<PAGE>
Exhibit 10.13
PLASMA SUPPLY AGREEMENT
THIS PLASMA SUPPLY AGREEMENT (this "Agreement"), effective January
3, 2006
is made by Omrix Biopharmaceutical, Ltd., an Israeli company, with
its
principal place of business located at MDA Blood Center, Tel
Hashomer Hospital,
Tel Aviv 52621 Israel ("BUYER") and the DCI Management Group, LLC,
a limited
liability company affiliated with Hutton Medical Services, LLC,
having its
principal office at 1019 Fort Salonga Road, Suite 109, Northport,
NY 11768
("SUPPLIER") (collectively the "parties").
SUPPLIER agrees to sell and BUYER agrees to purchase Recovered
Plasma for
Fractionation and Frozen Recovered Plasma for Fractionation from
SUPPLIER as
described in Exhibit B, which is attached hereto and, incorporated
herein by
reference.
For purposes of this Agreement, "Frozen Recovered Plasma for
Fractionation"
means recovered human plasma that has been frozen within 24 hours
after
phlebotomy, and "Recovered Plasma for Fractionation" means
recovered human
plasma that has been frozen within 72 hours after phlebotomy
(collectively,
"Recovered Plasma"). During the Term (defined below) of this
Agreement and for a
period of two years thereafter, BUYER shall not directly or
indirectly purchase
any Recovered Plasma from any of the community blood banks, and/or
hospitals
(collectively, "CBBs") set forth in Exhibit A attached hereto and
made a part
hereof. This purchase restriction will cover any additional CBBs
that, upon
agreement of the parties, are added to Exhibit A. This purchase
restriction
shall not apply if SUPPLIER provides less than 50% of the Committed
Volume, and
BUYER terminates this Agreement due to such material breach of
SUPPLIER.
1. PRICES AND
VOLUMES - 2006
SUPPLIER agrees to supply BUYER a minimum of *** liters of
Recovered
Plasma from December 1, 2005 through December 31, 2006 and in each
of the
four
calendar years thereafter, ending December 31, 2010. However,
SUPPLIER
will
make its best efforts to maximize the supply up to *** liters
of
Recovered Plasma per calendar year during the Term.
The
following is the agreed to price level for 2006. This would
include
Recovered Plasma that is collected from September 1, 2005 and
stored until
December 2005. This Recovered Plasma will be billed in the year
2005 and
applied against the 2006 volumes, and will be delivered to BUYER no
later
than
March 31, 2006.
The
price for DECEMBER 1, 2005 - DECEMBER 31, 2006 will be as
follows:
The
first *** liters will be priced as follows:
Frozen Recovered Plasma for Fractionation *** per liter
Recovered Plasma for Fractionation *** per liter
PORTIONS OF THIS EXHIBIT MARKED BY AN *** HAVE BEEN OMITTED
PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE
SECURITIES AND
EXCHANGE COMMISSION.
<PAGE>
2
For
all volumes over the initial *** liters will be priced as
follows:
Frozen Recovered Plasma for Fractionation *** per liter
Recovered Plasma for Fractionation *** per liter
All
prices are FOB CBB locations.
SUPPLIER will notify BUYER in writing by no later than January 31,
2006 of
the
volume of Recovered Plasma (with a deviation of 10%) that SUPPLIER
commits to provide BUYER during 2006 (including December 2005). For
each
subsequent calendar year during the Term, SUPPLIER will notify
BUYER in
writing no later than November 15 of the prior year of the
committed volume
for
such subsequent calendar year. The volumes referred in this
paragraph
are
referred to as the "Committed Volumes."
BUYER shall not be obligated to purchase more than *** liters per
year.
If
an annual Committed Volume is less than *** liters, SUPPLIER
shall
continue during such year to make best efforts to provide ***
liters,
and
BUYER shall be obligated upon written notice from SUPPLIER to
purchase
such
additional volume, unless prior to receipt of any such notice
BUYER
notifies SUPPLIER in writing that BUYER does not, during such year,
want to
be
obligated to purchase more than the Committed Volume, which notice
shall
be
provided by BUYER no later than 90 days from SUPPLIER's notice
setting
forth the Committed Volume. Notwithstanding the foregoing, BUYER
shall not
be
required to purchase more than the Committed Volume of the
prior
calendar year plus *** (not to exceed *** liters), provided,
BUYER
notifies SUPPLIER in writing 90 days before the American
Association of
Blood Banks (AABB) annual meeting that BUYER only intends to
purchase a
Committed Volume equal to that of the prior calendar year plus
***.
In
order to assist BUYER to qualify the Recovered Plasma for
Thrombin,
SUPPLIER will, within 30 days of the date of this Agreement,
provide BUYER
from
each CBB with (i) 10 Recovered Plasma units which were separated
and
frozen after exactly 24 hours (i.e., Frozen Recovered Plasma
for
Fractionation) and (ii) 10 Recovered Plasma units which were
separated and
frozen after exactly 72 hours (i.e., Recovered Plasma for
Fractionation).
