Exhibit 10.31


 


Execution Copy


*** TEXT OMITTED AND SUBMITTED SEPARATELY

PURSUANT TO CONFIDENTIAL TREATMENT REQUEST

UNDER 17 C.F.R. SECTIONS 200.80(b)(4) AND 230.406


 


SUPPLY AGREEMENT


 


BY AND BETWEEN


 


BAYER HEALTHCARE LLC


BIOLOGICAL PRODUCTS DIVISION


BERKELEY, CALIFORNIA


 


AND


 


TALECRIS BIOTHERAPEUTICS, INC.


RALEIGH, NORTH CAROLINA


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
   

  	
  TERM OF AGREEMENT

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
  PURCHASE AND SALE OF PPF

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Volume
  Requirements

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.2

  	
   

  	
  Forecasts

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.3

  	
   

  	
  Purchase
  Orders

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.4

  	
   

  	
  Shipments

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.5

  	
   

  	
  Inventory
  Levels

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.6

  	
   

  	
  Cooperation
  of the Parties

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.7

  	
   

  	
  Meetings

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
  QUALITY AND SPECIFICATIONS

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Specifications

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.2

  	
   

  	
  Testing

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.3

  	
   

  	
  Acceptance

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.4

  	
   

  	
  Latent
  Defects

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.5

  	
   

  	
  Deviation
  Report

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.6

  	
   

  	
  Records

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  	
  PRICE AND PRICE ADJUSTMENT

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Price

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.2

  	
   

  	
  Adjustment
  to Price

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.3

  	
   

  	
  Price
  Adjustment Calculation

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
  BILLING AND PAYMENT

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Payments

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2

  	
   

  	
  Payment
  Disputes

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
  REGULATORY REQUIREMENTS

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Compliance
  with Regulations

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.2

  	
   

  	
  Audit

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.3

  	
   

  	
  Regulatory
  Filings

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.4

  	
   

  	
  Regulatory
  Approvals

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.5

  	
   

  	
  Onsite
  Personnel

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  	
  NONCONFORMING PRODUCT AND RECALLS

  	
   

  	
  9

  



 


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  Page

  
	
  7.1

  	
   

  	
  Nonconforming
  Product

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.2

  	
   

  	
  General
  Requirements

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.3

  	
   

  	
  Distribution
  and Use Records

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.4

  	
   

  	
  Adverse
  Events

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.5

  	
   

  	
  Customer
  Notification of Adverse Reactions

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.6

  	
   

  	
  Withdrawals
  and Recalls

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.7

  	
   

  	
  Complaints

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.8

  	
   

  	
  Responsibility

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  	
  FORCE MAJEURE

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  	
  REPRESENTATIONS AND WARRANTIES AND DISCLAIMER

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  Regulatory
  Requirements

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.2

  	
   

  	
  Debarment

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.3

  	
   

  	
  Compliance

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.4

  	
   

  	
  Intellectual
  Property

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.5

  	
   

  	
  Representations
  and Warranties

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.6

  	
   

  	
  Disclaimer

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  	
  TERMINATION

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.1

  	
   

  	
  Termination
  for Cause

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.2

  	
   

  	
  Termination
  for Supplier’s Force Majeure

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.3

  	
   

  	
  Other
  Termination Provisions

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.4

  	
   

  	
  Termination
  Without Cause

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.5

  	
   

  	
  Effect of
  Termination

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.6

  	
   

  	
  Remedies

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.7

  	
   

  	
  Special
  Assistance

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.8

  	
   

  	
  Survival

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
   

  	
  INDEMNITIES AND DAMAGES

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.1

  	
   

  	
  Indemnifications

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.2

  	
   

  	
  Indemnification
  Process

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.3

  	
   

  	
  Insurance

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.4

  	
   

  	
  Liquidated
  Damages And Other Damages For Failure To Deliver PPF

  	
   

  	
  18

  



 


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  Page

  
	
  11.5

  	
   

  	
  Insurance
  Recoveries

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
   

  	
  CONFIDENTIALITY

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.1

  	
   

  	
  Confidentiality
  Obligations

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.2

  	
   

  	
  Exceptions

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.3

  	
   

  	
  Term of
  Obligations

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.1

  	
   

  	
  Consent to
  Assignment

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.2

  	
   

  	
  Entire
  Agreement and Amendments

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.3

  	
   

  	
  Notices

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.4

  	
   

  	
  Independent
  Contractor

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.5

  	
   

  	
  Non-Waiver

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.6

  	
   

  	
  Choice of
  Law

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.7

  	
   

  	
  Captions

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.8

  	
   

  	
  Severability

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.9

  	
   

  	
  Dispute
  Resolution

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.10

  	
   

  	
  Defined
  Terms

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.11

  	
   

  	
  Set-Off

  	
   

  	
  25

  



 


iii

















 


SUPPLY AGREEMENT


 


THIS SUPPLY AGREEMENT (this “Agreement”) is entered into as of March 31,
2005 (the “Effective
Date”), by and between Bayer HealthCare LLC, Biological Products
Division (“Bayer”)
and Talecris Biotherapeutics, Inc. (f/k/a NPS BioTherapeutics, Inc.) (“Supplier,” along with
Bayer, the “Parties”).


 


WITNESSETH


 


WHEREAS, Bayer, Talecris
Holdings, LLC (f/k/a NPS Bio Holdings, LLC), Talecris Biotherapeutics Holdings
Corp. and Supplier have entered into that certain Amended and Restated Joint
Contribution Agreement, dated as of March 30, 2005 (the “Contribution
Agreement”);


 


WHEREAS, Supplier is
engaged in the manufacture and distribution of plasma-derived biological
products;


 


WHEREAS, Supplier
fractionates plasma into biological products and one of the components of the
fractionation process is an intermediate blood fraction known as PPF (“PPF”);


 


WHEREAS, Bayer is in
the business of producing and selling recombinant Factor VIII (sold under the
Kogenate® trademark) and other biological products derived from PPF
(the “Products”);


 


WHEREAS, Bayer
desires to purchase from Supplier PPF derived from plasma fractionated at
Supplier’s facility as its sole source qualified with various Regulatory
Authorities (as defined herein) for use in the manufacture and development of
the Products; and


 


WHEREAS, Bayer and
Supplier wish to set forth their mutual agreements and understandings regarding
the sale by Supplier and the purchase by Bayer of the PPF 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:


 


ARTICLE
1  TERM OF
AGREEMENT


 


This Agreement shall have an initial term
commencing on the Effective Date and terminating on December 31, 2008 (“Initial Term”) unless
earlier terminated as provided in Article 10 below. The Initial Term may be
renewed for two consecutive two (2) year periods at the option of Bayer,
provided that Bayer gives Supplier 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,” and
along with the Initial Term, the “Term”).


 


1

















 


ARTICLE
2  PURCHASE
AND SALE OF PPF


 


2.1        Volume
Requirements. With respect to each calendar year during the
Initial Term, Supplier shall make available to Bayer from its Clayton, North
Carolina facility, and Bayer may purchase, that number of kilograms of PPF set
forth in Exhibit A,
attached hereto and incorporated herein by reference (which conform to the
Specifications (as defined in Section 3.1 below)) (as adjusted herein, “Required Quantity”). Upon
providing a notice of renewal for an Extended Term in accordance with Article
1, Bayer shall amend Exhibit A
to set forth the number of kilograms of PPF that Supplier shall make available
to Bayer and that Bayer will purchase from Supplier during such Extended Term;
provided that any such number of kilograms cannot exceed one hundred twenty
percent (120%) of that number of kilograms shown on Exhibit A then in effect on the date
the notice of renewal is provided. Subject to the other provisions contained
herein, including, without limitation, Section 2.2 below, in each calendar year
during the Term of this Agreement, Bayer may in its sole discretion request,
and Supplier shall supply, a minimum of seventy-five percent (75%) of the
Required Quantity and a maximum of one hundred fifteen percent (115%) of the
Required Quantity (each, as determined after deducting quantities representing
Nonconforming Product (as defined in Section 7.1 below)). Subject to the
foregoing, on or prior to October 1 of each calendar year, the Required
Quantity applicable for the immediately following calendar year shall be
reviewed and may be revised by mutual agreement of the Parties.


 


2.2        Forecasts. As of the
Effective Date, Bayer shall provide Supplier with a twelve (12) month rolling
forecast of Bayer’s estimated requirements of PPF by calendar month. Such
forecast shall be attached hereto as Exhibit
B, and incorporated herein by reference. Bayer shall provide an
updated rolling twelve (12) month forecast on or about the commencement of each
calendar month. The first six (6) months of each rolling twelve (12) month
forecast shall be a binding order (a “Binding Forecast”), and the last six (6)
months of the rolling forecast shall be a good faith estimate of Bayer’s future
requirements and shall not be binding on the Parties. Supplier agrees to
deliver PPF in such quantities, on such delivery dates as are specified in the
Purchase Orders issued by Bayer pursuant to Section 2.3. The Parties agree and
acknowledge that regardless of the volume of PPF requested by Bayer in the
Binding Forecasts, Bayer shall be obligated to purchase at least seventy-five
percent (75%) of the Required Quantity of PPF for each calendar year set forth
in Exhibit A (“Minimum Quantity”)
and Supplier shall be obligated to supply no more than one hundred fifteen
percent (115%) of the Required Quantity of PPF for each calendar year set forth
in Exhibit A. To the extent
that the aggregate volume of PPF set forth in the Binding Forecasts for any
calendar year does not at least equal the Minimum Quantity, the Supplier may,
within thirty (30) days of the end of such calendar year, invoice Bayer for the
total price attributed to such difference (based on the Prices set forth in
Section 4.1 below) and deliver to Bayer the invoiced PPF in accordance with
Section 2.4. Notwithstanding anything to the contrary herein, during any
Binding Forecast period, to the extent that Bayer’s actual needs for PPF exceed
those volumes set forth in the Binding Forecast, Supplier shall use
commercially reasonable efforts to adjust its production capacity to
accommodate Bayer’s additional requirements for PPF to the extent and subject
to the terms of Section 2.6.


