<PAGE>
Exhibit 10.18
SUPPLY AGREEMENT
BY AND BETWEEN
OMRIX BIOPHARMACEUTICALS, LTD,
TEL AVIV, ISRAEL
AND
TALECRIS BIOTHERAPEUTICS, INC.
RALEIGH, NORTH CAROLINA, USA
Page 1 of 30
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>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S>
<C>
SECTION 1 TERM OF AGREEMENT
4
SECTION 2 PURCHASE AND SALE OF CRYO
4
2.1 Volume Requirements
4
2.2 Forecasts
5
2.3 Right of First Refusal
5
2.4 Purchase Orders
6
2.5 Shipments
6
2.6 Cooperation of the Parties
6
2.7 Meetings
7
SECTION 3 QUALITY AND SPECIFICATIONS
7
3.1 Specifications
7
3.2 Testing
7
3.3 Acceptance
7
3.4 Latent Defects
7
3.5 Records
8
3.6 Alternate Facility
8
SECTION 4 PRICE AND PRICE ADJUSTMENT
8
4.1 Price
8
4.2 Adjustment to Price
8
4.3 Price Adjustment Calculation
8
SECTION 5 BILLING AND PAYMENT
8
5.1 Payments
8
5.2 Payment Disputes
9
SECTION 6 REGULATORY REQUIREMENTS
9
6.1 Compliance with Regulations
9
6.2 Audit
9
6.3 Regulatory Approvals
9
SECTION 7 NONCONFORMING CRYO AND RECALLS
10
7.1 Nonconforming Cryo
10
7.2 General Requirements
10
7.3 Distribution and Use Records
10
7.4 Adverse Events
10
7.5 Customer Notification of
Adverse Reactions
10
7.6 Withdrawals and Recalls
11
7.7 Complaints
11
SECTION 8 FORCE MAJEURE
11
SECTION 9 REPRESENTATIONS AND WARRANTIES AND DISCLAIMER
11
9.1 Regulatory Requirements
11
9.2 Debarment
11
9.3 Compliance
12
9.4 Intellectual Property
12
9.5 Representation and
Warranties
12
9.6 Disclaimer
14
SECTION 10 TERMINATION
14
10.1
Termination for Cause
14
10.2
Termination for
Talecris' Force Majeure
14
10.3
Other Termination
Provisions
15
10.4
Effect of Termination
15
10.5
Remedies
15
10.6
Survival
15
</TABLE>
Page 2 of 30
<PAGE>
<TABLE>
<S>
<C>
SECTION 11 INDEMNIFICATION
15
11.1
Indemnification:
Talecris
15
11.2
Indemnification:
Customer
16
11.3
Joint Responsibility
16
SECTION 12 CONFIDENTILITY
16
12.1
Confidentiality
Obligations
16
12.2
Exceptions
16
12.3
Other Confidentiality
Agreements
16
SECTION 13 INSURANCE
17
SECTION 14 MISCELLANEOUS
17
14.1
Consent to Assignment
17
14.2
Entire Agreement and
Amendments
17
14.3
Notices
17
14.4
Independent Contractor
18
14.5
Non-Waiver
18
14.6
Choice of Law
18
14.7
Captions
18
14.8
Severability
19
14.9
Dispute Resolution
19
14.10 Set Off
20
14.11
Conflicting Terms
20
</TABLE>
Page 3 of 30
<PAGE>
SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (this "AGREEMENT") is entered into as of
September, 2006
(the "EFFECTIVE DATE"), by and between Talecris Biotherapeutics,
Inc., with
offices at 4101 Research Commons, 79 T. W. Alexander Drive,
Research Triangle
Park, North Carolina 27709 ("TALECRIS") and Omrix
Biopharmaceutical, Ltd., an
Israeli company, with its principal place of business located at
MDA Blood
Center, Tel Hashomer Hospital, Tel Aviv 52621 Israel ("CUSTOMER").
Customer and
Talecris are the ("PARTIES").
WITNESSETH
WHEREAS, Talecris is engaged in the manufacture and distribution
of
plasma-derived biological products;
WHEREAS, Talecris fractionates plasma into biological products at
its Precision
Pharma Services facility and one of the components of the
fractionation process
is a licensed intermediate blood fraction known as Cryoprecipitate
("CRYO");
WHEREAS, Customer is in the business of producing and selling
fibrin sealant
products (the "Products");
WHEREAS, Customer desires to purchase from Talecris Cryo derived
from plasma
fractionated at the Precision Pharma Services, Inc.'s ("Precision
Pharma
Services") facility located in Melville, New York (the "Precision
Pharma
Services Facility") to be qualified with various Regulatory
Authorities (as
defined herein) for use in the manufacture and development of the
Products; and
WHEREAS, Customer and Talecris wish to set forth their mutual
agreements and
understandings regarding the sale by Talecris and the purchase by
Customer of
the Cryo hereunder.
NOW, THEREFORE, for and in consideration of the premises and the
mutual
covenants contained herein, and other good and valuable
consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Parties hereto do
hereby agree as follows:
SECTION 1 TERM OF AGREEMENT
This Agreement shall have an initial term commencing on the
Effective Date and
ending on December 31, 2007 ("Initial Term"), unless earlier
terminated as
provided in Section 10 or otherwise in this Agreement. In the event
that (i)
Customer obtains US FDA approval for use of the Cryo in the
Products or Customer
is prepared to assume the Required Quantity obligations of Exhibit
A without
such approval and (ii) Talecris has broadly implemented HAV testing
on source
plasma during this time period (the occurrence of the fulfillment
of the
conditions of clauses (i) and (ii), will initiate the "Commencement
Date"), then
the Initial Term shall be extended by three (3) years from the
Commencement
Date. The Initial Term may be renewed for two consecutive two (2)
year periods
at the option of Customer. Customer must give Talecris at least one
(1) year's
written notice prior to the end of each expiring term of its intent
to renew
(each an "EXTENDED TERM", along with the Initial Term, the
"TERM").
