EXHIBIT 10.3
SUPPLY AGREEMENT
This SUPPLY AGREEMENT (this
“ Agreement ”) dated as of
March 25, 2009, (“Effective Date”) is by and
between OSIRIS THERAPEUTICS, INC. , a Delaware corporation
(“Osiris”), and ALLOSOURCE , an Illinois
not-for-profit corporation (“AlloSource”) (any of which
may be individually referred to herein as a “Party” and
collectively as the “Parties”).
RECITALS :
A.
Osiris is engaged in the business of
processing and manufacture of an osteobiologic allograft material
containing cancellous bone commonly known as Osteocel
® and Osteocel Plus ® (collectively, the “ Product
”) (the development, manufacturing, marketing and sale of the
Product shall be referred to herein as the “ Business
”).
B.
Pursuant to this Agreement, Osiris
and AlloSource intend that Osiris supply to AlloSource and that
AlloSource will purchase certain of Osiris’s inventory, all
on the terms and conditions contained in, and as more fully set
forth in, this Agreement.
Section 1
Purchase; No
Liabilities .
(a)
Subject to the terms and conditions
set forth herein and simultaneously with the satisfaction of the
conditions set forth in clauses (i), below (the “ Purchase
Date ”), AlloSource agrees to purchase, and Osiris agrees
to supply, free and clear of all liens, all right, title and
interest of Osiris in, to and under all Osiris’s Product
inventory which has been manufactured by Osiris in accordance with
the specifications, excluding any Product that has, as of the
Manufacturing Closing (defined below), failed any testing
requirement or any quality test and excluding any Product that
should have been discarded based on information available to Osiris
prior to the Manufacturing Closing (the “ Inventory
”). Notwithstanding the foregoing, the Inventory is
considered donated human tissue under quarantine for which donor
eligibility and product availability for distribution
determinations are not completed, prohibiting the product being
transplanted until eligibility and availability for distribution
determinations are completed as defined in Title 21 Code of Federal
Regulations part 1271. The purchase of Inventory is subject to the
following:
(i)
Osiris and NuVasive, Inc. shall
complete both the “Technology Closing” and the
“Manufacturing Closing” (as defined in the Asset
Purchase Agreement effective May 8, 2008 by and between Osiris
and NuVasive, as amended (collectively the “ APA
”)), within fifteen (15) days of the execution of this
Agreement;
(b)
AlloSource and **** acknowledge
that the Amended and Restated Tissue Procurement and Processing and
Supply Agreement and dated as of February 1, 2008 by
and
**** Portions of this page have been
omitted pursuant to a request for Confidential Treatment filed
separately with the Commission.
(continued...)
between Osiris and AlloSource shall be:
(a) assigned by Osiris to NuVasive in connection with the
Manufacturing Closing; and (b) amended, modified, supplemented
or terminated upon terms and conditions mutually satisfactory to
each of NuVasive and AlloSource.”
(c)
AlloSource shall not assume by
virtue of this Agreement or the transactions contemplated hereby,
and shall have no liability for, any liabilities of
Osiris.
(d)
Except as expressly specified
herein, Osiris shall cease processing of any new donor tissue and
shall use best efforts to complete all processing of Inventory
within five (5) days of the Effective Date.
Section 2
Purchase Price
. The “ Purchase
Price ” shall be calculated by multiplying
$**** times the number of cubic centimeters of Inventory
purchased hereunder; Three business days prior to the
Purchase Date, Osiris shall provide AlloSource with an estimated
listing and itemization of the work in progress inventory, which is
subject to inspection and verification by AlloSource, such
inspection and verification to occur upon reasonable written notice
by AlloSource to Osiris. AlloSource shall pay one third of
the Purchase Price on each of: 45, 75, and 90 days from the
Manufacturing Closing. AlloSource and Osiris shall have the
independent and bilateral right to withhold and set-off against any
amount otherwise due to be paid (but not yet paid) to each other
any amounts due from the other Party, including with respect to the
indemnity provided in Section 9.
Section 3
Osiris Representations and
Warranties .
(a)
The Inventory shall (a) conform
with the applicable specifications therefore and with all promises,
warranties or affirmations of fact set forth in regulatory
documents or made on the container or label for the Inventory;
(b) have been procured, processed, labeled, handled, packaged
and shipped in accordance with industry standards, the
specifications, all necessary quality control procedures and all
applicable laws and regulations; and (c) not infringe or
misappropriate any patent or other intellectual property right of
any third party. There is no design or manufacturing defect with
respect to the Inventory other than defects found by AlloSource
during its review and Release of the Inventory.
(b)
All documentation supplied to
AlloSource in connection with the Inventory shall, to the knowledge
of the Osiris, be accurate and complete.
(c)
All permits listed on Schedule 2.11
of the APA are in full force and effect.
(d)
Osiris is in compliance in all
material respects with all applicable laws, statutes, regulations,
rules, ordinances, standards, guidelines and judicial or
administrative orders issued
(...continued)
**** Portions of this page have been
omitted pursuant to a request for Confidential Treatment filed
separately with the Commission.
2
by the FDA or any other governmental agency or
the American Association of Tissue Banks, relating to the
Inventory. To the extent appropriate for Inventory, all Inventory
has been processed, manufactured, packaged, labeled, stored,
handled, and distributed by Osiris in compliance with Osiris
quality control standards and all applicable laws including Good
Tissue Practices and the United States National Organ Transplant
Act. None of the Inventory has been recalled or subject to a field
safety notification, and Osiris has not received written notice
(whether completed or pending) of any proceeding seeking recall,
suspension or seizure of the Inventory.
Section 4
Cooperation
. Until all of the Inventory is
Released, Osiris will cooperate and assist AlloSource with the
Release thereof. Specifically, following the Manufacturing Closing,
AlloSource will be fully res