 


2.3        Purchase Orders. Simultaneous
with the submission of the first forecast set forth in Section 2.2 above, Bayer
shall deliver to Supplier a purchase order reflecting the aggregate PPF 


 


2

















 


volume in the Binding Forecast and with each subsequent forecast set
forth in Section 2.2 above, Bayer shall deliver a purchase order reflecting the
aggregate PPF ordered for the sixth month of the Binding Forecast (in each
case, a “Purchase Order”).
Each Purchase Order shall specify the volumes of PPF ordered and the delivery
dates. Except as otherwise permitted under this Agreement, with respect to any
calendar year, the aggregate volumes set forth in the Purchase Orders issued by
Bayer shall not exceed the Binding Forecasts for such calendar year. The
Parties shall cooperate to ensure that the PPF to be purchased by Bayer is
ordered in a manner so as to allow Supplier to produce such PPF efficiently,
without material swings in volume over the course of any  twelve (12) month period.


 


2.4        Shipments. Supplier
agrees that it shall provide PPF in conformance with the delivery schedule
provided by Bayer based on issued Purchase Orders, provided that in no event
shall Supplier be required to provide PPF in excess of any Binding Forecast. Unless
otherwise agreed by the Parties, time is of the essence for the delivery of PPF
in accordance with the delivery schedule included in Bayer’s issued Purchase
Orders. Supplier shall include copies of production and test records with each
shipment. Bayer shall be responsible for making the necessary shipping
arrangements. All PPF purchased and sold hereunder shall be delivered F.O.B.
Supplier’s facility, Clayton, North Carolina. Risk of loss for PPF in transit
shall lie with Bayer. All financial arrangements for shipping and handling of
PPF shall be the responsibility of Bayer. Shipments shall be made, to the
extent possible, first from Supplier’s Inventory Reserves on a first in, first
out basis, and subject to Section 2.5, such reserves shall be replaced at
the same time with a reasonably equivalent volume of PPF produced pursuant
hereto.


 


2.5        Inventory
Levels. For purposes of maintaining continuity of supply of PPF, each of
Bayer and Supplier shall maintain at least [***] of Bayer’s requirements for
PPF at their respective facilities, based on the forecasts provided by Bayer in
accordance with Section 2.2 above, in inventory (each an “Inventory Reserve”)
for distribution to Bayer in the event that Supplier is unable for any reason
to supply the Binding Forecast in accordance with the delivery dates set forth
in the Purchase Orders issued by Bayer in accordance with Section 2.3 above;
provided that Supplier shall have no liability to Bayer pursuant to Subsections
(b) and (e) of Section 11.4 for any failure to deliver PPF hereunder to the
extent Bayer has depleted, through no fault of Supplier, its Inventory Reserve
to supply its actual needs for PPF in excess of the Binding Forecasts solely in
circumstances where Supplier has been unable to accommodate Bayer’s
requirements for PPF pursuant to Section 2.2 hereof. Such Inventory Reserves
shall be maintained in accordance with the storage specifications set forth in Exhibit C, which specifications shall
not be changed without the prior written consent of Bayer. Bayer represents and
warrants to Supplier that as of the Effective Date there is sufficient
inventory on hand at Supplier’s facility both for Supplier to meet its
Inventory Reserve and for Supplier to supply Bayer with Bayer’s Inventory
Reserve. In the event that Supplier is unable for any reason to supply the
Binding Forecast in accordance with the delivery dates set forth in the
Purchase Order issued by Bayer in accordance with Section 2.3 above, the
Inventory Reserve maintained by Supplier at its facility shall be used first on
a first in, first out basis to meet Supplier’s delivery requirements. Thereafter,
Bayer shall utilize PPF from inventory stored at Bayer’s facility on a first
in, first out basis. Notwithstanding anything to the contrary herein, in the
event that the Inventory Reserve of either Bayer or Supplier is used to meet
Supplier delivery requirements, Supplier shall use its reasonable best efforts
to replace such quantities used in order to replace the Inventory Reserve
requirements pursuant to this Section 2.5.


 






*** CONFIDENTIAL TREATMENT REQUESTED


 


3

















 


2.6        Cooperation of
the Parties. Supplier shall inform Bayer promptly of any
problems that could reasonably be expected to prevent Supplier from providing
timely deliveries of PPF and the Parties shall cooperate in resolving such
problems relating to the manufacture and supply of PPF under this Agreement. In
recognition of the fact that Bayer’s business is dynamic and evolving based on
market demand, regulatory approvals and other factors, Supplier shall in good
faith, but subject to the terms of this Agreement, use commercially reasonable
efforts to seek to accommodate any reasonable request by Bayer to manufacture
quantities of PPF in excess of Supplier’s obligations hereunder; provided,
however, that Supplier shall have no liability as a result of any failure to
accommodate such requests despite such efforts. The Parties shall use their
commercially reasonable efforts to coordinate maintenance outages and
shut-downs of Bayer’s facility and Supplier’s facility, which coordination
could include making temporary changes to the Binding Forecast. For purposes of
clarification, this Section 2.6 does not diminish or expand the Parties’
respective aggregate obligations over any 12-month period to supply and
purchase PPF in accordance with the Binding Forecast set forth in Section 2.2.


 


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 Bayer pursuant to this Agreement and other matters
relevant to the supply of PPF hereunder. In addition, the 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 PPF 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.


 


ARTICLE
3  QUALITY
AND SPECIFICATIONS


 


3.1        Specifications. Supplier
shall manufacture, process, store, distribute, test, transport, dispose and
otherwise handle PPF 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 Manufacturing Agreement (attached hereto as Exhibit D  and incorporated herein by
reference), the specifications (attached hereto as Exhibit E and incorporated herein by
reference) (the “Specifications”)
and the SOPs as defined in Section 6.2. The Manufacturing Agreement shall be
renewed annually, consistent with the Term of this Agreement, with each such
renewal deemed attached hereto as Exhibit D
and incorporated herein by reference. In the event of a conflict between the
provisions of this Agreement and the provisions of the Manufacturing Agreement,
the provisions of this Agreement shall prevail. Neither Party shall make
changes to the batch production records or the Specifications without the prior
written approval of the other Party which approval will not be unreasonably
withheld. Supplier shall make no changes in the SOPs, production equipment,
production procedures, or testing methods existing as of the date of this
Agreement without providing reasonable notice to Bayer in advance of the change
and obtaining Bayer’s prior written consent. Bayer shall use commercially
reasonable efforts to provide such consent as soon as reasonably practicable
with the understanding that Bayer is under no obligation to provide any such
consent if the proposed change would substantially and adversely affect or
reduce Bayer’s production of Kogenate. Supplier shall maintain all records as
are necessary and appropriate to demonstrate compliance with the Regulations. Bayer
shall be entitled to request Supplier to change the Specifications and the SOPs
as defined in Section 6.2 where, in Bayer’s sole discretion, such change would
benefit Bayer’s production of Kogenate and Supplier shall use commercially
reasonable efforts to accommodate such change;


 


4

















 


provided that Bayer will reimburse Supplier the reasonable direct costs
Supplier incurs in making any such change; provided further that the Parties
shall engage in good faith negotiations to adjust the Price set forth in
Section 4.1 to reflect the increase or decrease of ongoing costs of supplying
PPF hereunder resulting from any such change; provided further that if the
Parties cannot reach agreement to adjust the Price pursuant to this Section 3.1
despite such good faith negotiations, then (i) if the requested change to
Specifications and SOPs will affect only the PPF operations of Supplier at its
Clayton, North Carolina facility, the matter shall be resolved in accordance
with Section 13.9, or (ii) if the requested change to Specifications and SOPs
will in Supplier’s sole discretion adversely affect in any material manner
other operations of Supplier at its Clayton, North Carolina facility separate
from its PPF operations at its Clayton, North Carolina facility, Supplier shall
not be required to change the Specifications or the SOPs as requested by Bayer
until the Parties reach such agreement.


 


3.2        Testing. With respect
to each shipment of PPF to be shipped to Bayer, Supplier shall test such PPF to
ensure compliance with the Specifications. Supplier shall include a certificate
of analyses (“COA”)
with each shipment of PPF disclosing the results of such testing and showing
conformance with the Specifications.


 


3.3        Acceptance. Subject to
Section 3.4 below, Bayer shall have a period of thirty (30) days from the date
of its receipt of a shipment of PPF to inspect the delivered PPF and the
accompanying COA and reject the corresponding shipment of PPF for nonconformity
with the Specifications. If Bayer rejects such shipment, it shall promptly so
notify Supplier and the provisions of Section 7.1 below shall apply.


 


3.4        Latent Defects. If after
accepting a shipment of PPF, Bayer 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, Bayer may revoke its acceptance of such shipment of PPF by giving written
notice and disclosing the nature of any defects to Supplier as soon as
practicable after discovering such defects. In such event, such PPF shall be
considered a Nonconforming Product to the extent latent material defects in
fact are present and the provisions of Section 7.1 below shall apply.


 


3.5        Deviation
Report. If during the manufacture, processing, storage, distribution,
testing, transport, disposal or other handling of PPF by Supplier there arises
a result that is classified as either a Type I Incident or a Type II Incident
(as defined below), then Supplier shall prepare within seven (7) days following
the discovery of such deviation a written report detailing such deviation (a “Deviation Report”)
and promptly send to Bayer such Deviation Report prior to Supplier’s delivery
of the PPF which is the subject of such report. If Bayer rejects a shipment of
PPF based on a Deviation Report, it shall promptly notify Supplier, such PPF
shall be considered a Nonconforming Product and the provisions of Section 7.1
shall apply. For purposes of this Agreement, a “Type I Incident” shall be defined as an
unexpected result that has potential serious impact on product safety,
identity, strength, quality, purity, efficacy or manufacturing/testing process.
Examples of Type I Incidents include final product sterility and stability
failure, media fill failure, pyrogen specification exceeded for bulk or final
container and inadequate viral inactivation process. For purposes of this
Agreement, a “Type II
Incident” shall be defined as an unexpected result that has the
potential to affect product safety, identity, strength, quality, purity,
efficacy or manufacturing/testing process. Examples of Type 


 


5

















 


II Incidents include clean steam exceeding action level for LAL and
Presterile in-process bioburden exceeding action level.


 


3.6           Records. Supplier shall maintain
production records and other records required by cGMPs and the Regulations for
such time periods referenced thereby. Supplier shall make such records
available to Bayer for Bayer’s inspection promptly following a written request
by Bayer.