BUYER will pay for such units in accordance with the above
pricing.
Pricing for 2007 THROUGH 2010
SUPPLIER will notify BUYER in writing (the "Price Notice") of the
prices
for
Recovered Plasma applicable to the subsequent calendar year by no
later
than
November 15th of each year preceding the applicable calendar
year.
SUPPLIER will keep BUYER updated on a regular basis on the status
of price
the
negotiations between SUPPLIER and the CBBs. SUPPLIER will not
raise
prices to BUYER above the CPI (i.e., U.S. Consumer Price Index-All
Urban
Consumers, U.S. City Average, as published by the Bureau of
Labor
Statistics,
<PAGE>
3
U.S.
Department of Labor) without BUYER's written consent. The prices
set
forth in a Price Notice for a calendar year will be based on
current market
conditions. If the current market price is above the CPI adjusted
price,
then
the parties will mutually agree on the price to be charged. If
there
is a
disagreement about the price determined by SUPPLIER based upon
current
market conditions, the parties will follow Section 14, Disputes,
and the
price determined under Section 14, Disputes, will apply
retroactively to
all
purchases made by BUYER of the Committed Volume for such year. If
at
anytime, a requirement of a regulatory agency (e.g., IGIV
specification for
Omrigam) results in BUYER not being able to use a certain variety
of
Recovered Plasma (i.e., Frozen Recovered Plasma for Fractionation
or
Recovered Plasma for Fractionation) to produce and distribute
BUYER's
products, then, upon written notice to SUPPLIER, BUYER shall no
longer be
required to purchase such Recovered Plasma from SUPPLIER.
Orders for Recovered Plasma may be submitted by BUYER or
BUYER's
affiliates.
2. TERM
The
term of this Agreement will be begin on December 1, 2005 and
end
December 31, 2010, unless terminated sooner as provided under
this
Agreement (the "Term"). At the end of the Term, the contract can
be
extended with the mutual agreement of the parties for 3 years.
3. PAYMENT
Net
30 days from date of invoice, which may be issued any time
after
shipment. All payments will be wire transferred to a mutually
agreed
account. Late payment would be charged interest at 12% per annum or
1% per
month.
SUPPLIER shall invoice BUYER and BUYER shall remit payment via
wire
transfer to:
DCI
Management Group, LLC
Wachovia Bank - NA
202
Mamaroneck Ave.,
White Plains, New York, 10601
ABA
#031201467,
Account #2000011693161.
Wherever there is provision in this Agreement for a credit to
BUYER, if
such
credit cannot be fully applied to invoices within 60 days of when
the
credit arises, then such credit, or remaining balance, shall be
paid by
SUPPLIER to BUYER at the end of such 60-day period.
<PAGE>
4
4.
SPECIFICATIONS
The
CBBs will follow specifications as per attached Omrix
specifications
(see
Exhibit B attached) and all Applicable Laws (collectively,
"Specifications").
Any
exceptions to the Specifications must be mutually agreed to in
advance
and
in writing. Unless otherwise agreed in writing by the parties,
CBBs
will follow all F.D.A.
'lookback' (lookback) and post-donation
requirements. BUYER will supply exact address to send lookback
notifications and the parties will mutually agree to procedures
covering
all
lookback events, which procedures will include a full credit to
BUYER
for
any Recovered Plasma (i) that did not meet Specifications at the
time
of
collection; (ii) where there was a subsequently identified testing
issue
after collection; or (iii) the unit was recalled by the CBB. All
CBBs have
received all necessary regulatory approvals and permits under
"Applicable
Law," including, but not limited to, F.D.A. approval, required
state
licensing, and Clinical Laboratory Inspection Act (CLIA) licensure
and
approval. SUPPLIER agrees to work with the CBBs to make reasonable
efforts
to
assist BUYER to comply with requirements of the Israeli Ministry
of
Health relating to the import of the Recovered Plasma into Israel.
CBBs
will
be required to sign the BUYER's Short Supply Agreement,
attached
hereto as Exhibit C, which form may be changed by BUYER from time
to time.