SECTION 2: PURCHASE AND SALE OF CRYO
2.1 Volume Requirements. With respect to each twelve (12) month
period during
the Term, effective with issuance of the initial forecast described
in Section
2.2, Talecris shall make available to Customer, and Customer shall
purchase, the
volumes of Cryo set forth in EXHIBIT A, attached hereto (the
"REQUIRED
Page 4 of 30
<PAGE>
QUANTITY"). Such volumes may be adjusted as set forth in Section
2.3 and 2.4.
Upon providing a notice of renewal for an Extended Term in
accordance with
Section 1, the Required Quantity for the Extended Term shall not be
less than
the Required Quantity set forth in EXHIBIT A. All volumes of Cryo
to be sold to
Customer shall be determined after deducting quantities
representing
Nonconforming Cryo (as defined in Section 7.1 below).
2.2 Forecasts. Within thirty (30) days of the Commencement Date,
Customer shall
provide Talecris with an initial twelve (12) month rolling forecast
of
Customer's estimated requirements of Cryo by calendar month. Such
forecast shall
be deemed attached and incorporated hereto as EXHIBIT B. Customer
shall provide
an updated rolling twelve (12) month forecast on or about the
commencement of
each calendar month, in form as set forth in EXHIBIT B. Subject to
Sections 2.3
and 2.4, the first six (6) months of each rolling twelve (12) month
forecast
shall be a firm binding order (a "BINDING FORECAST"). Talecris
agrees to deliver
Cryo in the quantities ordered hereunder within 5% of the requirements of
the Binding Forecast (a "DELIVERY DEVIATION"), on such delivery
dates as are
specified in the Purchase Orders issued by Customer pursuant to
Section 2.5.
Notwithstanding the above, the Delivery Deviation will not
accumulate to more
than 10% over any three (3) month period. The Parties agree and
acknowledge
that, only after Customer obtains approval from the FDA for use of
the Cryo on
the Products, shall Customer be obligated to purchase the Cryo. To
the extent
that the aggregate volume of Cryo purchased by Omrix in any
(twelve) 12 month
period after the Commencement Date (each, an "Anniversary Year")
does not at
least equal the Required Quantity applicable to such Anniversary
Year, Talecris
may, within thirty (30) days of the end of such year, invoice
Customer for the
total price attributed to such difference (based on the Price set
forth in
Section 4 below) and deliver to Customer the invoiced Cryo in
accordance with
Section 2.6. Except as otherwise provided under Section 2.3,
forecasts for
volumes exceeding the Required Quantity shall require the prior
written approval
of Talecris.
2.2.1 On an annual basis starting within thirty (30) days after the
Effective
Date, and at least six (6) months prior to the beginning of each
Anniversary
Year, Talecris shall provide Customer with written notice of the
total quarterly
volumes of Cryo to be manufactured and made available during the
following year
(the "AVAILABLE QUANTITY"). Upon six (6) months prior written
notice, Customer
may (i) increase the Required Quantity by an amount up to the
Available Quantity
and applicable Purchase Orders shall be adjusted to account for
such increase,
or (ii) if prior to the Commencement Date, Customer may issue a
Purchase Order
for up to the Available Quantity.
2.3 Right of First Refusal
2.3.1 Fee. Upon payment of one million dollars ($1,000,000), and
the five (5)
subsequent payments on the anniversary of the Effective Date of
this
Agreement of one hundred thousand dollars ($100,000) for the
remainder of
the
Term ("ROFR Fee"), Talecris grants Customer a right of first
refusal
("ROFR") during the Term for additional Cryo as detailed below.
2.3.2 Available Quantity. Within thirty days (30) days prior to the
beginning of
each
calendar year Talecris shall provide Customer with written notice
of
the
total Cryo not already subject to an existing contractual
obligation
that
Talecris expects to manufacture and make available to third
parties
for
that upcoming year ("Available Quantity"). The Available Quantity
shall
be
updated and communicated in writing to Customer (each an "Update")
upon
the
following occurrences: 1) six months from the original forecast
for
that
year, and 2) if Talecris intends to provide greater volumes of Cryo
to
third parties than those specified in the last Available Quantity
forecast
or
Update submitted to Customer.
2.3.3 Purchase Right. Customer shall have fifteen (15) days upon
receipt of the
Available Quantity or any subsequent Update to purchase all or part
of the
available Cryo at the then
Page 5 of 30
<PAGE>
current price per kilogram called for in this Agreement. Whatever
volumes
Customer has not elected to purchase Talecris shall be free to
dispose of
in
its sole discretion. Any additional Cryo Customer purchases
pursuant to
this
ROFR shall be added to Customer's binding forecast and minimum
volume
obligations.
