SUPPLY AND DISTRIBUTION AGREEMENT

EXHIBIT 10.1

SUPPLY AND DISTRIBUTION AGREEMENT

THIS SUPPLY AND DISTRIBUTION AGREEMENT (this “Agreement”), dated as of May 13, 2008 (the “Effective Date”), is entered into by and between Biopure Corporation, having offices located at 11 Hurley Street, Cambridge MA 02141 (“Biopure”) and Dechra Veterinary Products, having offices located at 7015 College Blvd., Suite 525, Overland Park, KS 66211 C Dechra”), (each, a “Party” and collectively, the “Parties ”).

RECITALS

A. Biopure currently manufactures, sells and distributes the Product (as such term is defined below).

B. Biopure desires to manufacture and sell the Product to Dechra for Dechra’s exclusive distribution and resale within the Territory, and Dechra desires to purchase the Product under this Agreement for Dechra’s exclusive distribution and resale within the Territory, pursuant to the terms and subject to the conditions of this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements and covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which the Parties hereby acknowledge, the Parties, intending to be legally bound hereby, agree as follows:

As used in this Agreement, the following terms shall have the meanings set forth in this Section 1 unless the context dictates otherwise:

1.1 “Affiliate” with respect to any Party, shall mean any entity controlling, controlled by, or under common control with, such Party, for only so long as such control exists. For these purposes, “control” shall refer to: (a) the possession, directly or indirectly, of the power to direct the management or policies of an entity, whether through the ownership of voting securities, by contract or otherwise, or (b) the ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities or other ownership interest of an entity.

1.2 “Agreement” shall have the meaning assigned to such term in the Preamble.

1.3 “Applicable Laws” shall mean all applicable laws, statutes, rules, regulations and guidelines that apply to the sale of the Product in the Territory or the manufacturing, promotion, marketing, packaging, labeling, importation, exportation, warehousing or distribution of the Product that is to be sold in the Territory or the performance of either Party’s obligations under this Agreement, including, without limitation, all applicable standards or guidelines (including the latest FDA guidance documents) promulgated by the appropriate Regulatory Authority in effect from time to time.

1.4 “Binding Quantity” shall have the meaning assigned to such term in Section 3.3.

1.5 “Biopure” shall have the meaning assigned in the Preamble.

1.6 “Breaching Party” shall have the meaning assigned to such term in Section 11.2.

1.7 “Contract Quarter” means the respective periods of three (3) consecutive calendar months during the Contract Year commencing on the first day of the first Contract Year.

1.8 “cGMP” shall mean current Good Manufacturing Practice as defined in Parts 210 and 211 of Title 21 of the Code of Federal Regulations.

1.9 “Confidential Information” shall have the meaning assigned to such term in Section 9.1.

1.10 “Contract Year” shall mean each twelve (12) month period commencing on the Effective Date, but if the Effective Date is not the first day of a calendar month, then on the first day of the first month that begins after the Effective Date. If any Contract Year is less than twelve (12) months, the rights and obligations under this Agreement that are calculated on a Contract Year basis will be proportionately adjusted for such shorter period.

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[**] = Portions of this agreement have been omitted pursuant to a confidential treatment request. An unredacted version of this agreement has been filed separately with the Commission.

1.11 “Customer” means any Third Party that purchases Product from Dechra.

1.12 “Dechra” shall have the meaning assigned in the Preamble.

1.13 “Effective Date” shall have the meaning assigned to such term in the Preamble.

1.14 “ FDA ” shall mean the United States Food and Drug Administration and any successor agency or entity that may be established hereafter.

1.15 “Field” means the veterinary market.

1.16 “Firm Order” shall have the meaning assigned to such term in Section 3.4(a).

1.17 “Forecast” shall have the meaning assigned to such term in Section 3.3.

1.18 “GAAP” shall mean generally accepted accounting principles in the United States.