The
CCBs can collect Recovered Plasma before the actual Short
Supply
Agreement date (but not earlier than September 1, 2005) as long as
they
certify that the Specifications were being followed on the date of
the
earliest bleed. As used herein, "Applicable Law" shall mean all
applicable
federal, state and local laws, rules, regulations and requirements
of
governmental and regulatory authorities, including, but not limited
to, the
FDA
investigational new drug (IND) guidelines, Title 21 of the U.S.
Code of
Federal Regulations Part 640, as amended, cGMP (defined in Exhibit
B), the
Clinical Laboratory Inspection Act (CLIA) and such other applicable
laws,
regulations, requirements, and guidelines.
5.
TRANSPORTATION
BUYER will supply shipping boxes for Recovered Plasma and will
be
responsible for their distribution to the CBBs. Desired size would
allow
16-20 units per box. If required, SUPPLIER can purchase these boxes
and
charge BUYER the cost of purchasing and transporting the boxes to
the CBBs.
Unless otherwise agreed in writing, shipments will be accompanied
by
documentation as
required by the FDA, Specifications and Applicable Law,
and
as may otherwise be specified by BUYER. The shipping boxes shall
bear
external labeling which correlate to the donation list. Each bag
of
Recovered Plasma in a shipping box shall bear, in addition to
other
required labels, a bar code label of the donation number.
The
parties will agree on a shipping schedule that will allow all CBBs
to
ship
every 2-4 weeks depending on size of the CBB and freezer capacity
at
the
CBB.
<PAGE>
5
SUPPLIER will provide BUYER each month with a rolling three month
forecast
of
the anticipated shipping schedule (total by month and type)).
BUYER assumes title to the Recovered Plasma when it is accepted on
BUYER's
behalf by BUYER's designated carrier. All transportation charges
are for
BUYER's account.
If a
shipment of any Recovered Plasma or any portion thereof fails
to
conform to the Specifications or is otherwise not as warranted,
then BUYER
shall have the right to reject such non-conforming shipment or
portion
thereof. BUYER shall give written notice to SUPPLIER of its
rejection
hereunder, setting forth in detail the basis of the rejection,
within
forty-five (45) days after receipt at BUYER's facility, specifying
the
grounds for such rejection. The nonconforming shipment or portion
thereof
shall be held for SUPPLIER's disposition, or shall be returned to
SUPPLIER,
or
destroyed if required by Applicable Law, in each case at
SUPPLIER's
expense, as directed by SUPPLIER. BUYER shall not be obligated to
buy or
pay
for any shipment which does not comply with the Specifications, or
is
otherwise not as warranted. BUYER shall receive a full credit for
any
rejected shipment, which shall include BUYER's shipping costs to
BUYER's
facility. Upon a request from BUYER, any CBB that is the source of
a
non-conforming shipments shall be removed from Exhibit A.
6. PRODUCT
As
used herein, "Recovered Plasma" shall mean "Plasma for Further
Manufacturing" (Frozen Recovered Plasma and Recovered Plasma for
further
manufacturing) as defined by the regulations of the Food and
Drug
Administration (Title 21 Code of Federal Regulation 606.3 et.
seq.), the
American Association of Blood Banks manual, and the Specifications
set
forth in Exhibit B, now or hereafter in effect, and shall have
been
collected from volunteer homologous donors and processed pursuant
to the
Applicable Laws.
All
Recovered Plasma shall be certified by the CBBs to be in
compliance
with
the Specifications, including, without limitation, having been
tested
for
viral markers/NAT-PCR, as listed in Exhibit B. This Agreement
is
subject to CBB compliance with any and all test requirements
currently and
hereafter mandated by Applicable Law.
SUPPLIER warrants and covenants that all Recovered Plasma delivered
under
this
Agreement meets the Specifications contained in Exhibit B.
BUYER
assumes full responsibility for the storage, handling,
processing,
manufacturing, sale and use of the Recovered Plasma upon
SUPPLIER's
delivery to BUYER.
BUYER shall only be responsible for any loss, destruction or damage
to the
Recovered Plasma at all times that such Recovered Plasma is in the
care,
custody and control of BUYER (including its agents and
contractors).
<PAGE>
6
Notwithstanding any other agreements, each party agrees to hold
harmless
and
indemnify the other party (including its affiliates, and each of
their
respective directors, officers, agents, and employees) against,
and
reimburse the indemnitees for, any and all claims, demands,
actions, causes
of
action, losses, judgments, damages, costs and expenses
(including
reasonable attorney's fees) arising out of any claim against an
indemnitee
(i)
in respect to bodily injury, death, and property damage to the
extent
arising from the acts or omissions of the indemnifying party, (ii)
a
party's violation of any Applicable Law; or (iii) any breach by a
party of
any
of its representations, warranties, covenants or agreements in
this
Agreement. At the indemnified party's option, the indemnifying
party shall
also
defend the indemnified party, and in such case, shall have sole
control of the defense and settlement, provided that any settlement
must be
agreed to by the indemnified party.
