Exhibit 10.29


 


Agreement #1140-2007


 


	
   

  	
  CONTRACT FRACTIONATION SERVICES

  AND

  COMMERCIAL PRODUCTS

  AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BETWEEN AND AMONGST

  	
  ***TEXT OMITTED AND SUBMITTED SEPARATELY
  PURSUANT TO CONFIDENTIAL TREATMENT REQUEST UNDER 17 C.F.R. SECTIONS
  200.80(b)(4) AND 230.406

  
	
   

  	
   

  
	
   

  	
  CANADIAN BLOOD SERVICES

  
	
   

  	
   

  
	
   

  	
  AND

  
	
   

  	
   

  
	
   

  	
  TALECRIS BIOTHERAPEUTICS INC.

  
	
   

  	
   

  
	
   

  	
  AND

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TALECRIS BIOTHERAPEUTICS LTD.

  	
   

  



 


 

















 


TABLE OF CONTENTS


 


	
  1

  	
  DEFINED
  TERMS AND INTERPRETATION

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  DEFINITIONS

  	
  2

  
	
  1.2

  	
  SCHEDULES

  	
  5

  
	
  1.3

  	
  LEAD

  	
  5

  
	
   

  	
   

  	
   

  
	
  2

  	
  PURCHASE
  AND SALE OF GOODS/SERVICES

  	
  5

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  GOODS AND SERVICES

  	
  5

  
	
  2.2

  	
  DISTRIBUTION OF PRODUCTS IN CANADA

  	
  6

  
	
   

  	
   

  	
   

  
	
  3

  	
  DELIVERY
  OF COMMERCIAL PRODUCTS

  	
  6

  
	
   

  	
   

  	
   

  
	
  3.1

  	
  FORECASTING

  	
  6

  
	
  3.2

  	
  PRIOR FORECASTS TO BE HONOURED

  	
  6

  
	
  3.3

  	
  ORDER FOR COMMERCIAL PRODUCTS

  	
  6

  
	
  3.4

  	
  ANNUAL VOLUME

  	
  6

  
	
  3.5

  	
  DELIVERY OF COMMERCIAL, PRODUCT
  AND REPORT ON STATUS OF COMMERCIAL PRODUCT DELIVERY

  	
  8

  
	
  3.6

  	
  LATE DELIVERIES

  	
  8

  
	
  3.7

  	
  VIAL SIZE AND PRODUCT INVENTORY

  	
  9

  
	
  3.8

  	
  COMMERCIAL PRODUCT RECALLED, WITHDRAWN OR NOT VALIDLY
  DISTRIBUTED

  	
  9

  
	
  3.9

  	
  PROCEDURES
  AND REMEDIES IN THE
  EVENT
  OF ALTERNATE SOURCING

  	
  10

  
	
  3.10

  	
  MINIMUM SUPPLY GUARANTEE TO FURTHER PROTECT CANADIANS

  	
  11

  
	
   

  	
   

  	
   

  
	
  4

  	
  COMMERCIAL
  PRODUCT SPECIFICATIONS

  	
  11

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  COMMERCIAL PRODUCT SPECIFICATIONS

  	
  11

  
	
  4.2

  	
  SUPPLIER DETERMINES COMMERCIAL OR FRACTIONATION PRODUCTS
  ARE UNSUITABLE

  	
  11

  
	
  4.3

  	
  CBS DETERMINES COMMERCIAL OR
  FRACTIONATION PRODUCTS ARE UNSUITABLE

  	
  12

  
	
  4.4

  	
  SIGNIFICANT REDUCTION IN CONSUMER PREFERENCE

  	
  12

  
	
   

  	
   

  	
   

  
	
  5

  	
  FRACTIONATION
  SERVICES

  	
  13

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  FORECASTING

  	
  13

  
	
  5.2

  	
  ORDER FOR FRACTIONATION PRODUCTS

  	
  14

  
	
  5.3

  	
  FORECASTING CONTINUED TO TERMINATION DATE

  	
  14

  
	
  5.4

  	
  SURVIVAL OF ORDERS AFTER TERMINATION

  	
  14

  
	
   

  	
   

  	
   

  
	
  6

  	
  PLASMA
  COLLECTION AND PROCESSING

  	
  14

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  PLASMA COLLECTION

  	
  14

  
	
  6.2

  	
  RESPONSIBILITY FOR PLASMA IN CBS’ POSSESSION

  	
  14

  
	
  6.3

  	
  NOTICE OF PLASMA PICKUP BY SUPPLIER

  	
  15

  
	