1.19 “Governmental Authority” means any national, state, provincial or local or any foreign or supranational government, governmental, regulatory or administrative authority, agency or commission or any court, tribunal or judicial or arbitral body.

1.20 “Indemnitee” shall have the meaning assigned to such term in Section 10.3.

1.21 “Initial Term” shall have the meaning assigned to such term in Section 11.1.

1.22 “Manufacturing Standards” shall have the meaning assigned to such term in Section 3.2(a).

1.23 “Net Sales” means the amounts invoiced to Customers for Product which shall be equal to the selling price of the Product multiplied by the number of units of Product and shall exclude any taxes associated with the sale of such Product.

1.24 “Long-Term Inability to Supply” shall have the meaning assigned to such term in Section 3.6(b).

1.25 “Material Safety Data Sheet” shall mean the material safety data sheet used to comply with the Occupational Safety and Health Administration’s Hazard Communication Standard, 29 CFR 1910.1200.

1.26 “Minimum Purchase Amounts” shall have the meaning assigned to such term in Section 2.2.

1.27 “Non-Breaching Party” shall have the meaning assigned to such term in Section 11.2.

1.28 “Non-Conforming Product” shall have the meaning assigned to such term in Section 3.7.

1.29 “Party” and “Parties” shall have the meaning assigned in the Preamble.

1.30 “Process” shall mean the process by which Biopure shall manufacture the Product, as determined by Biopure from time to time.

1.31 “Product” shall mean the product identified on Schedule 1.31 attached hereto.

1.32 “Product Specifications” shall mean the packaging information and specifications regarding the Product attached hereto as Schedule 1.32.

1.33 “Purchase Price” shall have the meaning assigned to such term in Section 5.1.

1.34 “Regulatory Approval” with respect to the Product shall mean all Regulatory Approvals and Filings required for the marketing and sale of the Product in the Territory that have been granted, or otherwise permitted, by all appropriate Governmental Authorities.

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[**] = Portions of this agreement have been omitted pursuant to a confidential treatment request. An unredacted version of this agreement has been filed separately with the Commission.

1.35 “Regulatory Approvals and Filings” means any and all applicable approvals (including pricing and reimbursement approvals), licenses, registrations or authorizations of any Regulatory Authority (as well as any filings, data rights, rights to cross-reference and correspondence relating thereto) necessary or useful for the sale, marketing, use and distribution of the Product in the Territory, including, without limitation, any: (a) premarket approval or premarket notification of the Product, including any supplements and amendments thereto; (b) postapproval marketing authorizations (including any prerequisite manufacturing approval or authorization related thereto); (c) labeling approval; and (d) technical, medical, and scientific licenses.

1.36 “Regulatory Authority” shall mean, the Government Authority(ies) in a jurisdiction responsible for granting Regulatory Approval for the manufacture, use and sale of the Product in such jurisdiction.

1.37 “Renewal Term” shall have the meaning assigned to such term in Section 11.1

1.38 “Royalty Fee” shall have the meaning assigned to such term in Section 5.2.

1.39 “Short-Term Inability to Supply” shall have the meaning assigned to such term in Section 3.6(b).

1.40 “Term” shall have the meaning assigned to such term in Section 11.1.

1.41 “Territory” shall mean the United States and its territories and possessions.

1.42 “Testing Specifications” shall mean the testing procedures and specifications with respect to the manufacturing of the Product.

1.43 “Third Party” shall mean any person who or which is not a Party.

2.1 Appointment of Distributor for Products. Subject to Section 2.2, Biopure hereby appoints Dechra as its sole and exclusive distributor (even as to Biopure and its Affiliates) of the Product to promote, sell and distribute the Product throughout the Territory consistent with Regulatory Approvals.