2.3.4 Refund of ROFR Fee. If Talecris does not routinely implement
HAV testing
by
December 31, 2007, Talecris shall either a) provide HAV testing for
all
Cryo
purchased by Customer at no additional cost to Customer, or b)
will
refund entire ROFR Fee paid by Customer. Furthermore, if (i) If
Cryo does
not
receive FDA approval and Customer has not exercised any of its
rights
under the ROFR during the Term, or Talecris makes changes to the
batch
production records or the Specification, as described in Section
3.1, such
that
the Cryo is no longer in compliance with the FDA approval received
by
Customer, and Customer did not receive FDA approval for such
batch
production record or Specification change, (ii) Customer terminates
this
Agreement pursuant to Section 6.2, or (iii) Talecris ceases to
manufacture
Cryo, then Talecris shall pay Customer the pro rata share of the
RFR Fee
equal to the ratio between (A) the period since the Commencement
Date and
the
date of termination, and (B) six (6) years.
2.3.5 Exclusion of Cryo. For purposes of clarification, Cryo sent
to third party
toll
manufacturers for the benefit of Talecris (i.e., not sold to
such
third parties), are not subject to the ROFR provisions contained
herein.
2.4 Purchase Orders. Within thirty (30) days after the Commencement
Date,
Customer shall deliver to Talecris a purchase order reflecting the
aggregate
Cryo volume in the initial Binding Forecast and with each
subsequent forecast
set forth in Section 2.2 above, Customer shall deliver a purchase
order
reflecting the aggregate Cryo ordered for the six (6) months of the
Binding
Forecast (in each case, a "PURCHASE ORDER"). Each Purchase Order
shall specify
the volumes of Cyro ordered and the delivery dates. The Parties
shall cooperate
to ensure that the Cryo to be purchased by Customer is ordered in a
manner so as
to reasonably allow Talecris to produce such Cryo efficiently,
without material
swings in volume over the course of any twelve (12) month
period.
2.5 Shipments. Talecris agrees that it shall provide Cryo in
conformance with
the delivery schedule provided by Customer based on issued Purchase
Orders.
Talecris shall include copies of production and test records with
each shipment
as specified in the Specifications (EXHIBIT C). Customer shall be
responsible
for making the necessary shipping arrangements. All Cryo purchased
and sold
hereunder shall be delivered Ex Works (Precision Pharma Services
Facility)
(INCOTERMS 2000). Risk of loss for Ciyo in transit shall lie with
Customer. All
financial arrangements for shipping and handling of Cryo shall be
the
responsibility of Customer.
2.6 Cooperation of the Parties. Talecris shall inform Customer
promptly of any
problems that could reasonably be expected to prevent Talecris from
providing
timely deliveries of Cryo and the Parties shall cooperate in
resolving such
problems relating to the manufacture and supply of Cryo under this
Agreement.
The Parties shall use their commercially reasonable efforts to
coordinate
maintenance outages and shut-downs of Customer's facility and
Precision Pharma
Services Facility, which coordination could include making
temporary changes to
the Binding Forecast. Consistent with Section 6.3 below, Talecris
will provide
reasonable support to Customer in response to any questions raised
by
"Regulatory Authorities" (i.e., all applicable governmental and
regulatory
authorities, including, but not limited to, the FDA, subject to
Section 6.1)
regarding the production of Cryo at the Precision Pharma Services
Facility. For
purposes of clarification, this Section 2.7 does not diminish or
expand the
Parties' respective aggregate obligations over any 12- month period
to supply
and purchase Cryo in accordance with the Binding Forecast set forth
in
Page 6 of 30
<PAGE>
Section 2.2. If Talecris fails to deliver Cryo in accordance within
a delivery
schedule, and is unable to make up the quantity in a rolling three
(3) month
period, set forth in a Purchase Order, then for each week of delay
beyond such
three (3) month period from the delivery schedule date, the Price
for the
undelivered quantity shall be reduced by five percent (5%) per each
additional
week of delay.
2.7 Meetings. Unless otherwise mutually agreed, the manufacturing
representative
of each Party shall meet (either in person or via conference call)
no less than
monthly to discuss the forecasts delivered by Customer pursuant to
this
Agreement and other matters relevant to the supply of Cryo
hereunder. In
addition, a senior manager of each Party shall meet (either in
person or via
conference call) on a quarterly basis to discuss matters relevant
to the supply
of Cryo hereunder. At least three (3) business days prior to each
meeting, each
Party shall deliver to the other Party a written report regarding
the issues to
be discussed at such meeting.
SECTION 3 QUALITY AND SPECIFICATIONS
3.1 Specifications. Talecris shall manufacture, process, store,
distribute,
test, transport, dispose and otherwise handle Cryo at all times in
compliance
with cGMPs (as defined in Section 6.1) and other applicable
Regulations (as
defined in Section 6.1 below), the Cryo Specifications and
Requirements
(attached hereto as EXHIBIT C and incorporated herein by reference
the
"SPECIFICATIONS"), and the SOPs as defined in Sections 6.2. All
Cryo shall be
produced only at the Precision Pharma Services Facility. The
Specifications
shall be renewed annually, consistent with the Term of this
Agreement, with each
such renewal deemed attached hereto as EXHIBIT C and incorporated
herein by
reference. In the event of a conflict between the provisions of
this Agreement
and the provisions of the Specifications, the provisions of this
Agreement shall
prevail. Talecris/Precision shall not make changes to the key
process parameters
EXHIBIT D that require prior approval from the FDA or the
Specifications without
prior reasonable notice to Customer, which prior notice shall be at
least six
(6) months unless otherwise required by a regulatory body. Such
notice shall be
sufficiently prior to implementation of the changes so as to allow
Customer to
amend its regulatory filings and to purchase additional inventory
of Cryo. The
key process parameters in effect at the Precision Pharma Services
Facility as of
the Effective Date are set forth in EXHIBIT D, attached hereto. If
Talecris
changes to EXHIBIT D or the Specifications in such a manner that
the Cryo will
no longer be in compliance with the FDA approval received by
Customer, then
Customer may upon written notice terminate this Agreement.
