Exhibit 10.18
HUMAN EXTRACELLULAR MATRIX MESH
SUPPLY AGREEMENT
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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.
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RECITALS
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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.
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ARTICLE I.
DEFINITIONS
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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.
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1.1
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"Act" means the United States
Food and Drug and Cosmetic Act, 29 United States Code, section 301
et seq., as amended.
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1.2
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“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.
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1.3
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“Bioreactor”
means an automatic or semi-automatic system, which cultures
fibroblast cells to produce Human Extracellular Matrix.
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1.4
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“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.
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1.5
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“FDA Approval
Date”means the date on which Immucor receives FDA approval to
be an alternate supplier of Product to IMDC.
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1.6
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“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.
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1.7
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“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.
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1.8
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“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.
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1.9
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“Mesh” means one mesh
removed from a roller bottle on which the Human Extracellular
Matrix has been deposited.
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1.10
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“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.
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1.11
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“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.
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1.12
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“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.
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1.13
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“Product” means the
labeled and packaged Human Extracellular Matrix prepared by the
Minimate Roller Bottle Process.
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1.14
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“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.
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1.15
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"Skin Medica" means Skin Medica,
Inc., a California corporation.
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1.16
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"Sole Source Start Date" is
defined in Section 3.1.2
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1.17
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“STCM” means the
spent tissue culture media created as a byproduct of the Minimate
Roller Bottle Process.
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1.18
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“S&N” means Smith
& Nephew Wound Management (LaJolla).
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1.19
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“Term” is defined in
Section 6.1.
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ARTICLE II.
PROPERTY & EQUIPMENT
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2.1
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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.
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2.2
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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.
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2.3
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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.
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2.4
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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).
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ARTICLE III.
SUPPLY AND PURCHASE
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3.1
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SUPPLY AND PURCHASE
OBLIGATIONS.
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3.1.1
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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.
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3.1.2
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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.
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3.1.3
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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.
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3.2
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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.
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3.3.1
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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).
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3.3.2
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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.
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3.4
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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.
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3.5
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PACKAGING AND LABELING. Immucor
shall package and label the Product in accordance with the Product
Specifications.
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3.6
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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.
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3.7
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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.
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3.8
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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.
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3.9.1
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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.
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3.9.2
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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):
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Quantity
Ordered
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% Increase in Price Per
Mesh
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0 - 300
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12,256%
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301 - 600
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54%
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601 - 900
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27%
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901 - 1,250
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23%
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3.9.3
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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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