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HUMAN EXTRACELLULAR MATRIX MESH SUPPLY AGREEMENT

Supply Agreement

HUMAN EXTRACELLULAR MATRIX MESH SUPPLY AGREEMENT | Document Parties: IMMUCOR INC You are currently viewing:
This Supply Agreement involves

IMMUCOR INC

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Title: HUMAN EXTRACELLULAR MATRIX MESH SUPPLY AGREEMENT
Governing Law: Texas     Date: 8/16/2004
Industry: Medical Equipment and Supplies     Sector: Healthcare

HUMAN EXTRACELLULAR MATRIX MESH SUPPLY AGREEMENT, Parties: immucor inc
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Exhibit 10.18

HUMAN EXTRACELLULAR MATRIX MESH SUPPLY AGREEMENT

 

           This HUMAN EXTRACELLULAR MATRIX MESH SUPPLY AGREEMENT (this “ Agreement ”) effective as of June 30, 2003 (the “ Effective Date ”), is made by and between IMMUCOR, INC. (“ Immucor ”), a Georgia corporation and INAMED CORPORATION (“ IMDC ”), a Delaware corporation.



RECITALS

 

           Immucor and IMDC are parties to the Development Agreement, defined below, whereby Immucor and IMDC have agreed to work together to produce Human Extracellular Matrix, defined below, from neonatal foreskin fibroblast cell culture, through bioreactor processes, roller bottle processes or similar technologies. The parties now desire to set forth the terms and conditions upon which Immucor shall supply to IMDC, and IMDC shall buy from Immucor, Human Extracellular Matrix produced by roller bottle processes. In addition, because IMDC does not have sufficient storage space for all of the products to be produced under this Agreement, IMDC has requested that Immucor make arrangements to hold some of IMDC’s inventory at Immucor’s facility, and Immucor has agreed to do so, all under the terms hereof.



ARTICLE I.
DEFINITIONS

 

           Capitalized terms used in this Agreement shall have the meanings as defined herein. In addition, for the purposes of this Agreement, the capitalized terms set forth below shall have the meanings set forth in this Article 1.



 

1.1

"Act" means the United States Food and Drug and Cosmetic Act, 29 United States Code, section 301 et seq., as amended.



 

1.2

 “Affiliate” means, with respect to any Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such Person.



 

1.3

 “Bioreactor” means an automatic or semi-automatic system, which cultures fibroblast cells to produce Human Extracellular Matrix.



 

1.4

 “Development Agreement”means the Human Collagen Development Agreement between Immucor and IMDC dated as of January 10, 2003, as it may be amended from time to time.



 

1.5

“FDA Approval Date”means the date on which Immucor receives FDA approval to be an alternate supplier of Product to IMDC.




 

1.6

“Governmental Body”means any court, government department, commission, board, bureau, agency, official or other regulatory, administrative or governmental authority or instrumentality, whether federal, state, local or foreign.



 

1.7

“Human Extracellular Matrix” means the complex matrix produced by human dermal fibroblasts in the formation of tissue, composed of collagen, proteoglycans, carbohydrates, and other proteins in a highly structured matrix.



 

1.8

“Intellectual Property Rights” means trade secrets, patents, copyrights, trademarks, know-how, moral rights and similar rights of any type under the laws of any Governmental Body, including all applications and registrations relating to any of the foregoing.



 

1.9

“Mesh” means one mesh removed from a roller bottle on which the Human Extracellular Matrix has been deposited.



 

1.10

“Minimate Roller Bottle Process” means a roller bottle process developed by Advanced Tissue Sciences, Inc. to produce Human Extracellular Matrix using semi-automated processes to add and remove tissue culture media.



 

1.11

“Net Revenue” means (a) gross payments from Skin Medica to Immucor from the sale of STCM by Immucor to Skin Medica pursuant to the Development Agreement and/or a separate STCM supply agreement between Immucor and Skin Medica, reduced by (b) any discounts granted for prompt payment, credits issued for non-performing product or products lost or damaged in transit.



 

1.12

“Person” means and includes a natural person, a corporation, an association, a partnership, a limited liability company, a trust, a joint venture, an unincorporated organization, a business, any other legal entity and a Governmental Body.



 

1.13

“Product” means the labeled and packaged Human Extracellular Matrix prepared by the Minimate Roller Bottle Process.



 

1.14

“Product Specifications” means the specifications for the Product set forth in Schedule A attached hereto, which have been jointly approved by IMDC and Immucor, as they may be revised from time to time in accordance with the terms of this Agreement.



 

1.15

"Skin Medica" means Skin Medica, Inc., a California corporation.



 

1.16

"Sole Source Start Date" is defined in Section 3.1.2



 

1.17

“STCM” means the spent tissue culture media created as a byproduct of the Minimate Roller Bottle Process.



 

1.18

“S&N” means Smith & Nephew Wound Management (LaJolla).




 

1.19

“Term” is defined in Section 6.1.