Additionally, the
Customer agrees to the terms and conditions set forth in the
Manufacturing
Agreement, attached hereto as EXHIBIT E.
3.2 Testing. With respect to each shipment of Cryo to be shipped to
Customer,
Talecris shall test such Cryo to ensure compliance with the
Specifications.
Talecris shall include a certificate of analysis ("COA") as well as
all other
documentation described in the Specifications with each shipment of
Cryo
disclosing the results of such testing and showing conformance with
the
Specifications. Customer shall not perform any additional testing
for human
pathogens (Nucleic Acid Testing (NAT) or otherwise) on the Cryo or
any
derivatives therefrom without the prior written authorization of
Talecris unless
this testing is approved by both parties and is listed in the
Specifications.
3.3 Acceptance. Subject to Section 3.4 below, Customer shall have a
period of
thirty (30) days from date of its receipt of a shipment of Cryo at
Customer's
Israel plant to inspect the delivered Cryo and the accompanying COA
(and
documentation described in EXHIBIT C) and reject all or part of
the
corresponding shipment of Cryo for nonconformity with the
Specifications. If
Customer rejects all or part of such shipment, it shall promptly
notify Talecris
and the provisions of Sections 7.1 below shall apply.
Page 7 of 30
<PAGE>
3.4 Latent Defects. If after accepting a shipment of Cryo, Customer
subsequently
discovers latent material defects (including without limitation,
nonconformance
to the Specifications) not reasonably discoverable during the
acceptance period
set forth in Section 3.3, Customer may revoke its acceptance of
such shipment of
Cryo by giving written notice and disclosing the nature of any
defects to
Talecris as soon as practicable after discovering such defects. In
such event,
such Cryo shall be considered a Nonconforming Cryo (as defined in
7.1) to the
extent latent material defects in fact are present and the
provisions of Section
7.1 below shall apply.
3.5 Records. Talecris shall maintain production records and other
records
required by cGMPs and the Regulations for such time periods
referenced thereby.
Talecris shall make such records available to Customer for
Customer's inspection
promptly following a written request by Customer.
3.6 Alternative Facility. Talecris represents and warrants that
Talecris has no
current plans for closing the Precision Pharma Services Facility
during the
Term. If at anytime during the Term, Talecris decides to close the
Precision
Pharma Services Facility, then (1) Talecris will provide Customer
with twelve
(12) months notice prior to such closing to allow Customer to
purchase
additional inventory of Cryo and (2) the parties will negotiate in
good faith
terms for transferring the manufacturing of Cryo to an alternative
Talecris
facility, which terms shall include allocation of costs necessary
for enabling
such alternative facility to manufacture Cryo in accordance with
this Agreement,
and Customer's requirements assuming a shared manufacturing
arrangement may be
put into place between Omrix and the new manufacturing facility. If
the parties
are unable to negotiate an alternative facility, then Customer may
terminate
this Agreement upon written notice. Additionally, if Talecris
transfers
ownership or control of the Precision Pharma Services Facility,
Talecris shall
require the transferee to be bound by the terms of this Agreement,
on the same
terms and specifications as applicable to Talecris and Precisions
Pharma
Services.
SECTION 4 PRICE AND PRICE ADJUSTMENT
4.1 Price. During the Term of this Agreement, Customer shall pay
*** per kg of
Cryo for any Cryo purchased hereunder, as adjusted pursuant to
Section 4.2 below
("PRICE"). All payments hereunder shall be made in U.S. Dollars. If
Cryo from
Precision Pharma Services receives EU regulatory approval, Customer
shall have
the option to purchase such Cryo for the European market and the
Price for such
Cryo to be sold into the European market shall be *** per kg.
4.2. Adjustment to Price The Price shall be adjusted annually by
Talecris on the
first day of each Anniversary Year. Such adjustment to Price (the
"PRICE
ADJUSTMENT") shall reflect the change in the CPI-U or increases in
acquisition
cost of raw material, which ever is the greater number. For
purposes of the
foregoing, "CPI-IF shall mean the unadjusted percentage change for
the previous
twelve-month period as published in the Consumer Price Index for
all urban
consumers by the U.S. Department of Labor, Bureau of Labor
Statistics. For the
avoidance of doubt, the first such Price Adjustment shall become
effective at
the end of the first Anniversary Year.
4.3 Price Adjustment Calculations. On the first day of each
Anniversary Year or
as soon thereafter as possible, Talecris shall provide for
Customer's review and
approval the computation of the Price Adjustment (as determined in
accordance
with Section 4.2 above) to be applied in the following Anniversary
Year, and the
methodology used in making such computation. Disagreements as to
the adjustment
calculation shall be resolved in accordance with Section 14.9.
Page 8 of 30
<PAGE>
SECTION 5 BILLING AND PAYMENT
5.1 Payments. Talecris shall deliver to Customer at the address set
forth in
Section 14.3 an invoice for shipments of Cryo to Customer as the
same is
shipped. Each invoice shall reflect the actual quantity of the Cryo
shipped and
the price thereof, as computed in accordance with Section 4. The
amount invoiced
by Talecris and payable by Customer during each Binding Forecast
period will not
be less than that charge associated with such Binding Forecast, as
computed in
accordance with Section 4, unless the actual Cryo delivered is less
than the
Binding Forecast due to a Delivery Deviation or Talecris' failure
to perform its
obligations under this Agreement, including due to Nonconforming
Cryo. Within
thirty (30) days following the receipt of such invoice, Customer
shall pay to
Talecris the amount specified therein.