2.2 Purchase Obligations. For each Contract Year during the Term, the purchase of Product from Biopure by Dechra shall meet or exceed the aggregate minimum purchase amounts set forth on Schedule 2.2 (“Minimum Purchase Amounts”). Dechra may use any purchase amounts in excess of the Minimum Purchase Amounts from the immediately prior Contract Year to satisfy a deficiency in the Minimum Purchase Amounts in a current Contract Year to remain in compliance with the Minimum Purchase Amounts requirement in this Section. In the event Dechra fails to achieve the Minimum Purchase Amounts for any Contract Year, Biopure will have the option to (i) convert the exclusive distribution rights granted in this Agreement with respect to the Product to nonexclusive rights, (ii) terminate this Agreement or (iii) waive the requirement of this Section 2.2 for such Contract Year.

2.3 Marketing and Sales Obligations.

(a) Dechra shall use its commercially reasonable efforts to actively distribute, sell and promote the sale of Product throughout the Territory. Dechra shall undertake such activities at its own expense in a manner consistent with industry practices where such activities may include utilizing subdistributors. Dechra will be responsible for distributing, selling and promoting the Product to emergency and critical care specialists, as well as general practitioners in the Field and in the Territory. Dechra will undertake, at its expense, full responsibility for all marketing and sales activities, including direct promotion and facilitation of sales to veterinarians, promotion at trade shows, development and implementation of promotional and educational programs, preparation and distribution of sales literature and other materials and all other activities customarily associated with the commercial marketing and distribution of such Product.

(b) On a quarterly basis, Dechra shall provide a summary to Biopure of all Product sold by Dechra to each end-use Customer during such Calendar Quarter and shall use commercially reasonable efforts to require its subdistributors to provide the same.

(c) Dechra shall furnish to Biopure copies of all marketing, promotional and advertising material in advance of publication.

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[**] = Portions of this agreement have been omitted pursuant to a confidential treatment request. An unredacted version of this agreement has been filed separately with the Commission.

(d) Dechra will present a marketing plan within thirty (30) days following the Effective Date and annually thereafter, with updates not less frequently than every three months, which may be telephonic or as the parties deem appropriate.

(e) Dechra shall store, handle, ship, promote, sell and market the Product in conformity with Applicable Law and with all Material Safety Data Sheets and any information and updates provided by Biopure \ pursuant to Section 3.2.

(f) Dechra shall not solicit or accept orders for the Product other than from Customers within the Territory and shall immediately forward to Biopure inquiries relating to the Product received by Dechra from outside the Territory,

(g) Dechra shall deliver all Customer orders as soon as practicable following the receipt of the order.

(h) Dechra shall conduct its business in the purchase and resale of Product as a principal for its own account and at its own expense and risk. Each Party covenants and warrants that it will not act or represent itself directly or by implication as agent for the other Party and will not attempt to create any obligation, or make any representation, on behalf of or in the name of the other Party.

(i) Neither Dechra nor an Affiliate of Dechra shall during the Term, engage directly or indirectly, whether as principal or agent or otherwise whatsoever, in the manufacture, marketing or sale of any product directly competitive with the Product in the Territory and in the Field without the express written consent of Biopure.

3.1 Biopure Sales and Marketing Materials. Upon Dechra’s request and at no cost to Dechra, subject to Section 8.4, Biopure shall transfer to Dechra sales and marketing materials relating to the Product that Biopure has readily available in its possession.

3.2 Manufacturing and Supply.

(a) Biopure shall manufacture the Product in conformity with the Process, Product Specifications, cGMP, Testing Specifications and Applicable Laws as may apply from time to time (collectively, the “Manufacturing Standards”). The Manufacturing Standards may be modified, or in any other manner changed or affected, only as provided by Section 6.3.

(b) Biopure shall store and handle the Product in accordance with the Product Specifications and Applicable Law.

(c) Biopure shall provide Dechra in written form all information and any updates thereto regarding handling precautions, toxicity and hazards associated with the Product. Biopure shall provide Dechra with the appropriate Material Safety Data Sheets and any updates thereto for the Product.