  6.4

  	
  PICKUP, TRANSPORTATION AND STORAGE OF PLASMA BY SUPPLIER

  	
  15

  
	
  6.5

  	
  PLASMA SEGREGATION

  	
  15

  
	
  6.6

  	
  SUPPLIER RESPONSIBLE FOR EXPORTATION OF PLASMA

  	
  15

  
	
  6.7

  	
  SHIPPING
  DOCUMENTS
  AND EXPORTATION OF PLASMA

  	
  16

  
	
  6.8

  	
  RESPONSIBILITY FOR PLASMA IN SUPPLIER’S POSSESSION

  	
  16

  
	
  6.9

  	
  SUPPLIER TO INSPECT PLASMA

  	
  16

  
	
  6.10

  	
  CBS DETERMINES PLASMA
  DELIVERED TO SUPPLIER IS UNSUITABLE

  	
  16

  
	
  6.11

  	
  RIGHT
  OF
  SUPPLIER TO REJECT CBS
  PLASMA

  	
  17

  
	
  6.12

  	
  PLASMA
  RENDERED UNUSABLE BY SUPPLIER

  	
  17

  
	
  6.13

  	
  REGULAR
  MEETINGS

  	
  18

  
	
  6.14

  	
  CHANGE TO CBS STANDARD OPERATING PROCEDURES

  	
  18

  
				



 


i

















 


	
  7

  	
  DELIVERY
  OF FRACTIONATION PRODUCTS AND RECORDS

  	
  18

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  DELIVERY
  SCHEDULE AND REPORT ON STATUS OF FRACTIONATION PRODUCT DELIVERY

  	
  18

  
	
  7.2

  	
  WORK
  IN PROCESS

  	
  19

  
	
  7.3

  	
  NOTICE
  OF DELAY IN DELIVERY OF FRACTIONATION PRODUCTS

  	
  19

  
	
  7.4

  	
  DELAY
  IN DELIVERY OF FRACTIONATION PRODUCTS DUE TO CBS

  	
  20

  
	
  7.5

  	
  RECORDS

  	
  20

  
	
   

  	
   

  	
   

  
	
  8

  	
  DELIVERY
  OF PRODUCT

  	
  20

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  PRODUCT
  SHELF LIFE

  	
  20

  
	
  8.2

  	
  DELIVERY
  OF PRODUCTS

  	
  20

  
	
  8.3

  	
  RESPONSIBILITY
  FOR PRODUCTS

  	
  21

  
	
  8.4

  	
  DUTY
  OF INSPECTION

  	
  22

  
	
   

  	
   

  	
   

  
	
  9

  	
  PRICE,
  PAYMENT TERMS AND INVOICES

  	
  22

  
	
   

  	
   

  	
   

  
	
  9.1

  	
  PRICE

  	
  22

  
	
  9.2

  	
  PRICE
  ADJUSTMENTS

  	
  22

  
	
  9.3

  	
  PAYMENT
  TERMS

  	
  23

  
	
  9.4

  	
  INVOICES

  	
  24

  
	
  9.5

  	
  PRICING
  NOT AFFECTED BY REMEDIES

  	
  24

  
	
   

  	
   

  	
   

  
	
  10

  	
  REGULATORY
  AND QUALITY ASSURANCE MATTERS

  	
  24

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  REGULATORY
  CONDITION OF SUPPLY

  	
  24

  
	
  10.2

  	
  IMPROVEMENTS

  	
  24

  
	
  10.3

  	
  SPECIAL
  ACCESS PROGRAMME

  	
  25

  
	
  10.4

  	
  COMMUNICATIONS

  	
  25

  
	
  10.5

  	
  SUPPLIER
  INFORMATION

  	
  26

  
	
  10.6

  	
  COMPLIANCE
  AUDIT

  	
  26

  
	
   

  	
   

  	
   

  
	
  11

  	
  PRODUCT
  WITHDRAWALS/RECALLS

  	
  26

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  RECALL/WITHDRAWAL

  	
  26

  
	
  11.2

  	
  PATIENT
  NOTIFICATION SYSTEM

  	
  27

  
	
  11.3

  	
  ADVERSE
  EVENT REPORTING

  	
  27

  
	
  11.4

  	
  REPLACEMENT
  PRODUCTS AND REPLACEMENT FRACTIONATION PRODUCTS

  	
  27

  
	
   

  	
   

  	
   

  
	
  12

  	
  REPRESENTATIONS,
  WARRANTIES AND INSPECTION

  	
  28

  
	
   

  	
   

  	
   

  
	
  12.1

  	
  REPRESENTATIONS
  AND WARRANTIES OF THE PARTIES

  	
  28

  
	