ARTICLE II.
PROPERTY & EQUIPMENT

 

2.1

FACILITIES IMPROVMENTS. With the prior written approval of IMDC, Immucor will provide and pay for any improvements to its building at 3700 Mangum Road, Houston, Texas, the building in which the Product will be manufactured and stored, which are required for Immucor to perform its obligations under this Agreement, which may include but are not limited to facility expansion and renovation, back-up power generators, heating, ventilation and air conditioning units, and other fixtures. Notwithstanding anything herein to the contrary, Immucor shall at all times own all right, title and interest in and to any such improvements. Nothing herein shall be deemed to grant or imply any lease or license to the building or any such capital improvements. Immucor will maintain commercially reasonable levels of property and casualty insurance to minimize the impact of a loss of or damage to such improvements on the production of Product.



 

2.2

EQUIPMENT. Upon written request by Immucor, IMDC shall purchase, and Immucor shall have the right to use during the Term for purposes of fulfilling its obligations under this Agreement, any equipment necessary for the manufacture and storage of Product in accordance with the terms of this Agreement (the “ Equipment ”), including but not limited to hoods, roller bottle racks, automated roller bottle handling equipment, QC equipment and packaging equipment. IMDC will have the right to identify the Equipment with IMDC asset tags, file appropriate UCC financing statements and similar forms on the Equipment, and to insure the Equipment against loss or damage. Immucor shall provide routine service, calibration and maintenance of the Equipment at no additional cost to IMDC, and major repairs and/or replacements shall be handled as agreed to by the parties. IMDC shall have the right, at its expense and upon reasonable notice to Immucor, to count and conduct an inspection of the Equipment for purposes of reviewing the quantity, condition and utility of such Equipment. Immucor will keep the Equipment free and clear of all liens other than liens arising as a result of third-party arrangements entered into by IMDC.



 

2.3

CELL LINE. IMDC grants to Immucor access and use of cell line C-FS0012F (referred to herein as the “Cell Line”) for the exclusive use for the manufacture of the Product. Immucor may not under any circumstances use, evaluate, or test the Cell Line for any other use, except as described in the Development Agreement or for the manufacture of the Product. Immucor warrants that no lien or other encumbrances will be placed on the Cell Line for any reason. Immucor will store the Cell Line per industry practices and have a proper back-up storage facility to reduce the risk to the Cell Line from disasters. IMDC will have right, at its expense and upon reasonable notice to Immucor, to audit the Cell Line and related documentation to insure that proper storage and accountability exists. Immucor will participate with IMDC in future cell line development, as reasonably requested by IMDC and at IMDC’s expense.




 

2.4

MANUFACTURING INFORMATION. IMDC shall transfer or otherwise make available to Immucor the information and documents about the manufacturing process necessary for Immucor to begin manufacturing Product under the terms of this Agreement (collectively, the “Manufacturing Information”), including but not limited to one copy of the product master record file for the Product, and a videotape of the current manufacturing process for the Product. The product master record file shall consist of: a description of the process used for the manufacture of the Product; the formulation of the Product; work method; and a description of the environment for the manufacture of the Product (including gowning, temperature control and gas control).



ARTICLE III.
SUPPLY AND PURCHASE

 

3.1

SUPPLY AND PURCHASE OBLIGATIONS.



 

3.1.1

During the Term Immucor shall supply Product to IMDC and IMDC shall purchase Product from Immucor, on the terms and conditions and at the times and in the manner set forth herein.



 

3.1.2

For the five-year period beginning on the first day of the month immediately following the later of the FDA Approval Date or validation of the Product by Immucor (such beginning date being referred to as the “Sole Source Start Date,” and each such year being referred to herein as a “Sole Source Year”), Immucor shall be IMDC’s sole source of Product until IMDC shall have issued firm purchase orders for 30,000 Mesh from Immucor during that Sole Source Year. After IMDC has issued firm purchase orders for 30,000 Mesh from Immucor during that Sole Source Year, IMDC shall have the right to purchase from other sources the excess quantity over 30,000 Mesh (that excess quantity being referred to as the “Excess Annual Demand”); provided, however, Immucor shall have a right of first refusal to supply the Excess Annual Demand. If IMDC receives a formal quotation from a bona fide third party source for the supply of the Excess Annual Demand, IMDC will so notify Immucor in writing, enclose a copy of that quotation, and allow Immucor 60 days to respond. If during that time Immucor does not agree to supply the Excess Annual Demand for the same price offered in that quotation, IMDC may purchase the Excess Annual Demand for that Sole Source Year from that third-party source. This Section 3.1.2 shall cease to apply after the fifth anniversary of the Sole Source Start Date.



 

3.1.3

The parties acknowledge that: IMDC is currently purchasing Product from S&N; prior to the Sole Source Start Date IMDC will continue to purchase Product from S&N; and after the Sole Source Start Date, notwithstanding the first sentence of Section 3.1.2, IMDC may complete the purchase of Product ordered from S&N before the Sole Source Start Date.




 

3.2

PURCHASE FORECASTS. IMDC shall provide Immucor with a 12-month rolling forecast of monthly purchase orders, with the first such rolling forecast to be provided on July 1, 2003. IMDC will update the rolling forecast on a quarterly basis not later than the first day of each calendar quarter. Such forecasted amounts are for informational purposes only and shall not be binding purchase obligations of IMDC or supply obligations of Immucor.