This
obligation to indemnify is conditional upon the party seeking to
be
indemnified providing the other party with prompt written notice of
any
claim or action for which the first party seeks to be indemnified.
Each
party agrees to cooperate in providing information necessary to
defend
against any such legal liability.
Each
party agrees to maintain general and professional liability
insurance,
each
in the amount of at least One Million dollars ($1,000,000)
combined
single limit, and to provide copies to the other party of
certificates of
such
insurance upon request.
BUYER and SUPPLIER, on their own behalf, acknowledge and agree that
each
shall inform the other of any third party claim related to this
Agreement
and
involving the other party as soon as it becomes aware of such
claim.
7. OTHER
All
notices, communications, demands, and payments required or
permitted to
be
given or made hereunder or pursuant hereto shall conclusively
be
presumed for all purposes of this Agreement to be given or made
by
certified mail or overnight courier service, addressed as
follows:
BUYER: Omrix
Biopharmaceuticals, Ltd
MDA Blood Center, Tel Hashomer
Hospital, Tel Aviv 52621 Israel
Attn: Robert Taub
President and CEO
SUPPLIER: DCI
Management Group, LLC
1019 Ft. Salonga Road
<PAGE>
7
Suite 109
Northport, NY 11768
Attn: Ira London
Vice President of Marketing
Each party will appoint a contact person to handle all logistics
and quality
issues.
8. GOVERNING
LAW
Without giving effect to the conflict of law provisions, this
Agreement
will
be governed and construed in accordance with the laws of the State
of
New
York.
9. TERMINATION
FOR DEFAULT
Either party may terminate this Agreement by written notice to the
other
party if such other party materially fails to perform or
materially
defaults in any manner in the performance of this Agreement in
accordance
with
its terms, and fails to cure any such breach after receiving a
"Show
Cause Notice" identifying the failure, and providing thirty (30)
days to
cure
the failure or nonperformance. However, if the claimed failure
to
perform or other default is the subject of a bona fide dispute
between the
parties, then the parties agree to refer the dispute to the
informal
dispute escalation process under Section 14 of this Agreement and
that the
30-day cure period shall be waived pending the outcome of that
process.
BUYER may terminate this Agreement upon written notice if a
regulatory
action or decree prevents BUYER from performing the manufacture
and/or
distribution of the end products (i.e., Omrigam NF) derived from
the
Recovered Plasma. In the event of a termination, the parties agree
to cease
all
further purchases. The BUYER's liability to SUPPLIER in the event
of
termination will continue only with respect to goods and/or
services
received and accepted within thirty (30) days after the effective
date of
termination.
Neither party will be liable for failure to perform due to
unforeseeable
causes beyond such party's control and without such party's fault
or
negligence, such as acts or omissions by the other party, fires,
floods,
epidemics, quarantine restrictions, strikes, freight embargoes,
war, an act
of
governmental or quasi-governmental authorities, restrictions of law
or
of a
court of competent jurisdiction.
The
rights and remedies of either party provided in this paragraph are
not
exclusive and are in addition to any other rights and remedies
provided by
law
or under this Agreement.
<PAGE>
8
10. INDEPENDENT
CONTRACTOR
SUPPLIER is furnishing its services hereunder as an independent
contractor,
and
nothing herein will create any association, partnership or
joint
venture between the parties hereto, or any employer-employee
relationship.
11.
CONFIDENTIALITY
Each
party may designate any or all information, data, written
and/or
verbal communications developed, accessed, provided, or referenced
during
the
performance of this Agreement as Confidential.
The
BUYER and SUPPLIER acknowledge and agree that if during the Term
of
this
Agreement such information is designated confidential and is
disclosed
by
one party to the other, each party will hold all such
confidential
information in the strictest confidence as a fiduciary and will
not
voluntarily sell, transfer, publish, disclose, display or otherwise
make
available to any third persons such confidential information or any
portion
thereof without the express written consent of the other party or
use such
information except in the performance of this Agreement. The BUYER
and
SUPPLIER will each use their best efforts to protect the
confidentiality of
all
such information consistent with the manner in which they protect
their
most
confidential business information.
For
the purposes of t