 


ARTICLE
4  PRICE
AND PRICE ADJUSTMENT


 


4.1           Price. During the Term of this
Agreement, Bayer shall pay the applicable price set forth on Exhibit F, attached hereto and
incorporated herein by reference, as adjusted pursuant to Section 4.2 below (“Price”). Supplier
shall be responsible for, or benefit from, yield experiences and variances,
rejects, losses, working capital, scrap, inventory obsolescence and any and all
other costs associated with the manufacturing, including all materials costs,
except as set forth in Section 4.2 below. All payments hereunder shall be made
in U.S. Dollars.


 


4.2           Adjustment to Price.


 


(a)           Annual.
The Price shall be adjusted annually by Supplier on October 1 or as soon
thereafter as possible with respect to PPF sold in each subsequent calendar
year during the Term based on the assumption that the Term commences during
calendar year 2004. Such adjustment to Price (the “Price Adjustment”)
shall reflect the change in the CPI-U. For purposes of the foregoing, “CPI-U” shall mean the
unadjusted percentage change for the previous twelve-month period ending on
September 30 of each calendar year, 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 January 1, 2005.


 


(b)           Other.
The Price shall be further subject to adjustment in accordance with Sections
3.1 and 6.4.


 


4.3           Price Adjustment Calculation. On October 1st
of each calendar year or as soon thereafter as possible, Supplier shall provide
for Bayer’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
calendar year, and the methodology used in making such computation. Such
adjustment shall be final and binding in the absence of manifest error.


 


ARTICLE
5  BILLING
AND PAYMENT


 


5.1           Payments. Supplier shall deliver to
Bayer at the address set forth in Section 13.3 an invoice for shipments of PPF
to Bayer as the same is shipped. Each invoice shall reflect the actual quantity
of the PPF shipped and the price thereof, as computed in accordance with
Section 4.1. The amount invoiced by Supplier and payable by Bayer during each
Binding Forecast period will not be less than that charge associated with such
Binding Forecast, as computed in accordance with Section 4.1, unless the actual
PPF delivered is less than the Binding Forecast due to Supplier’s failure to
perform its obligations under this Agreement. Within thirty (30) days following
the receipt of such invoice, Bayer shall pay to Supplier the amount specified
therein.


 


6

















 


5.2           Payment Disputes. All billing and payment
disputes between Bayer and Supplier shall be resolved in accordance with Section
13.9 below.


 


ARTICLE
6  REGULATORY
REQUIREMENTS


 


6.1           Compliance with Regulations. Supplier
shall comply in all material respects with all applicable laws, requirements,
regulations, guidelines, licenses and directives, including those in any
Regulatory Approval of any Regulatory Authority (including without limitation,
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 (collectively, “Regulations”). For
the avoidance of doubt the term “Regulations” shall include those pertaining to
the use of PPF in Kogenate production. Supplier shall comply with all
Regulations that become effective after the Effective Date within the
timeframes required by such Regulation or applicable Regulatory Authority. Supplier
shall maintain all Regulatory Approvals necessary or desirable for the conduct
of its business, the sale of PPF, the use of PPF in Kogenate production, and
for the performance of its obligations under this Agreement. Notwithstanding
the foregoing, until the second anniversary of the Effective Date, Supplier
shall not be liable to Bayer for, or considered in breach of this Agreement as
a result of, any noncompliance or failure to comply with any Regulations to the
extent such noncompliance was in existence at the time of Closing (as defined
in the Contribution Agreement); provided, however, that all other obligations
of Supplier contained herein shall remain in full force and effect at all times
from and after the Effective Date. For purposes of this Agreement (i) “Regulatory Approvals”
shall mean all licenses, approvals, permissions, or consents required for the
manufacture and sale of Kogenate, including any licenses, approvals,
permissions, or consents required for the transfer or sale of PPF to Bayer and
Bayer’s use of PPF in the manufacture of Kogenate and (ii) “Regulatory Authority and Regulatory
Authorities” shall mean the FDA and any successor agency and all
other local, state, federal, or foreign governmental authorities with the
authority to grant or deny necessary Regulatory Approvals or to regulate the
manner or means by which PPF or Kogenate is manufactured, distributed, or sold.


 


6.2           Audit. Bayer shall have the
right, on reasonable written advance notice (to the extent practicable, not
less than one (1) week advance notice), and during normal business hours, to
inspect and audit Supplier’s facilities, 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 Supplier’s 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 Supplier. Supplier shall use its
commercially reasonable efforts to accommodate any reasonable request made by
Bayer to inspect such facility. Supplier shall respond in writing to Bayer
regarding any items of noncompliance identified by Bayer during such
inspections or audits within fifteen (15) days of Bayer’s notice thereof and
shall develop a plan, reasonably satisfactory to Bayer, to remedy any such
items of noncompliance within sixty (60) days of notice thereof and shall
remedy such items of 


 


7

















 


noncompliance as set forth
in such plan, the failure of which shall entitle Bayer to terminate this
Agreement in accordance with Section 10.1 hereof.


 


6.3           Regulatory Filings. Supplier shall promptly
accommodate all requests made by any Regulatory Authority to audit Supplier’s
facilities. Bayer shall have the right to review, during the Term and for a
period of five (5) years thereafter, all audit findings or notices of any
Regulatory Authority as such may, directly or indirectly, bear upon the PPF,
the Supplier’s ability to manufacture PPF or any of Supplier’s obligations
under this Agreement. Supplier shall develop and provide to Bayer a plan,
reasonably satisfactory to Bayer, to remedy, and shall remedy, any deficiencies
identified as a result of such regulatory inspection in the timeframes provided
in the applicable inspection report or the applicable Regulations. Supplier
shall promptly notify Bayer (i) after Supplier becomes aware of any
Regulatory Authority inspection of its facility and (ii) after Supplier
receives notice from any Regulatory Authority of any observation or regulatory
action, such as a warning letter. Supplier shall promptly provide a copy of any
audit finding with Supplier’s corrective action response to Bayer for items
that, directly or indirectly, relate to PPF or would affect Supplier’s ability
to manufacture PPF or any of Supplier’s obligations under this Agreement.


 


6.4           Regulatory Approvals. Bayer is solely
responsible for obtaining and maintaining all necessary Regulatory Approvals
from all Regulatory Authorities necessary to sell and market the Products. Supplier
shall upon request by Bayer and as reasonably necessary provide all documents
or information requested by Bayer to support Bayer’s efforts to obtain,
maintain, or defend the Regulatory Approvals necessary to sell the Products
and/or will maintain and/or modify its operations or facilities as required to
permit Bayer to obtain, maintain, or defend Regulatory Approvals necessary to
sell and market the Products; provided Bayer will reimburse Supplier the
reasonable direct costs Supplier incurs in making modifications requested by
Bayer and the Parties shall engage in a good faith negotiation to adjust the
Price set forth in Section 4.1 to reflect the increase or decrease of ongoing
costs of supplying PPF hereunder resulting from any such modifications;
provided further  that if the
Parties cannot reach agreement to adjust the Price pursuant to this Section 6.4
despite such good faith negotiations, then (i) if the requested modifications
will affect only the PPF operations of Supplier at its Clayton, North Carolina
facility, the matter shall be resolved in accordance with Section 13.9, or (ii)
if the requested modifications will in Supplier’s sole discretion adversely
affect in any material manner other operations of Supplier at its Clayton,
North Carolina facility separate from its PPF operations at its Clayton, North
Carolina facility, Supplier shall not be required to make any such
modifications until the Parties reach such agreement; provided further  Bayer will have no obligation to reimburse
Supplier for the costs of any maintenance, repair or replacement of existing
facilities or for the substitution of their equivalent or for any increases in
costs associated with Supplier’s conduct of operations in a fashion similar to
or equivalent to the manner in which those operations were being conducted in
the absence of such request on the date of this Agreement.


 


6.5           Onsite Personnel. At the expense of Bayer,
Bayer shall be entitled, in its sole discretion, to have a designated employee
(which designated employee may be different persons from time to time) of Bayer
present at Supplier’s facility in Clayton, North Carolina for the purposes of
monitoring PPF production and quality control. Such designated employee shall
(a) have access to all areas of Supplier’s facility relating to PPF production,
(b) comply with all safety 


 


8

















 


and health laws,
regulations, policies and procedures applicable to personnel of Supplier at
Supplier’s facility and (c) remain an employee of Bayer and continue to receive
all compensation and benefits directly from Bayer or its affiliates. Notwithstanding
anything to the contrary in the foregoing, the presence of a Bayer designated
employee at Supplier’s facility and any action taken by such employee in no way
impairs or waives any right or remedy Bayer may otherwise have pursuant to the
terms of this Agreement.


 


ARTICLE
7  NONCONFORMING
PRODUCT AND RECALLS


 


7.1           Nonconforming Product. In the event that Supplier
provides PPF 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
Product”), Supplier will at no cost to Bayer, and as soon as
reasonably feasible, replace such Nonconforming Product with an equivalent
amount of conforming PPF. Bayer shall destroy all Nonconforming Product and
promptly provide a certificate of destruction to Supplier. Supplier shall
reimburse Bayer for the reasonable costs of such destruction. In addition to
those obligations set forth above, Supplier shall provide Bayer with the
identification number of any plasma unit that was pooled and manufactured into
a batch or lot of Nonconforming Product delivered to Bayer.


 


7.2           General Requirements. Bayer shall maintain
accurate records of the quantities of PPF received and the intermediate and
final Products derived from such PPF.


 


7.3           Distribution and Use Records. Supplier
shall maintain and give Bayer access, upon advance notice and at reasonable
times, to, for a period of not less than fifteen (15) years from production,
donor records and test results with respect to each unit of plasma included in
PPF delivered to Bayer. Such records and results shall be maintained such that
they can rapidly and unequivocally be accounted for and made available to Bayer
within fourteen (14) days from the date of request. Bayer shall maintain and
give Supplier access, upon advance notice and at reasonable times, to, for a
period of not less than fifteen (15) years from the date of delivery, records
identifying the use of each lot of PPF and the Products into which such PPF was
processed (including without limitation, Kogenate®). Such records shall be maintained
such that the use of each lot of PPF can be rapidly and unequivocally accounted
for and made available to Supplier within fourteen (14) days from the date of
request. Bayer shall assist Supplier in identifying, tracking and controlling
the use of any PPF identified in post-donation information as contaminated or
otherwise unsuitable for processing into Products.