5.2 Payment Disputes. All billing and payment disputes between
Customer and
Talecris shall be resolved in accordance with Section 14.9
below.
SECTION 6 REGULATORY REQUIREMENTS
6.1 Compliance with Regulations. Talecris shall comply in all
material respects
with all applicable laws, requirements, regulations, guidelines,
licenses and
directives, including applicable current Good Manufacturing
Practices ("CGMPS")
as defined in national and international laws and internationally
accepted GMP
compendia including PIC/C and WHO GMP Guide, including all
specifications and
procedures for plasma sourcing, plasma testing, and in process
testing and all
regulations, specifications, and procedures contained therein, as
well as the
contract manufacturing arrangements described in the CBER:
"Guidance for
Industry Cooperative Manufacturing Arrangements for Licensed
Biologics and
specifically all requirements under section V "Shared
Manufacturing
Arrangements" (collectively, "REGULATIONS"). These shall include
all applicable
US FDA laws, requirements, regulations, guidelines, licenses and
directives,
including applicable cGMPs and FD&C Act (21 USC 301). Talecris
commits to
promptly inform Customer of any FDA citation of a deviation from
cGMP that may
impact the ability to meet all Specifications of Cryo.
6.2 Audit. Customer shall have the right, on reasonable written
advance notice,
and during normal business hours, to inspect and audit the
Precision Pharma
Services Facility, and any other Talecris owned facility involved
in the
production of Cryo, Standard Operating Procedures (as in effect as
of the
Effective Date and amended from time to time upon mutual agreement
of the
Parties, and any replacement or successor thereof, "SOPS"),
production,
operations, testing, storage and books and records to confirm
compliance with
Section 6.1 and Talecris compliance with the terms and conditions
of this
Agreement, provided that such inspection or audit does not
unreasonably
interfere with the conduct of business of Talecris. Talecris shall
use its
commercially reasonable efforts to accommodate any reasonable
request made by
Customer to inspect such facility. Talecris shall respond in
writing to Customer
regarding any items of noncompliance identified by Customer during
such
inspections or audits within fifteen (15) days of Customer's notice
thereof and
shall develop a plan, reasonably satisfactory to Customer, to
remedy any such
items of noncompliance within sixty (60) days of notice thereof and
shall remedy
such items of noncompliance as set forth in such plan, the failure
of which
shall entitle Customer to terminate this Agreement in accordance
with Section
10.1 hereof. Provided, however, at the election of either party,
any dispute
concerning compliance or non-compliance can be referred to
arbitration in
accordance with Section 14.9.
6.3 Regulatory Approvals. Talecris/Precision is responsible for
maintaining the
FDA license for the cryo intermediate. Customer is solely
responsible for
obtaining and maintaining all necessary regulatory approvals from
all Regulatory
Authorities necessary to sell and market the Products. Talecris
shall, upon
request by Customer, and as reasonably necessary, promptly (in any
case, not
longer than thirty (30) days of any such request) provide a plan
detailing when
and how all documents or information requested by Customer to
support Customer's
efforts to obtain, maintain, or defend the regulatory approvals
necessary to
sell the Products in the US will be provided to the Customer.
Page 9 of 30
<PAGE>
Furthermore, the price of the Cryo includes cost associated with
fair and
reasonable efforts by Talecris to assist Customer in obtaining US
FDA Regulatory
approval. Any information or documents that are not generated as
part of
Talecris' normal business practices will be provided at a cost to
the Customer.
In the event that the Customer requires additional regulatory
support from
Talecris, regulatory support may be provided at an hourly rate of
$250 (US
dollars).
SECTION 7 NONCONFORMING CRYO AND RECALLS
7.1. Nonconforming Cryo. In the event that Talecris provides Cryo
that does not
meet the Regulations or does not conform to the Specifications, or
contains
latent defects, or that has not been manufactured, processed,
stored,
distributed, tested, transported, disposed of or otherwise handled
in accordance
with applicable SOPs, the Specifications, cGMPs and the
Regulations
("NONCONFORMING CRYO"), Talecris will at no cost to Customer, and
within ninety
(90) days, replace such Nonconforming Cryo with an equivalent
amount of
conforming Cryo. If not so replaced, then such Nonconforming Cryo
will be
considered a delayed delivery, and the penalties set forth in
Section 2.7 will
begin after such ninety (90) day period.
Upon discovery of Nonconforming Cryo, Customer will immediately
notify Talecris
of the identification of the Cryo that is rejected by the Customer.
The reason
for the rejection will be provided to Talecris. An investigation
will be
initiated at Talecris to determine if they concur with the
Customer's rejection
and to determine the cause of the Nonconformance. Talecris may
request a visit
to the Customer's facility to inspect the Cryo, to sample the Cryo
or other
investigational activities as necessary. Talecris must initiate
their internal
investigation within fifteen (15) days of notification of
Nonconformance from
the Customer.
If Talecris agrees that the material in Nonconforming, Talecris
will provide a
written notification to the Customer to destroy the Cryo. The
Customer will not
destroy the Cryo without receiving written notification from
Talecris.
If Talecris does not agree that the product is Nonconforming and
the Customer
and Talecris cannot agree to acceptability a third party arbitrator
will
determine the final disposition.
7.2 General Requirements. Customer shall maintain accurate records
of the
quantities of Cryo received and the intermediate and final
commercial Products
derived from such Cryo.
