use.
5. Microbeads or microparticles with a predetermined pore structure to adsorb
selectively and sterically substances in vivo or ex vivo.
6. All products for which the rights to develop, manufacture and produce such
products have been transferred to LTI from BioSepra pursuant to the Asset
Purchase Agreement.
15
<PAGE> 16
7. Trisacryl monomer DEAE, acrylamide, methylen-bis-acrylamide, paraffin oil,
porcine gelatin.
"CUSTOM PRODUCTS" shall mean all products that BSA develops,
manufactures, and sells to BioSepra that are not Standard Products, which sales
are subject to a written, countersigned schedule to this Supply Agreement which
documents the Specifications for each such Custom Product, the price, and such
other terms as the Parties agree are applicable.
"PRODUCTS" shall mean those Standard Products and Custom Products which
are sold by BSA and purchased by BioSepra pursuant to this Supply Agreement.
"KNOW-HOW" shall mean originals or copies of all laboratory notebooks
and other primary data, research, records and documentation, research plans,
proposals, conclusions, know-how, specifications and information, to the extent
any of the foregoing are recorded in any tangible form (including, without
limitation, gels, photographs, print-outs, electronic files and paper
documents), which are owned by, licensed to or in the possession of a Party and
which relate to the discovery of or are necessary or materially useful for the
manufacture of any Standard Products under this Supply Agreement, and all
intellectual and tangible property rights in the foregoing.
"SPECIFICATIONS" shall mean those specifications which the Parties use
to define the Products and which are documented in writing and countersigned.
"DRUG MASTER FILE" means a file containing information pertaining to a
Product, including but not limited to the methods of manufacture, sources of raw
materials, Specifications, and such other detail as BSA deems appropriate, which
is supplied by BSA to the U.S. Government Food and Drug Administration ("FDA"),
which file may be referenced by BioSepra in its filings with the FDA pertaining
to products made by the employment of Products.
16
<PAGE> 1
Exhibit 99.3
PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
On May 17, 1999, BioSphere Medical, Inc. ("BioSphere" or the "Company")
sold certain assets to Life Technologies, Inc. for approximately $11.2 million
in cash, including $1.0 million held in escrow, and the assumption of certain
liabilities. BioSphere utilized the proceeds to pay approximately $880,000 of
transaction costs, to repay approximately $2,000,000 of outstanding bank debt
(the "Bank Debt"), and to repay an approximately $143,000 note payable to
Sepracor (the "Related Party Note").
The following unaudited pro forma consolidated statements of operations for the
year ended December 31, 1998 and the three months ended March 31, 1999 reflect
the historical results of Biosphere for the year and three months then ended as
adjusted to give pro forma effect to the Sale as if it occurred on December 31,
1997. The following unaudited pro forma balance sheet as of March 31, 1999
reflects the historical accounts of Biosphere as of that date as adjusted to
give pro forma effect to the Sale as if it had occurred as of March 31, 1999.
The pro forma consolidated financial statements and accompanying notes should be
read in conjunction with the description of the Sale contained in the form 8K
filed by the Company on April 29, 1999. The audited historical financial
statements of the Company for the year ended December 31, 1998 which are
included in BioSphere's 1998 Annual Report on form 10K previously filed with the
Securities and Exchange Commission. BioSphere believes that the assumptions used
in the following statements provide a reasonable basis on which to present the
pro forma financial statements. The pro forma consolidated financial statements
are provided for informational purposes only and should not be construed to be
indicative of BioSphere's financial condition or results of operations had the
Sale been consummated on the dates assumed and are not intended to project
BioSphere's financial condition on any future date or results of operation for
any future period.