 


7.4           Adverse Events. Bayer shall record and
investigate all reports of adverse events in which Products manufactured from
PPF have been implicated. If Bayer determines that a Product has caused adverse
reactions as a result of such Product being manufactured using PPF, Bayer shall
immediately notify the applicable Regulatory Authorities as required by the
Regulations, and shall promptly notify Supplier. Supplier shall promptly notify
Bayer of any adverse event resulting in a market withdrawal or recall and/or
involving viral, bacterial or prion transmission associated with other
fractions processed from the same plasma units as the PPF or associated with a
specific plasma donor whose plasma was used in the manufacture of PPF.


 


9

















 


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 Kogenate® or other
Product, Bayer obtains preliminary evidence indicating that, according to
indications and dosage, the PPF used in the manufacture of such Product may
have caused such specific adverse reaction, each Bayer customer that received
any such Product shall be notified by Bayer 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. Bayer shall promptly
provide Supplier 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. Bayer 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 Product. In the event that Supplier believes a recall or
withdrawal of a Product may be necessary or appropriate, Supplier shall
promptly notify Bayer in writing. In the event that Bayer initiates a recall or
withdrawal of a Product, Bayer shall promptly notify Supplier.


 


7.7           Complaints. Bayer and Supplier will
cooperate in the reporting, investigation and evaluation of customer complaints
according to policies mutually determined by the Parties in writing.


 


7.8           Responsibility. In the event that any
market withdrawal, recall or third party return of any Product results from
Supplier’s supply of Nonconforming Product, then Supplier shall assume the
claims and costs associated with such withdrawal, recall or return and the
destruction of implicated Products to the extent attributable to Supplier’s
Nonconforming Product.


 


ARTICLE
8  FORCE
MAJEURE


 


For the
purpose of this Agreement, “Force Majeure” shall mean only (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 after the date hereof on the part of Supplier or Bayer, as the
case may be, unless, in the case of Supplier, Supplier is required as a result
of any statute, law, regulation, ordinance, rule, judgment, code, order, decree
or other requirement of a Regulatory Authority (“Applicable Law”), not initiated by
Supplier, to cease or materially curtail production primarily based upon (x)
violation of any Applicable Law which violation was in existence on the
Effective Date or (y) any condition in existence on the Effective Date or any
condition alleged in writing to have been in existence on or prior to the
Effective Date by a Regulatory Authority which condition remained outstanding
on the Effective Date and which condition constituted a violation or alleged
violation of Applicable Law or impacts the 
safety or efficacy of PPF; and (iv) in the case of Supplier, events,
circumstances, conditions and actions outside of the control of Supplier that
materially and adversely affect the plasma-derived products industry generally,
including 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; 


 


10

















 


any of (i), (ii), (iii) or (iv) of which, in
the case of the Supplier, prevents the Supplier from performing its obligations
under this Agreement, or, any of (i), (ii) or (iii) of which, in the case of
Bayer, prevents Bayer from producing Kogenate or performing its obligations under
this Agreement; provided that nothing in clause (iii) or (iv) shall excuse
Supplier from complying with cGMPs or excuse Supplier from remedying those
matters which were capable of remedy by Supplier through the application of
commercially reasonable efforts prior to the occurrence of the events
identified in (iii) or (iv) preventing Supplier from performing under the
Agreement. Notwithstanding anything in this Agreement to the contrary, except
Section 10.7, Article 12 and Article 13, 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 Bayer 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.


 


ARTICLE
9  REPRESENTATIONS
AND WARRANTIES AND DISCLAIMER


 


9.1           Regulatory Requirements. Supplier
represents and warrants that Supplier has all material government approvals,
permits and licenses necessary or desirable in the performance of its
obligations under this Agreement. Notwithstanding the foregoing, Supplier shall
not be deemed to be in breach of this Section 9.1 if such breach derives from
Bayer’s failure to comply with its obligation at the Closing under the
Contribution Agreement with respect to all material government approvals
necessary in the performance of its obligations under this Agreement.


 


9.2           Debarment. Supplier 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). Supplier agrees to notify Bayer promptly in the event
any person providing services to Supplier under the scope of this Agreement is
debarred or becomes subject to debarment.


 


9.3           Compliance. (i)  Bayer represents and warrants as of the time
immediately prior to the Closing (as defined in the Contribution Agreement)
that the manufacture, processing, distribution, testing, transport, storage,
disposal and other handling of PPF by Bayer until delivery to and processing at
Bayer’s facility located at Berkeley, California (i) did conform to applicable
SOPs, the Specifications, cGMPs and the Regulations, and (ii) were free from
defects in materials and workmanship and were not adulterated or misbranded
within the meaning of the applicable Regulations.


 


(ii)  Supplier represents and warrants that the
manufacture, processing, distribution, testing, transport, storage, disposal
and other handling of PPF by Supplier until delivery to and 


 


11

















 


processing by Bayer 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. (i) Bayer represents and
warrants as of the time immediately prior to the Closing (as defined in the
Contribution Agreement) that the manufacture, processing, testing,
distribution, transport, storage, disposal and other handling of PPF did not
infringe the intellectual property rights of any third party and that Bayer
validly possessed all licenses to third party intellectual property necessary
or appropriate for the manufacture, processing, testing, distribution,
transport, storage, disposal and other handling of PPF.


 


(ii)           During the Term of this Agreement, Supplier represents and
warrants that the manufacture, processing, testing, distribution, transport,
storage, disposal and other handling of PPF pursuant to this Agreement will not
infringe the intellectual property rights of any third party; provided that for
purposes of making this representation and warranty Supplier is entitled to
rely to the extent applicable on the representations and warranties made by
Bayer as of the Closing Date (as defined in the Contribution Agreement) pursuant
to the Contribution Agreement for so long as such representations and
warranties survive in the Contribution Agreement. During the Term of this
Agreement, Supplier agrees to maintain at its sole cost and expense all
licenses to third party intellectual property necessary or appropriate for the
manufacture, processing, testing, distribution, transport, storage, disposal
and other handling of PPF.


 


9.5                                 Representations
and Warranties.


 


(a)           Bayer hereby represents and warrants
to Supplier that:


 


(i)            Due
Organization, Good Standing and Power. Bayer is a limited liability company
duly organized, validly existing and in good standing under the laws of the
state of Delaware. Bayer 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. Bayer 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 Bayer or on the
consummation of the transactions contemplated hereunder. Bayer 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 Bayer
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 Bayer and do not require
the approval of the stockholders of Bayer. This Agreement has been duly
executed and delivered by Bayer and constitutes the legal, valid and binding
obligation of 


 


12

















 


Bayer 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 Applicable
Law regarding the enforceability of arbitral awards and judicial decisions.


 


(iii)          Lack
of Conflicts. Neither the execution and delivery of this Agreement by Bayer
or the consummation by it of the transactions contemplated hereby, does or will
(i) conflict with, or result in the breach of any provision of, the Charter
Documents of Bayer or (ii) violate any Applicable Law or any permit, order,
award, injunction, decree or judgment of any Governmental Authority applicable
to or binding upon Bayer or to which any of its properties or assets is
subject.


 


(iv)          No
Consents. The execution, delivery and performance of this Agreement by Bayer
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 Bayer for the consummation of the
transactions contemplated by this Agreement.


 


(b)           Supplier hereby represents and
warrants to Bayer that:


 


(i)            Due
Organization, Good Standing and Power. Supplier is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Delaware. Supplier 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. Supplier 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 Supplier or on
the consummation of the transactions contemplated hereunder. Supplier 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 Supplier
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 Supplier and do not
require the approval of the stockholders of Supplier. This Agreement has been
duly executed and delivered by Supplier and constitutes the legal, valid and
binding obligation of Supplier 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


 


13

















 


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 Supplier
or the consummation by it of the transactions contemplated hereby, does or will
(i) conflict with, or result in the breach of any provision of, the Charter
Documents of Supplier or (ii) violate any Applicable Law or any permit, order,
award, injunction, decree or judgment of any Governmental Authority applicable
to or binding upon Supplier or to which any of its properties or assets is
subject.


 


(iv)          No
Consents. The execution, delivery and performance of this Agreement by Supplier
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 Supplier for the consummation of
the transactions contemplated by this Agreement.


 


9.6           Disclaimer. SUPPLIER 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.


 


ARTICLE
10  TERMINATION


 


10.1         Termination for Cause. If either Party commits a
substantial violation of any material provision of the Agreement (which means
(i) in the case of Bayer, nonpayment of amounts owing to Supplier in accordance
with Section 5.1 or any other material breach of any representation, warranty,
covenant or performance obligations under this Agreement by Bayer and (ii) in
the case of Supplier, any material breach of any representation, warranty,
covenant or performance obligation under this Agreement (other than breach of its
obligation to deliver PPF under this Agreement, any such breach to be governed
exclusively under Section 11.4 hereof)), the other Party may, without prejudice
to any other right or remedy, and after giving the breaching Party sixty (60)
days’ written notice of the breach, terminate the 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 sixty (60) 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 direct damages and
losses arising as a result of any such material breach, including lost profits
but not including consequential damages, 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 Supplier’s Force Majeure. Bayer may
terminate this Agreement in its sole discretion upon thirty (30) days’ prior
written notice in the event of any failure or inability of Supplier extending
beyond ninety (90) days to provide supply hereunder (other than from inventory)
due to Force Majeure. In the event of termination under this Section 10.2,
Supplier


 


14

















shall have no liability for
damages arising solely from such termination or otherwise excused by a Force
Majeure.