7.3 Distribution and Use Records. Talecris/ Precision shall
maintain and give
Customer access, upon advance notice and at reasonable times, to,
production,
donor records and test results with respect to each unit of plasma
included in
Cryo delivered to Customer. Such records and results shall be
maintained such
that they can rapidly and unequivocally be accounted for and made
available to
Customer within fourteen (14) days from the date of request. All
such records
will be maintained by Talecris for a time period at or greater than
required by
the FDA. Customer shall maintain and give Talecris access, upon
advance notice
and at reasonable times, to, records identifying the use of each
lot of Cryo and
the Products from which such Cryo was processed. Such records shall
be
maintained such that the use of each lot of Cryo can be rapidly
and
unequivocally accounted for and made available to Talecris within
fourteen (14)
days from the date of request. All such records will be maintained
by Customer
for a time period at or greater than required by the FDA. Customer
shall assist
Talecris in identifying, tracking and controlling the use of any
Cryo identified
in post-donation information as contaminated or otherwise
unsuitable for
processing into Products.
7.4 Adverse Events. Customer shall record and investigate all
reports of adverse
events in which Products manufactured from Cryo have been
implicated. If
Customer determines that a Cryo lot has caused adverse reactions as
a result of
such Cryo being manufactured using Cryo, Customer shall
immediately
Page 10 of 30
<PAGE>
notify the applicable Regulatory Authorities as required by the
Regulations, and
shall promptly notify Talecris. Talecris shall promptly notify
Customer of any
adverse event resulting in a market withdrawal or recall involving
viral,
bacterial or prion transmission associated with other fractions
processed from
the same plasma units as the Cryo or associated with a specific
plasma donor
whose plasma was used in the manufacture of Cryo.
7.5 Customer Notification of Adverse Reactions. In the event that
during the
course of a preliminary investigation related to a report of any
serious adverse
reaction associated with any Customer Products, Customer obtains
preliminary
evidence indicating that, according to indications and dosage, the
Cryo used in
the manufacture of such commercial Products may have caused such
specific
adverse reaction, each customer that received any such commercial
Products shall
be notified by Customer and cautioned that any unused containers of
the suspect
lots should be withheld from use, pending the outcome of more
definitive
investigations and evaluations, with a copy of such notice to the
applicable
Regulatory Authority if required. Customer shall promptly provide
Talecris with
a copy of such notice. Any and all of the foregoing actions will be
executed
with the concurrence of all relevant Regulatory Authority, to the
extent
required by law.
7.6 Withdrawals and Recalls. Customer shall make all contacts with
the relevant
Regulatory Authority and shall be responsible for coordinating all
activities in
connection with any recall or withdrawal of any Products. In the
event that
Talecris believes a recall or withdrawal of any Cryo may be
necessary or
appropriate, Talecris shall promptly notify Customer in writing. In
the event
that Customer initiates a recall or withdrawal of any Products,
Customer shall
promptly notify Talecris. If Customer initiates a withdrawal or
recall because
the Cryo used in the manufacture of Products caused adverse
reactions, then the
cost of such withdrawal or recall shall be reimbursed by
Talecris.
7.7 Complaints. Customer and Talecris will cooperate in the
reporting,
investigation and evaluation of customer complaints according
to
policies/procedures currently in place at Talecris and Omrix.
SECTION 8 FORCE MAJEURE
For the purpose of this Agreement, "FORCE MAJEURE" shall mean (i)
acts of God,
acts of the public enemy, insurrections, riots, sabotage, strike,
work-stoppage
or other labor dispute and natural disasters; (ii) explosions,
fires, flood
damage, or loss of electric power not resulting from the negligence
of the Party
invoking Force Majeure; (iii) regulatory actions not attributable
to any
violation of law on the part of Talecris or Customer, as the case
may be and
(iv) in the case of Talecris, events, circumstances, conditions and
actions
outside of the control of Talecris that materially and adversely
affect the
plasma-derived products industry generally, including, but not
limited to,
interruptions of supply of raw plasma due to viral outbreaks,
eruption of new
viruses and similar events that are reasonably likely to be subject
to action by
any Regulatory Authority; any of (i), (ii), (iii) or (iv) of which,
in the case
of Talecris, prevents Talecris from performing its obligations
under this
Agreement, or, any of (i), (ii) or (iii) of which, in the case of
Customer,
prevents Customer from producing and/or marketing its Products or
performing its
obligations under this Agreement. Notwithstanding anything in this
Agreement to
the contrary, except Section 11 and Section 12, the party
experiencing the Force
Majeure shall be excused from the performance of each of its
obligations under
this Agreement upon a Force Majeure, but only to the extent
performance of any
such obligation is necessarily prevented, hindered or delayed
thereby and only
during the continuance of any such Force Majeure, and shall have no
liability
for damages arising from non-performance of any obligation excused
by a Force
Majeure. Furthermore, if Customer terminates this Agreement
pursuant to Section
10.2, there shall be no further damages arising from any
non-performance excused
by a Force Majeure. The Party suffering such Force Majeure shall
invoke this
provision by promptly notifying the other Party in writing of the
nature and
estimated duration of the suspension period, as well as the extent
to which it
will be unable to fulfill its obligations under the Agreement. Each
Party shall
be relieved of performance of its obligations under this Agreement
during the
time when it is prevented from performing by the failure of the
other party to
perform its obligations or because of any event of Force
Majeure.