 

3.3

ORDERS.



 

3.3.1

IMDC will issue to Immucor a monthly purchase order not later than the fifth day of each calendar month (in accordance with Section 10.5) for Product. All such orders shall specify the quantities of Product ordered and an IMDC purchase order number and shall designate the type of delivery under Section 3.6 (i.e., either to an IMDC shipper or into storage at Immucor’s facility).



 

3.3.2

Unless Immucor shall agree otherwise, each purchase order shall order (a) not more than 2500 Mesh per month, and (b) at least 75% and not more than 125% of the amount ordered the previous month.



 

3.4

PRODUCT SPECIFICATIONS. All Product supplied by Immucor shall be produced in accordance with the Product Specifications. IMDC will have the right to audit the Quality System of Immucor related to the manufacture of the Product at reasonable times and upon reasonable notice to Immucor. IMDC shall give Immucor 60 days prior written notice of any proposed changes to the Minimate Roller Bottle Process or the Product Specifications. During that 60-day period IMDC and Immucor will hold good faith discussions to determine the impact of any such changes on Product pricing, and if appropriate will adjust prices accordingly, such adjusted prices to become effective as to Product delivered under Section 3.6 after the adjustment is made. Immucor will not make any change to the Minimate Roller Bottle Process without IMDC’s written approval.



 

3.5

PACKAGING AND LABELING. Immucor shall package and label the Product in accordance with the Product Specifications.



 

3.6

DELIVERY. Immucor will deliver all Product ordered by IMDC by (i) tendering Product from an Immucor facility to a shipper designated by IMDC in its purchase order, or (ii) storing Product in an Immucor storage facility until such time as Immucor receives further delivery instructions from IMDC. Immucor will ship Product no later than 180 days following Immucor’s receipt of a purchase order, unless otherwise stated on the purchase order. Immucor will ship Product with no less than three months self-life. All deliveries shall be made consistent with the purchase order and shall be accompanied by a packing slip identifying the quantities shipped and the IMDC purchase order number.




 

3.7

ACCEPTANCE. Immucor will test each order of Product for conformance with the Product Specifications in accordance with the equivalency testing specifications set forth in Schedule A attached hereto. Upon completing such testing, Immucor will issue a Certificate of Analysis in form substantially as attached hereto as Schedule B. Each delivery of Product will be deemed to have been accepted by IMDC upon issuance of such Certificate of Analysis unless IMDC provides notice to Immucor (pursuant to Section 10.5) of rejection of such delivery within ten days following receipt by IMDC of the Certificate of Analysis for such delivery. Title and risk of loss shall transfer to IMDC at the time of issuance by Immucor of the Certificate of Analysis, free and clear of all encumbrances, security interests, and other liens, and IMDC will be responsible for properly insuring the Product so delivered against hazards, spoilage and other loss.



 

3.8

STORAGE. Immucor will store, in accordance with storage specifications set forth in the purchase order, Product delivered to an Immucor storage facility pursuant to Section 3.6 above until such time as Immucor receives further shipping instructions from IMDC.



 

3.9

PRICING; INVOICING.



 

3.9.1

For all Product supplied by Immucor in accordance with this Article III, IMDC shall pay to Immucor the purchase price specified in Schedule C attached hereto. The purchase price is subject to adjustment as provided elsewhere in this Agreement.



 

3.9.2

The purchase price for Product will be adjusted upward as to each month after June 30, 2004 for which IMDC orders less than 1,250 Mesh, by a percentage based on the quantity ordered, as follows (expressed as a percentage of the highest unit price on Schedule C , which initially is $278.20 per Mesh):

 

 

Quantity Ordered

 

% Increase in Price Per Mesh

 

 

0 - 300

 

12,256%

 

 

301 - 600

 

54%

 

 

601 - 900

 

27%

 

 

901 - 1,250

 

23%

 




 

3.9.3

As an incentive for continued process improvements, IMDC agrees to a cost improvement-sharing plan. This plan will be initiated after Immucor makes a change to the Minimate Roller Bottle Process, which has been approved by IMDC under Section 3.4 if required to be so approved. IMDC agrees to accept upward adjustments to the purchase price based on the improvements in the final yield of IMDC’s commercial products, including CosmoDerm and CosmoPlast. Immucor will receive a purchase price increase equal to 50% of the improvement, based on the quarterly average yield improvement over the quarterly average yield before the change. The following table illustrates how the price increase will be determined and applied. As shown in the example below, the change occurs in the beginning of the second quarter. The average yield of IMDC’s commercial products, based on at least three production lots, in the quarter preceding the change is called the “baseline.” The baseline will be based on the average yield of IMDC’s commercial products for the first full calendar quarter in which IMDC is producing its commercial products using Product delivered by Immucor. After the change, the Product affected will be traced and the final yield of IMDC’s commercial products will be determined. If the average yield is more than the baseline, then Immucor will receive an adjustment equal to 50% of the yield improveme


 
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