 


10.3         Other Termination Provisions. By Bayer if
Supplier or by Supplier if Bayer:


 


(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 of 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)          has 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
is 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         Termination Without Cause. In the event
there is an express or constructive termination by Supplier not meeting
requirements of Section 10.1 of this Agreement and constituting an intentional
or willful breach of this Agreement, other than a Force Majeure event
applicable to Supplier under Article 8 hereof (“Termination Without Cause”), Supplier
will be liable for all losses and damages suffered by Bayer, including all lost
profits and all consequential damages, for the period which is the shorter of
(a) the remainder of the unexpired Term and any unexpired Extended Terms, other
than any such unexpired Extended Terms for which Bayer has failed to give
notice of its intent to renew for an Extended Term within the time periods
provided in Article 1, (b) the period between Termination Without Cause and
commencement of an uninterrupted alternate source of PPF supply on terms and
conditions comparable to those hereunder, and (c) the period between
Termination Without Cause and Bayer’s completion of the conversion of its
Kogenate process to one which does not require PPF. In no event shall the
damages and losses which Supplier must pay to Bayer under this Agreement (other
than pursuant to Section 10.1, and Section 11.1) exceed $150 million.


 


10.5         Effect of Termination. Upon termination of this
Agreement, Supplier shall immediately cease delivery of all PPF under this
Agreement, and Supplier shall prepare and submit to Bayer an invoice for all
PPF shipped by Supplier and not paid for by Bayer. Bayer shall within thirty
(30) days of receipt thereof pay the full amount of such invoice and all other
sums owed to Supplier; provided, however, that if the aggregate total of the
Purchase Orders placed by Bayer


 


15

















prior to the effective date of such termination does not meet the
Binding Forecast for the then current calendar year and in the event that this
Agreement is terminated by Supplier pursuant to Section 10.1, Bayer shall be
obligated to pay amounts associated with PPF to be delivered under the then
current Binding Forecast and, at Bayer’s sole discretion, Supplier shall be
obligated to deliver the same.


 


10.6         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 Article 10. Each Party shall have such non-monetary rights and
remedies provided under this Agreement or under law or in equity for breaches
of this Agreement, but only limited to the remedy of specific performance.


 


10.7         Special Assistance. In the event that Bayer
terminates this Agreement pursuant to Sections 10.1 (other than a termination
as a result of breach by Bayer), 10.2 or 10.3, there is a Termination Without
Cause or a Force Majeure prevents Supplier from delivering PPF for a period of
three (3) months in accordance with any Purchase Orders issued under Binding
Forecasts, Supplier agrees to use commercially reasonable efforts to assist
Bayer (at the cost and expense of Bayer) to transfer the manufacture of PPF to
any other facility or facilities selected by Bayer, such best efforts to
include providing assistance in qualifying another facility or facilities to
manufacture PPF, providing SOPs and granting royalty-free licenses for the
remainder of the Term to intellectual property related to the manufacture of
PPF to such facility or facilities and providing such other assistance in
connection therewith reasonably requested by Bayer.


 


10.8         Survival. In the event of any
termination or expiration of this Agreement, each of the provisions of Sections
2.4, 5.2, 6.1, 6.3, 6.4, 10.1, 10.4, 10.5, 10.6, 10.7 and 10.8 and Articles 3,
7, 8, 9, 11, 12 and 13 shall survive as long as any such provision remains
applicable, provided that Article 11 shall survive indefinitely, unless a
shorter period for survival is provided in any such Article or Section.


 


ARTICLE
11  INDEMNITIES
AND DAMAGES


 


11.1         Indemnifications. Supplier hereby agrees to
save, defend and hold Bayer 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 any of the foregoing (together, the “Bayer Group”) harmless from and against
any and all claims, suits, actions, liabilities, expenses and/or losses,
including punitive or exemplary damages and reasonable attorneys’ fees and
expenses (“Claims”)
asserted by a person or entity other than a member of the Bayer Group arising
from any material breach of obligations under this Agreement by Supplier Group
(as defined below); provided that any Claims for failure to deliver PPF in
accordance with the terms of this Agreement shall be governed exclusively under
Section 11.4 hereof. Bayer hereby agrees to save, defend and hold Supplier 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 any of the foregoing (together, the
“Supplier Group”)
harmless from and against any and all Claims asserted by a person or entity
other than a member of the Supplier Group arising from any material breach of
obligations under this Agreement by the Bayer Group. Where a


 


16

















 


Claim arises directly or
indirectly from acts or omissions of both (i) the Supplier Group and (ii) the
Bayer Group, the obligation of the Supplier or Bayer to indemnify the other
shall not exceed the extent of the indemnifying party’s contribution to the
harm giving rise to the Claim.


 


11.2         Indemnification Process. Each party
indemnified under the provisions of this Agreement, upon receipt of written
notice of any Claim or the service of a summons or other initial legal process
upon it in any action instituted against it for which it may be entitled to
indemnification pursuant to this Agreement, shall promptly give written notice
of such Claim, or the commencement of such action, or threat thereof, to the
Party from whom indemnity shall be sought hereunder; provided, however, that
the failure to provide such notice within a reasonable period of time shall not
relieve the indemnifying party of any of its obligations hereunder except to
the extent the indemnifying party is prejudiced by such failure. Each
indemnifying party shall be entitled at its own expense to participate in the
defense of such Claim or action, or, if it shall elect, so long as it has
acknowledged in writing to the indemnified party its indemnification
obligations hereunder, by written notice to the indemnified party within twenty
(20) days of receipt of notice of the Claim or action from the indemnified
party to assume such defense, in which event such defense shall be conducted by
counsel chosen by such indemnifying party (without prejudice to the right of
the indemnified party to fully participate at its own expense through counsel
of its own choosing) which counsel may be any counsel reasonably satisfactory
to the indemnified party against whom such Claim is asserted or who shall be
the defendant in such action, and such indemnified party shall bear all fees
and expenses of any additional counsel retained by it or them, provided that
the indemnifying party shall obtain the consent of the indemnified party (which
consent may be withheld in its sole discretion) before entering into any
settlement, adjustment or compromise of such Claims, provided further that the
indemnifying party may, without the consent of the indemnified party, settle or
compromise or consent to the entry of any judgment in any action involving only
the payment of money which includes as an unconditional term thereof the
delivery by the claimant or plaintiff to the indemnified party of a duly
executed written release of the indemnified party from all liability in respect
of such Claim or action which written release shall be reasonably satisfactory
in form and substance to the indemnified party. Notwithstanding the immediately
preceding sentence, if the named parties in such action (including impleaded
parties) include the indemnified and the indemnifying parties, and the
indemnified party shall have been advised by counsel that there may be a
conflict between the positions of the indemnifying party and the indemnified
party in conducting the defense of such action or that there are legal defenses
available to such indemnified party different from or in addition to those
available to the indemnifying party, then counsel for the indemnified party,
shall be entitled, if the indemnified party so elects, to conduct the defense
to the extent reasonably determined by such counsel to be necessary to protect
the interests of the indemnified party, at the expense of the indemnifying
party. If the indemnifying party shall elect not to assume the defense of such
Claim or action, such indemnifying party shall reimburse such indemnified party
for the reasonable fees and expenses of any counsel retained by it, and shall
be bound by the results obtained by the indemnified party in respect of such
Claim or action; provided, however, that no such Claim or action shall be
settled without the written consent of the indemnifying party (which consent
shall not be unreasonably withheld or delayed).


 


11.3         Insurance. During the Term of this
Agreement and for a period of at least two (2) years following the expiration
or earlier termination of this Agreement, Supplier shall maintain, at its


 


17

















sole cost and expense,
general liability insurance, including product liability coverage, with bodily
injury, death and property damage limits, in such amounts and with such scope
of coverage as is consistent with plasma industry standards. Supplier shall
have its insurance carrier furnish to Bayer certificates stating that all
insurance required under this Agreement is in force. Such certificates shall
indicate any deductible and self-insured retention and the effective expiration
dates of the policies. All certificates are to stipulate that Bayer shall be
given thirty (30) days written notice of all cancellation, non-renewal or
material changes in policy. Bayer shall be named as an additional insured on
all insurance policies obtained by Supplier in accordance with this Section
11.3. Supplier also agrees to waive and will require its insurers to waive all
rights of subrogation against Bayer, its directors, officers and employees on
all of the foregoing coverages.


 


11.4         Liquidated Damages And Other Damages For Failure To
Deliver PPF. (a) The Parties acknowledge that the anticipated
damages to Bayer in the event of a failure by Supplier to deliver PPF to Bayer
for a prolonged period of time is incapable of accurate estimation as of the
Effective Date and that Bayer will be unable for a prolonged period of time to
mitigate damages that it will suffer in such event.


 


(b) Subject to the last sentence of this subsection (b), in the event
at the conclusion of any month Supplier has failed to deliver during the
immediately preceding rolling twelve (12) months an amount of PPF (including
deliveries from Inventory Reserves held by Supplier (but not held by Bayer) in
accordance with Section 2.5) which conforms to the Specifications aggregating
at least seventy-five percent (75%) of the Purchase Orders for the immediately
preceding rolling twelve (12) months (“Threshold Deliveries”) and such failure is
not the result of Force Majeure (each, a “Triggering Event”), then Supplier shall
promptly pay Bayer liquidated damages as follows:


 


For each month following a Triggering Event
Supplier fails to make Threshold Deliveries, Supplier shall initially pay $1.25
million;


 


After Supplier has failed to make Threshold
Deliveries for two consecutive months following a Triggering Event, Supplier
shall thereafter pay $2.5 million per month for each following consecutive
month in which Supplier fails to make Threshold Deliveries; and


 


After Supplier has failed to make Threshold
Deliveries for five consecutive months following a Triggering Event, Supplier
shall pay $5 million per month for each additional consecutive month in which
Supplier fails to make Threshold Deliveries.


 


The first rolling twelve (12) months shall commence on the first day of
the calendar month immediately following the Effective Date (the “Commencement Date”). Any
liability for payment of damages specifically under this Section 11.4(b) shall
not arise before the first day of the thirteenth month after the Commencement
Date.


 


 


18

















 


(c) From the Effective Date through December 31, 2010, in no event
shall the aggregate amount of liquidated damages payable by Supplier for all
such incidences to Bayer pursuant to subsection (b) above exceed $35 million
(as reduced below, the “Cap”).
From January 1, 2011 through December 31, 2011, the Cap shall be reduced to an
amount equal to $17.5 million minus the aggregate liquidated damages payable by
Supplier pursuant to subsection (b) above from the Effective Date through
December 31, 2010, but not less than zero. No liquidated damages
shall be payable by Supplier pursuant to subsection (b) after December 31,
2011.