3.3 Forecasts. Dechra shall submit to Biopure, at least thirty (30) days prior to the first day of each month during the Term hereof (or for the first month only, as soon as practicable after commencement of the Contract Year but no later than ten (10) days after the commencement of the Contract Year), a twelve (12) month rolling forecast (“Forecast”) of the quantities by package size of Product Dechra expects to order during such period. Each Forecast shall be non-binding, with the exception of the first three (3) months reflected therein, which shall be considered a binding quantity (“Binding Quantity”).

3.4 Orders.

(a) Biopure shall use its commercially reasonable efforts to deliver to Dechra the Product that Dechra has ordered pursuant to a written firm order by the requested delivery date (each such order, a “Firm Order”). Each Firm Order for Binding Quantity shall be submitted by Dechra prior to the end of each applicable calendar month for which the applicable Forecast was delivered.

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[**] = Portions of this agreement have been omitted pursuant to a confidential treatment request. An unredacted version of this agreement has been filed separately with the Commission.

(b) Each Firm Order shall specify the Product, the quantity of the Product, the destination to which the Product is to be delivered and the time and manner of delivery (including the carrier to be used) in accordance with Section 3.5.

(c) As soon as practicable after the Effective Date but no later than ten (10) days after the Effective Date, Dechra shall issue a written Firm Order for Available Inventory in existence at Paragon Logistics’s Memphis, Tennessee facility in an amount not to exceed a total purchase amount of [**]. As used herein, “Available Inventory” means Product with a remaining shelf life equal to or greater than [**].

3.5 Delivery; Invoicing.

(a) Biopure shall package and label all Product as instructed by Dechra. Dechra shall be responsible for all labeling and artwork costs relating to the development of new labels, change over to Dechra’s label from Biopure’s label and any changes made to the labeling or artwork of the Product; otherwise, expense for labeling of Product on an ongoing basis shall be Biopure’s responsibility and is included within the Purchase Price of the Product. Product shall be appropriately labeled in accordance with the Product Specifications, Applicable Law, Regulatory Authority requests and Dechra’s written instructions with a traceable batch number and date of manufacture. Biopure shall ship each shipment as instructed by Dechra, F.O.B. Biopure’s facility. All freight expense and costs of insurance shall be borne by Dechra and are not included within the Purchase Price of the Product. Title to and risk of loss of Product shall pass to Dechra upon shipment of such Product in accordance with the terms of this Section.

(b) Biopure shall invoice Dechra at the time of shipment for the applicable Purchase Price for the Product then shipped. Each such invoice shall state the quantity of the Product contained in the shipment.

(c) Dechra or its designee shall confirm the quantity of the Product contained in any shipment and confirm that the Product contained in the shipment matches the lots and expiry dates contained in the certificate furnished pursuant to Section 6.1 (a). In the event the quantity of the Product shipped is greater or less than the quantity reflected in Biopure’s invoice for such shipment or there is a discrepancy between the Product and the accompanying certificate, then within ten (10) days after Dechra’s or its designee’s receipt of such shipment, Dechra shall notify Biopure concerning such overage or shortage and the amount of any invoice automatically shall be increased or reduced, as the case may be, to reflect the actual quantity of the Product contained in such shipment. The Parties will cooperate to resolve any other discrepancy described in this item (c).

3.6 Inability to Supply.

(a) Biopure shall notify Dechra: (i) as promptly as possible, but in no event more than fifteen (15) days after Biopure’s receipt of a Firm Order from Dechra or (ii) immediately upon becoming aware of an event of force majeure under Section 12 or any other cause that would render Biopure unable to supply the quantity of the Product to Dechra that Biopure is required to supply under such Firm Order. In the event of any Short-Term Inability to Supply, Dechra shall be entitled to a reduction in Minimum Purchase Amounts and Consulting Hours in proportion to the supply shortfall until such Short-Term Inability to Supply ends. In the event of any Long-Term Inability to Supply, Dechra shall not be required to purchase the Minimum Purchase Amounts set forth in Section 2.2 or the Consulting Hours set forth in Section 4.2 for the duration of the Term. In no event shall Dechra relinquish its exclusivity rights as set forth in Section 2.1 due to a Short-Term or Long-Term Inability to Supply.