Page 11 of 30
<PAGE>
SECTION 9 REPRESENTATIONS AND WARRANTIES AND DISCLAIMER
9.1 Regulatory Requirements. Talecris represents and warrants that
Talecris has
all applicable government approvals, permits and licenses required
in the
performance of its obligations under this Agreement, including the
US FDA.
9.2 Debarment. Talecris certifies it will not use in any capacity
the services
of any person, including any firm or individual that has been
debarred or is
subject to debarment under the Generic Drug Enforcement Act of
1992, amending
the Food, Drug, and Cosmetic Act of 21 U.S.C. 335a (a) or (b).
Talecris agrees
to notify Customer promptly in the event any person providing
services to
Talecris under the scope of this Agreement is debarred or becomes
subject to
debarment.
9.3 Compliance. Talecris represents and warrants that the
manufacture,
processing, distribution, testing, transport, storage, disposal and
other
handling of Cryo by Talecris until delivery to and processing by
Customer shall
(i) conform to applicable SOPs, the Specifications, cGMPs and the
Regulations,
and (ii) be free from defects in materials and workmanship and
shall not be
adulterated or misbranded within the meaning of the applicable
Regulations.
9.4 Intellectual Property. Talecris represents and warrants that
the
manufacture, processing, testing, distribution, transport, storage,
disposal and
other handling of Cryo does not infringe the intellectual property
rights of any
third party and that Talecris validly possesses all licenses to
third party
intellectual property necessary or appropriate for the manufacture,
processing,
testing, distribution, transport, storage, disposal and other
handling of Cryo.
9.5 Representations and Warranties.
a)
Customer hereby represents and warrants to Talecris that:
(i)
Due Organization, Good Standing and Power. Customer is a duly
organized, validly existing and in good standing under the laws of
the
jurisdiction in which it was organized. Customer has all
requisite
corporate or other power and authority to own or lease and to
operate its
assets and to conduct the business now being conducted by it.
Customer is
duly
authorized, qualified or licensed to do business as a foreign
corporation or other organization in good standing in each of
the
jurisdictions in which its ownership of property or the conduct of
its
business requires such authorization, qualification or licensing,
except
where the failure to have such authorization, qualification or
licensing
could not reasonably be expected to have a material adverse effect
on
Customer or on the consummation of the transactions contemplated
hereunder.
Customer has all
requisite corporate power and authority under applicable
law
and its charter documents to enter into this Agreement and to
perform
its
obligations hereunder and to consummate the transactions
contemplated
hereby.
(ii)
Authorization and Validity of Agreement. The execution and delivery
of
this
Agreement by Customer and the consummation by it of the
transactions
contemplated hereby have been duly authorized and approved by all
necessary
corporate action under applicable law and the relevant charter
documents on
the
part of Customer and do not require the approval of the
stockholders of
Customer. This Agreement has been duly executed and delivered by
Customer
and
constitutes the legal, valid and binding obligation of Customer
enforceable against it in accordance with its terms, except as
that
enforceability may be (i) limited by any applicable bankruptcy,
insolvency,
reorganization, moratorium or similar laws affecting the
enforcement of
creditors' rights generally, (ii) subject to general principles of
equity
(regardless of whether that enforceability is considered in a
proceeding in
equity or at law) and (iii) limited
Page 12 of 30
<PAGE>
by
general principles of applicable law regarding the enforceability
of
arbitral awards and judicial decisions.
(iii) Lack of Conflicts. Neither the execution and delivery of
this
Agreement by Customer or the consummation by it or the
transactions
contemplated hereby, does or will (i) conflict with, or result in
the
breach of any provision of, the charter documents of Customer or
(ii)
violate any applicable law or any permit, order, award, injunction,
decree
or
judgment of any governmental authority applicable to or binding
upon
Customer or to which any of its properties or assets is
subject.
(iv)
No Consents. The execution, delivery and performance of this
Agreement
by
Customer and the consummation of the transactions contemplated by
this
Agreement do not require any governmental approval. No consent
(other than
governmental approvals) will be required to be obtained by Customer
for the
consummation of the transactions contemplated by this
Agreement.
(b) Talecris hereby
represents and warrants to Customer that:
(i)
Due Organization, Good
Standing and Power. Talecris is a corporation
duly organized validly existing and in good standing under the laws
of
the
state of Delaware. Talecris has all requisite corporate or
other
power and authority to own or lease and to operate its assets and
to
conduct the business now being conducted by it. Talecris is
duly
authorized, qualified or licensed to do business as a foreign
corporation or other organization in good standing in each of
the
jurisdictions in which its ownership of property or the conduct of
its
business requires such authorization, qualification or
licensing,
except where the failure to have such authorization, qualification
or
licensing could not reasonably be expected to have a material
adverse
effect on Talecris or on the consummation of the transactions
contemplated hereunder. Talecris has all requisite corporate power
and
authority under applicable law and its charter documents to enter
into
this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby.
(ii)
Authorization and Validity of Agreement. The execution and delivery
of
this Agreement by Talecris and the consummation by it of the
transactions contemplated hereby have been duly authorized and
approved by all necessary corporate action under applicable law
and
the relevant charter documents on the part of Talecris and do
not
require the approval of the stockholders of Talecris. This
Agreement
has been duly executed and delivered by Talecris and constitutes
the
legal, valid and binding obligation of Talecris enforceable against
it
in accordance with its terms, except as that enforceability may be
(i)
limited by any applicable bankruptcy, insolvency,
reorganization,
moratorium or similar laws affecting the enforcement of
creditors'
rights generally, (ii) subject to general principles of equity
(regardless of whether that enforceability is considered in a
proceeding in equity or at law) and (iii) limited by general
principles of
Page 13 of 30
<PAGE>
applicable law regarding the enforceability of arbitral awards
and
judicial decisions.