 


(d) If the liquidated damages provision provided for in this Section
11.4 is deemed unenforceable for any reason by a court of competent
jurisdiction, Supplier shall pay an amount to Bayer equal to the direct damages
or losses incurred by Bayer, including without limitation all lost profits,
costs of cover and delivery penalties but excluding consequential damages as a
result of Supplier’s failure to deliver PPF, subject to the Cap.


 


(e) For the avoidance of doubt, the requirement to pay liquidated
damages in this Section 11.4 only applies where there has been a failure of
Supplier to make Threshold Deliveries and nothing in this Section 11.4 shall be
construed as relieving Supplier of liability for its failure to deliver PPF
which conforms to the Specifications in the amounts required by Sections 2.1, 2.2
or 2.3 and/or meeting the requirements set forth in Section 3.1 in
circumstances (other than Force Majeure) where Supplier has not made full
deliveries of PPF (which may include deliveries from Inventory Reserves held by
Supplier and Bayer in accordance with Section 2.5) in full compliance with a
Purchase Order presented in accordance with Section 2.3 (“Circumstance of Under-Delivery”)
to the extent provided in this Section 11.4(e). In the event at the conclusion
of any month Supplier has failed to deliver during the immediately preceding
rolling three months PPF (including deliveries from Inventory Reserves held by
Supplier (but not held by Bayer) in accordance with Section 2.5) which conforms
to the Specifications in an amount aggregating one hundred percent (100%) of
the Purchase Orders for the immediately preceding rolling three (3) months and
Bayer suffers direct damages as a result thereof (without taking into account
Bayer’s Inventory Reserves), Bayer may notify Supplier to that effect, in which
case Supplier shall have three (3) additional months within which to deliver
such PPF. If Supplier does in fact deliver such PPF within such period, then no
damages shall apply for such Circumstances of Under-Delivery. If Supplier does
not deliver such PPF within such period, then Supplier shall be liable to Bayer
for all direct damages or losses Bayer suffers after depleting Bayer’s
Inventory Reserves, including without limitation all lost profits, costs of
cover and delivery penalties but excluding consequential damages for each
Circumstance of Under-Delivery in an amount not exceeding, for that calendar
year, twice the amount of all revenues to Supplier from this Agreement for such
calendar year (calculated as though it had complied with its delivery obligations
in such calendar year based on actual Purchase Orders plus the rolling forecast
issued the month prior to the three-month period of underdelivery as to those
months for which Purchase Orders had not yet been issued), provided that any
such recovery shall be reduced (i) by any amounts previously paid pursuant to
Section 11.4(b) with respect to the failure to deliver in the same period, (ii)
by any amount that Bayer actually recovers under any insurance it maintains and
(iii) to the extent Bayer has not complied with its obligations under Section
2.5 hereof. In no event shall Supplier have liability for non-delivery of PPF
greater than the aggregate limits set forth in Section 10.4.


 


19

















 


The first rolling three (3) months shall commence on the date that is
four (4) months following the Commencement Date.


 


(f)            The rights and
remedies of Bayer provided in this Section 11.4 shall be Bayer’s exclusive
remedy for recovery of monetary damages with respect to the Supplier’s failure
to deliver PPF in amounts required by this Agreement. Bayer shall have such
non-monetary rights and remedies provided under this Agreement or under law or
in equity for Supplier’s failure to deliver PPF in amounts required by this
Agreement, including the remedy of specific performance.


 


11.5         Insurance Recoveries. If and to the extent the
Supplier has acquired insurance in compliance with Section 11.3, and to the
extent such coverage is inadequate to cover all Claims asserted against Supplier
and Bayer and if and to the extent Bayer has its own policy of insurance
purporting to provide coverage for Claims against Bayer, Bayer shall not be
entitled to indemnification from Supplier for such claims under Section 11.1
until Bayer has utilized all commercially reasonable means to recover such loss
under its policy of insurance.


 


ARTICLE
12  CONFIDENTIALITY


 


12.1         Confidentiality Obligations. All
information provided by one Party to the other Party in connection with this
Agreement (including without limitation, the Specifications and forecasts
provided by Bayer) shall be maintained in strict confidence by the receiving
Party. Such information shall remain the property of the providing Party,  and the receiving Party shall not make use
of any such information except for the purposes for which it was provided. At
the termination of this Agreement, the receiving Party shall promptly return to
the providing Party any physical embodiments (including copies) of any such
information. Each Party agrees to keep confidential the existence of this
Agreement, as well as all of its terms and conditions; provided that if a
public announcement or disclosure is required by law, rule, regulation, court
order, subpoena, interrogatory or other discovery request (including without
limitation applicable securities laws or stock exchange regulations), and
subject to Section 12.2(v), the Party required to make the public announcement
or disclosure shall be permitted to make such disclosure and shall provide
prompt prior written notice of such requirement to the other Party, and the
Parties shall thereafter negotiate in good faith, to the extent appropriate and
feasible, the contents of the public announcement or disclosure.


 


12.2         Exceptions. The covenants of the
receiving Party contained in Section 12.1 shall not apply to information which:
(i) is already in the public domain at the time of disclosure; (ii) becomes
part of the public domain through no action or omission of the receiving Party
after disclosure to the receiving Party; (iii) is already known to the
receiving Party on a non-confidential basis at the time of disclosure, as
evidenced by the receiving Party’s written records, except for information that
was known to Bayer prior to the Effective Date; (iv) has been or is disclosed
to the receiving Party in good faith by a third party who was or is not, at the
time of disclosure, under any obligation of confidence to the other Party
hereto at the time the third party disclosed such information; or (v) is
required to be disclosed by law, provided that the receiving Party shall
cooperate with the disclosing Party (at the disclosing Party’s expense) in
obtaining any available protection for such information to be disclosed.


 


20

















 


12.3         Term of Obligations. This Article 12 shall
survive termination of this Agreement for a period of five (5) years.


 


ARTICLE
13  MISCELLANEOUS


 


13.1         Consent to Assignment. This Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, and it is not
intended to confer upon any other person any rights or remedies hereunder. Neither
this Agreement nor any of the rights, interests or obligations hereunder may be
assigned by any of the parties without the prior written consent of the other
party hereto, except that each party may at any time assign any or all of its
rights or obligations hereunder to one of its wholly owned subsidiaries (but no
such assignment shall relieve such party of any obligations under this
Agreement). Notwithstanding the foregoing, Supplier may assign this Agreement
and any or all rights or obligations hereunder to (i) any affiliate of Supplier
provided that any such affiliate becomes a party to this Agreement, (ii) any
lender of Supplier as collateral security or (iii) any successor in interest to
Supplier, it being understood that any such successor shall continue to supply
PPF under this Agreement from the Clayton, North Carolina facility; provided
that any such successor becomes a party to this Agreement; provided that no
assignment under (i), (ii) or (iii) above shall relieve Supplier from any
obligation hereunder. Bayer may assign this Agreement and any or all rights or
obligations hereunder to (i) any affiliate of Bayer provided that any such
affiliate becomes a party to this Agreement or (ii) any successor in interest
to Bayer of its entire Kogenate business, provided that any such successor
becomes a party to this Agreement; provided that no assignment under (i) or
(ii) above shall relieve Bayer from any obligation hereunder. Any purported
assignment in contravention of this Section 13.1 shall be void.


 


13.2         Entire Agreement and Amendments. This
Agreement, together with the Exhibits, constitutes the entire agreement between
the Parties, and merges and supersedes all previous agreements and
understandings between Bayer and Supplier, whether oral or written, relating to
the subject matter hereof. In the event that this Agreement conflicts with any
Purchase Order, invoice or other written document, the terms and conditions of
this Agreement shall apply. No amendment, modification or interpretation of
this Agreement will have any effect unless it is reduced to writing, makes
specific reference to this Agreement and is signed by all of the Parties.


 


13.3         Notices. All notices, requests,
demands and other communications required or permitted hereunder shall be in
writing and if mailed by prepaid first class mail or certified mail, return
receipt requested, at any time other than during a general discontinuance of
postal service due to strike, lockout or otherwise, shall be deemed to have
been received on the earlier of the date shown on the receipt or three (3)
business days after the postmarked date thereof and, if telexed or telecopied,
the original notice shall be mailed by prepaid first class mail within
twenty-four (24) hours after sending such notice by telex or telecopy, and
shall be deemed to have been received on the next business day following
dispatch and acknowledgment of receipt by the recipient’s telex or telecopy
machine. In addition, notices hereunder may be delivered by hand, in which
event the notice shall be deemed effective when delivered, or by overnight
courier, in which event the notice shall be deemed to have been received on the
next business day following delivery to such courier. All notices and other


 


21

















 


communications under this Agreement shall be given to the parties hereto
at the following addresses:


 


(a)                                  If to Bayer:


 


Bayer HealthCare LLC


Biological Products Division


800 Dwight Way


P.O. Box 1986


Berkeley, CA 94710


Attention:  Contract Manager


 


With a copy to:


 


Bayer HealthCare LLC


400 Morgan Lane


West Haven, CT  06516-4175


Attention:  General Counsel


 


Marilyn Mooney


Fulbright & Jaworski L.L.P.


801 Pennsylvania Avenue, N.W.


Washington, D.C. 20004


 


(b)                                 If to Supplier:


 


Talecris Biotherapeutics, Inc.


P.O. Box 13887


79 TW Alexander Drive


4101 Research Commons


Research Triangle Park


Raleigh, NC  27709


Fax:  (919) 316-6669


 


With copies to:


 


Alison S. Ressler, Esq.


Sullivan & Cromwell LLP


1888 Century Park East


Suite 2100


Los Angeles, CA  90067


Fax:  (310) 712-8800


 


and


 


22

















 


Raymond B. Grochowski, Esq.


Latham & Watkins LLP


555 11th Street, N.W.


Suite 1000


Washington, D.C. 20004


Fax:  (202) 637-2201


 


Any Party hereto may change its address
specified for notices herein by designating a new address by notice in
accordance with this Section 13.3.


 


13.4         Independent Contractor. This
Agreement does not create an employer-employee relationship between the
Parties, and is not an agency, joint venture or partnership. Neither Party
shall have the authority to act for the other or to bind the other in any way,
nor to sign the name or to represent that the other is in any way responsible
for the acts or omissions of the other. Supplier shall maintain its status as
an independent contractor engaged in the selling of PPF to Bayer.