(b) An “Inability to Supply” shall mean, with respect to the supply of any Product, Biopure’s failure for any reason, including without limitation force majeure reasons or otherwise, to supply Dechra with quantities of such Product equal to at least eight-five percent (85%) of the Binding Quantity of such Product for the applicable time period. A “Short-Term Inability to Supply” is an Inability to Supply Product which is reasonably expected to continue for no more than a three-month period of time. A “Long-Term Inability to Supply” is any Inability to Supply Product that is reasonably expected to exceed or actually exceeds a three-month period of time.

(c) In the event Dechra believes that any Short-Term Inability or Long-Term Inability to Supply exists, Dechra shall provide Biopure with written notice thereof, and Biopure shall make use of the internal capacity of Biopure to fill the Product supply shortfall as soon as practicable.

3.7 Returns. In the event that the Product does not conform with the applicable Manufacturing Standards and Product Specifications (as may be in effect from time to time), where such non-conformance is due to

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[**] = Portions of this agreement have been omitted pursuant to a confidential treatment request. An unredacted version of this agreement has been filed separately with the Commission.

Biopure’s acts or omissions (“Nonconforming Product”), Biopure will arrange at its sole cost and expense, for all such Non-Conforming Product to be picked up and destroyed in accordance with Applicable Law and shall deliver to Dechra a certificate of destruction signed by an authorized representative of Biopure. In addition, Biopure shall promptly replace such Product at its expense.

3.8 Status Meetings. Not less frequently than once every three (3) months, representatives of the Parties shall meet, at such times and in such places or telephonically as the Parties shall deem appropriate, to discuss manufacturing matters, work-in-progress and the Product.

4.1 Consulting Services. Upon Dechra’s request, Biopure shall provide certain consulting and technical services that shall be mutually agreed upon by the parties in writing (“Consulting Services”) . Notwithstanding any Consulting Services Dechra shall remain responsible for following its own standard operating procedures and Applicable Law.

4.2 Provider of Consulting Services; Fees. The Consulting Services shall be provided by Biopure’s employee, [**] successor (each a “Consultant”) or if no successor exists, then this Section 4 shall not apply, and neither party shall have any obligations pursuant to this Section 4. The Consulting Services shall be provided at a rate of [**] and Dechra shall pay for a minimum of (a) [**] of the Term and (b) [**] of the Term (where (a) and (b) are collectively, “Consulting Hours”). In addition, Dechra shall reimburse Biopure for reasonable, documented “out-of-pocket” business and travel expenses that are incurred by Consultant and are necessary for Consultant’s performance of the Consulting Services so long as Dechra provides its prior written approval to travel by Consultant.

5.1 Purchase Price for the Product. For purposes of this Agreement, the “Purchase Price” applicable to all orders invoiced by Biopure shall be the price as set forth on Schedule 5.1. Dechra alone shall establish its resale pricing of the Products sold to it by Biopure hereunder. Dechra shall pay all invoices duly issued by Biopure under this Agreement within thirty (30) days after the date of the applicable invoice. All invoices and payments required to be paid hereunder shall be in U.S. Dollars, and all such payments shall be made by wire transfer in immediately available funds to an account designated by Biopure, unless the Parties agree to settle such payments through other means.

5.2 Royalties payable to Biopure. Dechra shall pay to Biopure a royalty fee as set forth in Schedule 5.2 (the “Royalty Fee”). Royalty Fees shall be paid within fifteen (15) days following the end of a month on Net Sales in the preceding month.

6.1 Records; Batch Certificates.

(a) Biopure shall provide Dechra with a certificate of analysis and/or certificate of conformance for each batch of Product delivered to Dechra.

(b) Biopure shall keep records related to the handling, manufacture, packa