(iii) Lack of Conflicts. Neither the execution and delivery of
this
Agreement by Talecris or the consummation by it to the
transactions
contemplated hereby, does or will (i) conflict with, or result in
the
breach of any
provision of, the charter documents of Talecris or (ii)
violate any applicable law or any permit, order, award,
injunction,
decree or judgment of any governmental authority applicable to
or
binding upon Talecris or to which any of its properties or assets
is
subject.
(iv)
No Consents. The execution, delivery and performance of this
Agreement
by Talecris and the consummation of the transactions contemplated
by
this Agreement do not require any governmental approval. No
consent
(other than governmental approvals) will be required to be obtained
by
Talecris for the consummation of the transactions contemplated by
this
Agreement.
9.6 Disclaimer. TALECRIS MAKES NO REPRESENTATIONS OR WARRANTIES,
EXPRESS OR
IMPLIED OTHER THAN THOSE EXPRESSLY MADE IN THIS AGREEMENT. ALL
OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED
WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY
DISCLAIMED.
SECTION 10: TERMINATION
10.1 Termination for Cause. If either Party commits a substantial
violation of
any material provision of this Agreement (which means (i) in the
case of
Customer, nonpayment of amounts owing to Talecris in accordance
with Section 5.1
or any other material breach of any representation, warranty,
covenant or
performance obligations under this Agreement by Customer and (ii)
in the case of
Talecris, any material breach of any representation, warranty,
covenant or
performance obligation under this Agreement), the other Party may,
without
prejudice to any other right or remedy, and after giving the
breaching Party
thirty (30) days' written notice of the breach, terminate this
Agreement. This
Agreement shall not be so terminated if the breaching Party has
cured the
breach, or submitted a plan for curing the breach reasonably
acceptable to the
non-breaching Party within thirty (30) days after the non-breaching
Party's
notice. If the breaching Party fails to cure the breach as set
forth in the
aforementioned plan in accordance with the deadlines set forth
therein, the
non-breaching Party may terminate this Agreement without further
notice. The
non-breaching Party shall have the right to recover all damages and
losses
arising as a result of any such material breach, provided that any
such recovery
shall be reduced by the amount that such non-breaching Party
actually recovers
under any insurance it maintains.
10.2 Termination for Talecris' Force Majeure. Customer may
terminate this
Agreement in its sole discretion upon written notice in the event
of any failure
or inability of Talecris extending beyond sixty (60) days to
provide Cryo
hereunder due to Force Majeure. In the event of termination under
this Section
10.2, Talecris shall have no liability for damages arising solely
from such
termination or otherwise excused by a Force Majeure.
Page 14 of 30
<PAGE>
10.3 Other Termination Provisions, By Customer if Talecris or by
Talecris if
Customer:
(i)
admits in writing that
it is unable to pay its debts as they become
due;
(ii)
starts a proceeding, or indicates its acquiescence to a
proceeding
started by another, relating to it under any bankruptcy,
reorganization, rearrangement, insolvency, readjustment or
debt,
dissolution, liquidation or similar law;
(iii) makes an assignment for the benefit of creditors;
(iv)
consents to the appointment of a receiver, trustee or liquidator
for a
substantial part of its property;
(v)
files, or has filed
against it, a petition in bankruptcy,
reorganization, rearrangement or insolvency which, if filed
against
it, is not dissolved or dismissed within ninety (90) days after
filing; or
(vi)
had entered against it an order by a court of competent
jurisdiction
appointing a receiver, trustee or liquidator for it or a
substantial
part of its property, or approving its dissolution or termination,
and
if not consented to or acquiesced in by such Party, such order in
not
vacated or set aside or stayed within ninety (90) days.
Notwithstanding anything to the contrary herein, no Party shall
take or cause to
be taken any action relating to the voluntary liquidation or
dissolution of such
Party.
10.4 Effect of Termination. Upon termination of this Agreement,
Talecris shall
immediately cease delivery of all Cryo under this Agreement, and
Talecris shall
prepare and submit to Customer an invoice for all Cryo shipped by
Talecris and
not paid for by Customer. Customer shall within thirty (30) days of
receipt
thereof pay the full amount of such invoice and all other sums owed
to Talecris;
provided, however, that if the aggregate total of the Purchase
Orders placed by
Customer prior to the effective date of such termination does not
meet the
Binding Forecast for the then current calendar year in the event
that this
Agreement is terminated by Talecris pursuant to Section 10.1,
Customer shall be
obligated to pay amounts associated with Cryo to be delivered under
the then
current Binding Forecast and, at Customer's sole discretion,
Talecris shall be
obligated to deliver the same.
10.5 Remedies. The rights of a Party to this Agreement to recover
monetary
damages from the other Party to this Agreement with respect to
termination of
this Agreement are exclusively set forth in this Section 10.
10.6 Survival. Provisions of this Agreement, which by their nature
would
continue beyond the termination, expiration or ending in any other
way of this
Agreement shall survive the termination, expiration or ending in
any other way
of this Agreement.
Page 15 of 30
<PAGE>
SECTION 11: INDEMNIFICATION
11.1 Indemnification: Talecris, Talecris hereby agrees to save,
defend and hold
Customer and its affiliates and its or their directors, officers,
managers,
employees, representatives, consultants, stockholders, controlling
persons and
agents and each of the heirs, executors, successors and assigns
of