 


13.5         Non-Waiver. The waiver by either Party
of any breach of any term, covenant, condition or agreement contained herein or
any default in the performance of any obligations hereunder shall not be deemed
to be a waiver of any other breach or default of the same or of any other term,
covenant, condition, agreement or obligation.


 


13.6         Choice of Law. The rights and obligations
of the Parties arising out of the Agreement shall be governed in all respects
by the laws of the State of New York, without giving effect to its conflict of
laws provisions.


 


13.7         Captions. All captions are inserted
for convenience only, and will not affect any construction or interpretation of
this Agreement.


 


13.8         Severability. Any provision of this
Agreement which is or may become prohibited or unenforceable, as a matter of
law or regulation, will be ineffective only to the extent of such prohibition
or unenforceability and shall not invalidate the remaining provisions hereof if
the essential purposes of this Agreement may be given effect despite the prohibition
or unenforceability of the affected provision.


 


13.9         Dispute Resolution.


 


(a)           Resolution
by the Parties. The Parties shall attempt to resolve any dispute,
controversy, claim or difference arising out of, or in connection with, this
Agreement amicably and promptly by negotiations between executives who have
authority to settle the controversy. Either Party may give the other Party
written notice of any dispute not resolved in the normal course of business (“Notice of Dispute”). Within
seven (7) days after delivery of such Notice of Dispute, executives of the
Party shall agree to meet at a mutually acceptable time and place, and
thereafter as often as they reasonably deem necessary, to attempt to resolve
the dispute. If the matter has not been resolved within ten (10) days of the
first meeting of such executives (or, if the Parties are unable to mutually
agree upon an acceptable time and place to meet, within ten (10) days of


 


23

















 


the disputing Party’s Notice of Dispute),
either Party may, by notice to the other Party (“Dispute Escalation Notice”), refer the
matter to the respective officers of the Parties designated below.


 


For Bayer:                                       Executive
Vice President, Bayer HealthCare LLC 


and President, Biological Product Division


 


With a copy to:


 


Bayer HealthCare LLC


400 Morgan Lane


West Haven, CT  06516-4175


Attention:  General Counsel


 


For Supplier:                          Chief
Executive Officer of Talecris Biotherapeutics, Inc.


 


Such officers
shall negotiate in good faith to resolve the matter in an amicable manner
within ten (10) days of the Dispute Escalation Notice. In the event the matter
is not resolved within such ten (10) days, either Party may initiate
arbitration of the dispute as provided for in this Section 13.9.


 


(b)           Binding
Arbitration. In any event, if any dispute, other than with respect to
Article 10 and Section 4.2(b), is not resolved in accordance with this Section
13.9(a) within thirty (30) days of the date in which such dispute arose, either
Party may submit the dispute to binding arbitration by giving the other Party
notice (the “Arbitration
Notice”). Such arbitration shall be conducted in accordance with
the then valid Commercial Arbitration Rules, in effect as of the Effective
Date, of the American Arbitration Association (the “Rules”). The
arbitration shall be held in the English language in New York, New York (U.S.)
in accordance with the substantive law of the State of New York, without giving
effect to its conflict of laws provisions. The arbitration will be conducted by
one (1) arbitrator knowledgeable in the subject matter that is at issue in the
dispute and who is selected by mutual agreement of the Parties or, failing such
agreement by thirty (30) days after the Arbitration Notice was given, will be
selected according to the Rules. Either Party reserves the right to object to
any individual arbitrator who shall be employed by or affiliated with a
competing organization. The arbitrator shall render a decision no later than
ninety (90) days from the date of such arbitrator’s selection. The award of the
arbitrator shall be final and binding on both Parties. Each Party hereby
submits itself to the jurisdiction of the courts of the place where arbitration
is held, but only for the entry of judgment with respect to the decision of the
arbitrator hereunder. Notwithstanding the foregoing, judgment upon the award
may be entered in any court in the state where the arbitration takes place, or
any court having jurisdiction over the Parties. In the event of any actual or
threatened breach or default which could give rise to irreparable harm, nothing
in this Agreement shall prevent either Party from seeking injunctive relief (or
any other provisional remedy or equitable relief) from any court having
jurisdiction over the Parties and the subject matter of this dispute to protect
their respective rights pending the outcome of the arbitration. The Parties
bind themselves to carry out the awards of the arbitrator. The fees and
expenses of the arbitrators, the fees and expenses


 


24

















 


of the court report and any expense for a
hearing room, and reasonable attorney’s fees may be awarded to the prevailing
party by the arbitrator, or if such award is not made, will be shared equally
by the Parties. The Parties will otherwise bear their respective expenses of
arbitration.


 


(c)           Reviewing
Accountant. If the Parties fail to resolve under Section 13.9(a) any
dispute arising under Section 4.2(b) within forty-five (45) days, the Parties
shall select a firm of independent certified public accountants of national
standing (the “Reviewing
Accountant”) to resolve the areas of dispute or, if the Parties
fail to agree upon a Reviewing Accountant within twenty (20) days after the
45-day period lapses, such firm shall be selected by lot from among all
so-called “Big Four” firms not having (and not having announced a pending
combination with another firm having) a disqualifying interest with respect to
either party. The performance of any such firm as the Reviewing Accountant
under this Agreement shall not constitute a disqualifying interest. The Parties
shall make available to the Reviewing Accountant all work papers and all other
information and material in their possession relating to the matters in dispute.
The Reviewing Accountant shall be instructed by the Parties to use its best
efforts to deliver to the Parties its determination as promptly as practicable
after such submission of the dispute to the Reviewing Accountant. The
determination of the Reviewing Accountant shall be final and binding on the
Parties. Each Party shall bear its own expenses and the fees and expenses of
its own representatives and experts, including its independent accountant, in
connection with the preparation, review, dispute (if any) and final resolution
of the dispute. The Parties shall share equally in the costs, expenses and fees
of the Reviewing Accountant.


 


13.10       Defined Terms. Defined terms used but not
otherwise defined in this Agreement shall have the meaning ascribed to those
terms in the Contribution Agreement.


 


13.11       Set-Off. No Party to this Agreement
shall have any right of set off with respect to amounts it has an obligation to
pay hereunder.


 


{Remainder of this page has been intentionally left blank}


 


25

















 


IN WITNESS WHEREOF,
the Parties have caused their duly authorized representatives to execute this
Agreement as of the Effective Date.


 


	
   

  	
  BAYER HEALTHCARE LLC

  
	
   

  	
  Biological Products Division – Berkeley
  Facility

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph A. Akers

  
	
   

  	
  Name:

  	
  Joseph A. Akers

  
	
   

  	
  Title:

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BAYER HEALTHCARE LLC

  
	
   

  	
  Biological Products Division – Berkeley
  Facility

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kieth R. Abrams

  
	
   

  	
  Name:

  	
  Kieth R. Abrams

  
	
   

  	
   

  	
  Title:

  	
  Assistant Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TALECRIS BIOTHERAPEUTICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lawrence D. Stern

  
	
   

  	
  Name:

  	
  Lawrence D. Stern

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
				



 


26

















 


Exhibit Index


to


Supply Agreement


between


Bayer HealthCare LLC and Talecris
Biotherapeutics, Inc.


 


	
  Exhibit A

  	
   

  	
  Required Quantity

  
	
  Exhibit B

  	
   

  	
  PPF Forecast

  
	
  Exhibit C

  	
   

  	
  PPF Storage Specifications

  
	
  Exhibit D

  	
   

  	
  PPF Manufacturing Agreement

  
	
  Exhibit E

  	
   

  	
  PPF Specifications

  
	
  Exhibit F

  	
   

  	
  Price

  



 

















 


EXHIBIT A


 


Required Quantity


 




	
  Calendar
  Year

  	
   

  	
  [***]

  	
   

  
	
  2004

  	
   

  	
  [***]

  	
   

  
	
  2005

  	
   

  	
  [***]

  	
   

  
	
  2006 through 2008

  	
   

  	
  [***]

  	
   

  






 






* Such quantities may be adjusted in accordance with Section 2.1


 ***
CONFIDENTIAL TREATMENT REQUESTED


 

















 


Execution Copy


 


EXHIBIT B


 


2005 Product Forecast


 


	
  Month

  	
   

  	
  PPF Powder

  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Jan

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Feb

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mar

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Apr

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  May

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jun

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jul

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aug

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sep

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Oct

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Nov

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dec

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  [***]

  	
   

  



 


	
  Approved by 

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
  NewCo

  
	
   

  	
   

  
	
   

  	
   

  
	
  Approved by 

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
  Bayer

  



 


	
  Confidential Evaluation Material Subject to Confidentiality Agreement

  	
  Page 1 of 3

  



 






***CONFIDENTIAL TREATMENT REQUESTED


 


 

















EXHIBIT B (Cont'd.)


 


2006 Product Forecast


 


	
  Month

  	
   

  	
  PPF Powder

  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jan

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Feb

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mar

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Apr

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  May

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jun

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jul

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aug

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sep

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Oct

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Nov

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dec

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  [***]

  	
   

  



 


 


	
  Approved by 

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
  NewCo

  
	
   

  	
   

  
	
   

  	
   

  
	
  Approved by 

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
  Bayer

  



 


	
   

  	
  Page 2 of 3

  



 






***CONFIDENTIAL TREATMENT REQUESTED


 

















Execution Copy


 


EXHIBIT B (Cont'd.)


 


 


2007 Product Forecast


 


	
  Month

  	
   

  	
  PPF Powder

  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jan

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Feb

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mar

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Apr

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  May

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jun

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jul

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aug

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sep

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Oct

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Nov

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dec

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
  [***]

  	
   

  



 


	
  Approved by 

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
  NewCo

  
	
   

  	
   

  
	
   

  	
   

  
	
  Approved by 

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
  Bayer

  



 


	
  Confidential Evaluation Material Subject to Confidentiality Agreement

  	
  Page 3 of 3

  



 






***CONFIDENTIAL TREATMENT REQUESTED


 

















Execution Copy


 


Exhibit C


PPF Storage Specifications


 


(PPF Powder Specification # 08633609)


 


PPF Powder storage / shipment conditions: -20oC or colder


 


	
  Confidential Evaluation Material Subject to Confidentiality Agreement

  	
  Page 1 of 1

  



 


1

















 


Execution Copy


Page 1 of 3


Exhibit D


NewCo and Bayer HealthCare LLC, Berkeley

Manufacturing Agreement (PPF Powder)


 


MANUFACTURING AGREEMENT


 


This Manufacturing Agreement (Agreement) is between Talecris
Biotherapeutics, Inc. (f/k/a NPS BioTherapeutics, Inc.) (NewCo), located at
8368 US Highway 70 West, Clayton NC 27520, and Bayer Healthcare LLC (Bayer),
Biological Products Division, located at 800 Dwight Way, Berkeley, CA 94710.
The “Effective Date” is March 31, 2005.