<PAGE> 1
EXHIBIT 99.3 (i)
BIOSPHERE MEDICAL, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1999
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
March 31, 1999
-----------------------------------
AS PRO FORMA
REPORTED ADJUSTMENTS PRO FORMA
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,416 $ 7,132 (1) $ 8,548
Accounts receivable 3,057 (2,300)(2) 757
Inventories 3,709 (3,287)(2) 422
Prepaid and other current assets 142 (115)(2) 27
------------------------------------
Total current assets 8,324 1,430 9,754
Property and equipment, net 1,392 (1,298)(2) 94
Goodwill, net 4,798 (4,798)(2) --
Other assets; including $1,000 of restricted cash on a pro forma basis 521 (513)(2) 1,008
1,000 (4)
------------------------------------
Total Assets $ 15,035 $(4,179) $ 10,856
====================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable, current portion of long-term debt
and capital lease obligations $ 2,548 $ (301)(2) $ 165
(2,082)(3)
Accounts payable 1,273 (732)(2) 541
Accrued expenses 2,318 (1,117)(2) 1,201
Related party payables 518 -- 518
------------------------------------
Total current liabilities 6,657 (4,232) 2,425
Long-term debt and capital leases, net of current portion 496 (106)(2) 329
(61)(3)
------------------------------------
Total liabilities 7,153 (4,399) 2,754
------------------------------------
Minority Interest 131 -- 131
------------------------------------
Stockholders' equity:
Common stock 85 -- 85
Additional paid-in capital 40,587 -- 40,587
Accumulated deficit (32,510) (17)(5) (32,527)
Cumulative translation adjustment (411) 237 (2) (174)
------------------------------------
Total stockholders' equity 7,751 220 7,971
------------------------------------
Total Liabilities and Stockholders' equity $ 15,035 $(4,179) $ 10,856
====================================
</TABLE>
<PAGE> 2
Notes for Pro Forma Consolidated Balance Sheet for March 31, 1999
(1) To reflect the net cash proceeds received from the Sale after repayment of
the Bank Debt and the Related Party Note.
(2) Elimination of assets, liabilities, and debt relating to and resulting
from the Sale.
(3) Payment of the Bank Debt and Related Party Note from the net proceeds.
(4) Portion of sales price held in escrow.
(5) Estimated book loss resulting from Sale.
<PAGE> 1
EXHIBIT 99.3 (ii)
BIOSPHERE MEDICAL, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
MARCH 31, 1999
--------------------------------
AS PRO FORMA PRO FORMA
REPORTED ADJUSTMENTS
<S> <C> <C> <C>
REVENUE:
Revenue from product sales $ 2,576 (2,296)(1) $ 280
Research and development 49 (49)(1) --
License fees 12 (12)(1) --
---------------------------------
Total revenue 2,637 (2,357) 280
COSTS AND EXPENSES:
Cost of products sold 1,162 (1,016)(1) 146
Sales and marketing 555 (425)(1) 130
Administration 1,515 (1,042)(1) 473
Research and development 321 (304)(1) 17
--------------------------------
Total cost and expenses 3,553 (2,787) 766
--------------------------------
LOSS FROM OPERATIONS (916) 430 (486)
OTHER INCOME (EXPENSE), NET (27) 157 (2) 130
--------------------------------
PRETAX (LOSS) (943) 587 (356)
Income Tax (18) -- (18)
--------------------------------
(LOSS) BEFORE MINORITY INTEREST (961) 587 (374)
Minority Interest (14) -- (14)
--------------------------------
NET LOSS $ (975) $ 587 $ (388)
================================
BASIC AND DILUTED NET (LOSS) PER SHARE $ (0.12) $ -- $ (0.05)
================================
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 8,437 -- 8,437
================================
</TABLE>
(1) Elimination of the revenue, costs and expenses and other income related to
the Sale.
(2) Net increase in interest income derived from investment of net proceeds
from the Sale after payment of Bank Debt and Related Party Note.
<PAGE> 1
EXHIBIT 99.3 (iii)
BIOSPHERE MEDICAL, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1998
(unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
DECEMBER 31, 1998
--------------------------------
AS PRO FORMA
REPORTED ADJUSTMENTS PRO FORMA
<S> <C> <C> <C>
REVENUE:
Revenue from product sales $ 6,996 $(6,841)(1) $ 155
License fees 120 (73)(1) 47
Research and development 283 (283)(1) --
--------------------------------
Total revenue 7,399 (7,197) 202
--------------------------------
COST AND EXPENSES:
Cost of products sold 4,124 (4,029)(1) 95
Research and development 1,299 (1,265)(1) 34
Selling, general and administrative 4,132 (2,768)(1) 1,364
Restructuring and impairment (351) 351 (1) --
--------------------------------
Total cost and expenses 9,204 (7,711) 1,493
--------------------------------
Loss from operations (1,805) 514 (1,291)
OTHER INCOME (EXPENSE), NET (8) 509 (2) 501
--------------------------------
Net loss $(1,813) $ 1,023 $ (790)
================================
Basic and diluted net loss per common share $ (0.21) $ (0.09)
================================
Basic and diluted weighted average number of common
shares outstanding 8,437 -- 8,437
================================
</TABLE>
(1) Elimination of the revenue, costs and expenses and other income related to
the Sale.
(2) Net increase in interest income derived from investment of net proceeds
from the Sale after payment of Bank Debt and Related Party Note.