 


Whereas the United States Food and Drug Administration (FDA)
regulations allow that a shipment or other delivery of a drug (biologic) which
is, in accordance with the practice of the trade, to be processed, labeled, or
repacked in substantial quantity at an establishment other than that where
originally processed or packed, shall be exempt, during the time of
introduction and movement in interstate commerce and the time of holding at
such  establishment, from compliance with
the labeling and packaging requirements of Sections 501(b) and 502 (b), (e), (f)
and (g) of the Federal Food, Drug and Cosmetic Act [21 U.S.C. 351(b) and
352(b), (e), (f) and (g)], if the requirements of 21 CFR §201.150 are met.


 


NOW THEREFORE, it is agreed as follows:


 


1.               INTENT OF PARTIES


 


It is the express intent of the parties hereto to adhere to all of the
requirements set forth at 21 CFR §201.150 and other applicable provisions of
the CFR.


 


2.               MAINTENANCE OF PROPER
RECORDS


 


Each party agrees to maintain complete and adequate records, where
applicable, pertaining to the methods used in and the facilities and controls
used for the manufacture, processing, packing, labeling and holding of drugs
and pertaining to the disposition of PPF Powder that is utilized in the
production of Kogenate at Bayer, as may be required by applicable FDA
regulations.


 


It is further agreed that each party will maintain a copy of this
Agreement until two (2) years after the final shipment or delivery of the PPF
powder hereunder from the Newco manufacturing facility in Clayton, North
Carolina, and shall make copies available for inspection at any reasonable hour
to any authorized representative of the Department of Health and Human
Services.


 


3.               SPECIFICATIONS


 


NewCo will manufacture and ship bulk quantities of PPF Powder, from the
process used in the manufacture of Plasma Protein Fraction (Human), to Bayer.
Said material will be furnished as powder in bulk containers and will be
labeled to indicate that Powder will be used in the manufacturing and/or
processing of Kongenate. PPF Powder will be fractionated by NewCo from U.S.
Collected Source Plasma obtained in accordance with the provisions of 21 CFR
§640, Subpart G, and other applicable FDA guidelines and regulations including
but not limited to 21 CFR §610.46 regarding lookback requirements. PPF Powder
shall meet the specifications attached hereto as Exhibit A (Powder
Specifications). Neither party shall make changes to the Powder Specifications
without the prior written approval of the other party, which approval will not
be unreasonably withheld.


 


Each unit of plasma used in the manufacture of this material will be
certified by NewCo to have been tested and found nonreactive for Hepatitis B
Surface Antigen (HBsAg),


 


	
  Confidential Evaluation Material Subject to Confidentiality Agreement

  	
   

  



 


 

















 


antibodies to Human Immunodeficiency Virus (HIV-1/HIV-2), antibody to
Hepatitis C virus (anti-HCV) and either HIV-1 p24 antigen or alternatively by a
FDA licensed assay for HIV-1 by NAT that is approved as an alternative to
licensed HIV-1 p24 antigen tests. Each unit of plasma used in the manufacture
of PPF Powder will also be certified by NewCo to have been NAT tested and found
non-reactive for HCV, HIV and HBV and will also meet any other applicable FDA
testing and screening requirements. In addition, all manufacturing plasma pools
will be certified to be NMT 10(5) IU Parvo B19 DNA/mL. The fractionation
procedure will be performed according to Current Good Manufacturing Practices and
in accordance with the NewCo Biologics License Application (formerly known as
the Establishment License and the Product License Application) for Plasma
Protein Fraction (Human). NewCo grants permission to Bayer to reference the
Biologics License for the description of the manufacturing facility and the
details for the Plasma Protein Fraction (Human) manufacturing process as it
relates to the manufacturing of PPF Powder.


 


The PPF Powder will be stored and shipped at -20oC or colder. Shipping
temperature will be verified for each shipment in accordance to the Powder
Specifications.


 


NewCo shall include a certificate of analyses with each shipment of PPF
Powder disclosing the results of its testing and showing conformance with the
Powder Specifications.


 


NewCo represents and warrants that the PPF Powder provided to Bayer
hereunder is not adulterated or misbranded within the meaning of the Federal
Food, Drug, and Cosmetic Act.


 


4.              TERM


 


This Agreement shall apply to all PPF Powder from the process used by
NewCo in the manufacture of Plasma Protein Fraction (Human) shipped in bulk
quantities to Bayer for use in the manufacture and/or processing of Kogenate.
This Agreement is effective from the Effective Date and will be renewed
annually.


 


5.              WARNING


 


PPF Powder shall be prepared from large pools of human plasma. Products
made from human plasma may contain infectious agents, such as viruses, that can
cause disease. NewCo represents and warrants that the plasma of each donor used
to manufacture PPF Powder has been screened and found negative for prior
exposure to certain viruses, and for the presence of certain current virus
infections. Despite these measures, such products can still potentially
transmit disease. There is also the possibility that unknown infectious agents
may be present in such products. Appropriate care should be used in handling
this material.


 


 

















 


Execution Copy


Page 3 of 3


Exhibit D


NewCo and Bayer Healthcare LLC, Berkeley


Manufacturing Agreement (PPF Powder)


 


IN WITNESS THEREOF, the parties thereto have caused this Agreement to
be executed by their duly authorized representatives.


 


	
  TALECRIS BIOTHERAPEUTICS, INC.

  	
   

  	
  BAYER HEALTHCARE LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Responsible Head/Agent

  	
   

  	
   

  	
  Responsible Head/Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BAYER HEALTHCARE LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Responsible Head/Agent

  
							



 


	
  Confidential Evaluation Material Subject to Confidentiality Agreement

  	
   

  



 


 

















 


Execution Copy


Exhibit E


 


	
  [LOGO]

  	
  Bayer Corporation

  
	
   

  	
  Pharmaceutical Division

  
	
   

  	
  Berkeley, CA 94710

  



 


	
  SPECIFICATION SHEET

  	
  Material No: 086333609 (Formerly 19-E613RP)

  
	
   

  	
   

  
	
  DISTRIBUTION

  	
  Title: PLASMA PROTEIN FRACTION POWDER

  
	
   

  	
   

  
	
  BERKELEY:

  	
  M. Britton, L. Cianella(3),K. Duckies,

  R. Furuzawa, R. Hein, L. Kelly,

  D. Miller, QA Compliance, QA Library

  	
  Rev. No.: 003

  
	
   

  	
   

  
	
  CLAYTON:

  	
  S. Hudson

  	
  Date:    NOV 26 2002

  



 


1.               PURPOSE


 


Plasma Protein Fraction (Human) Powder (PPF) is used for manufacturing
Human Plasma Protein Solution (HPPS), which in turn is used for producing cell
culture media, Berkeley QC will inspect and release the PPF powder as they do
other raw materials.


 


2.               DESCRIPTION


 


2.1 Description: Plasma Protein Fraction Powder


2.2 Manufacturer’s Name: Bayer Corp. (Clayton, North Carolina)


 


3.               [***]


 


[***]


[***]


[***]


[***]


[***]


 


	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  



 


[***]


 


[***]


 


	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  



 






***CONFIDENTIAL TREATMENT REQUESTED


 


1

















 


Execution Copy


Page 2 of 3


Exhibit E


 


	
  SPECIFICATION SHEET

  	
  Material No: 08633609 (Formerly 19-E613RP)

  
	
   

  	
   

  
	
   

  	
  Title: PLASMA PROTEIN FRACTION POWDER

  
	
   

  	
   

  
	
   

  	
  Rev. No. :003

  



 


[***]


 


	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  



 


	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  



 


	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  



 


[***]


                        [***]


                        [***]


                        [***]


 


4.               [***]


 


[***]


[***]


[***]


[***]


[***]


[***]


[***]


[***]


[***]


[***]


 


5.               LABELING AND PACKAGING


 


5.1                                 The powder shall be
double bagged using polyethylene bags. Each poly bag shall be securely closed
with a cable tie. The poly bags shall be overpacked in plastic totes whose lids
are secured with a cable tie or locking pin.


5.2                                 The poly bags and
totes shall be identified with the following information:


 


	
   

  	
  Plasma Protein Fraction (Human) Powder

  
	
   

  	
  Gross Weight

  
	
   

  	
  Net Weight

  
	
   

  	
  Tare Weight

  
	
   

  	
  Lot No.

  
	
   

  	
  Date Manufactured

  



 


6.               [***]


 


[***]


[***]


 






***CONFIDENTIAL TREATMENT REQUESTED


 


2

















 


Execution Copy


Page 3 of 3


Exhibit E


 


	
  SPECIFICATION SHEET

  	
  Material No: 08633609 (Formerly 19-E613RP)

  
	
   

  	
   

  
	
   

  	
  Title: PLASMA PROTEIN FRACTION POWDER

  
	
   

  	
   

  
	
   

  	
  Rev. No. :003

  



 


7.               [***]


 


[***]


[***]


[***]


[***]


[***]


[***]


[***]


 


	
   

  	
  APPROVED BY:

  	
  /s/ R. Hein 11/22/02

  	
   

  
	
   

  	
   

  
	
   

  	
  APPROVED BY:

  	
  /s/ D. Miller 11/05/02

  	
   

  
	
   

  	
   

  
	
   

  	
  APPROVED BY:

  	
  /s/ C. Maas 11/26/02

  	
   

  



 






***CONFIDENTIAL TREATMENT REQUESTED


 


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EXHIBIT F


 


Price


 


PPF supply price for calendar year 2004 shall be [***]


 






***CONFIDENTIAL TREATMENT REQUESTED


 


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