  12.2

  	
  REPRESENTATIONS
  AND WARRANTIES ON THE PRODUCTS

  	
  29

  
	
  12.3

  	
  TITLE
  AND WARRANTY ON THE PRODUCTS

  	
  29

  
	
  12.4

  	
  GUARANTEED
  YIELD

  	
  29

  
	
  12.5

  	
  CURRENT
  INFORMATION

  	
  30

  
	
  12.6

  	
  NO
  WAIVER

  	
  30

  
	
  12.7

  	
  SURVIVAL
  OF REPRESENTATIONS AND WARRANTIES

  	
  30

  
	
   

  	
   

  	
   

  
	
  13

  	
  PATENT
  PROTECTION

  	
  30

  
	
   

  	
   

  	
   

  
	
  13.1

  	
  NO
  INFRINGEMENT

  	
  30

  
	
  13.2

  	
  INFRINGEMENT
  BY A PRODUCT OR PROCESS

  	
  30

  
	
   

  	
   

  	
   

  
	
  14

  	
  INSURANCE
  AND INDEMNIFICATION

  	
  31

  
	
   

  	
   

  	
   

  
	
  14.1

  	
  SUPPLIER’S
  INSURANCE

  	
  31

  
	
  14.2

  	
  CBS
  INSURANCE

  	
  32

  
	
  14.3

  	
  INDEMNITY

  	
  33

  
	
  14.4

  	
  APPROVAL
  OF COUNSEL

  	
  34

  
				



 


ii

















 


	
  15

  	
  CHANGE

  	
  34

  
	
   

  	
   

  	
   

  
	
  15.1

  	
  TECHNOLOGICAL
  CHANGE

  	
  34

  
	
  15.2

  	
  DISPUTE
  RESOLUTION

  	
  35

  
	
   

  	
   

  	
   

  
	
  16

  	
  TERMINATION

  	
  36

  
	
   

  	
   

  	
   

  
	
  16.1

  	
  TERMINATION
  OF AGREEMENT

  	
  36

  
	
  16.2

  	
  SUPPLIER
  EVENT OF DEFAULT

  	
  36

  
	
  16.3

  	
  CBS
  EVENT OF DEFAULT

  	
  37

  
	
   

  	
   

  	
   

  
	
  17

  	
  DISPUTE
  RESOLUTION

  	
  38

  
	
   

  	
   

  	
   

  
	
  17.1

  	
  ARBITRATION

  	
  38

  
	
   

  	
   

  	
   

  
	
  18

  	
  OPTION
  TO RENEW

  	
  39

  
	
   

  	
   

  	
   

  
	
  18.1

  	
  RENEWAL

  	
  39

  
	
   

  	
   

  	
   

  
	
  19

  	
  CUSTOMER
  SERVICE

  	
  39

  
	
   

  	
   

  	
   

  
	
  20

  	
  VALUE
  ADD

  	
  39

  
	
   

  	
   

  	
   

  
	
  21

  	
  GENERAL

  	
  39

  
	
   

  	
   

  	
   

  
	
  21.1

  	
  EXTENDED
  MEANINGS

  	
  39

  
	
  21.2

  	
  TIME

  	
  39

  
	
  21.3

  	
  ENTIRE
  AGREEMENT

  	
  39

  
	
  21.4

  	
  NOTICES

  	
  40

  
	
  21.5

  	
  ASSIGNMENT

  	
  42

  
	
  21.6

  	
  INDEPENDENT
  CONTRACTORS

  	
  42

  
	
  21.7

  	
  SEVERABILITY

  	
  42

  
	
  21.8

  	
  COMMUNICATION

  	
  42

  
	
  21.9

  	
  GOVERNING
  LAW

  	
  43

  
	
  21.10

  	
  CURRENCY

  	
  43

  
	
  21.11

  	
  SUCCESSORS
  AND ASSIGNS

  	
  43

  
	
  21.12

  	
  NO
  WAIVER

  	
  43

  
	
  21.13

  	
  JOINT
  AND SEVERAL LIABILITY

  	
  43

  
	
  21.14

  	
  REMEDIES
  CUMULATIVE

  	
  43

  
	
  21.15

  	
  COUNTERPARTS

  	
  43

  
	
  21.16

  	
  AMENDMENT

  	
  44

  
	
  21.17

  	
  CONFIDENTIAL
  INFORMATION

  	
  44

  
	
  21.18

  	
  PRICING
  INFORMATION TO CUSTOMERS

  	
  44

  
	
  21.19

  	
  PUBLIC
  ANNOUNCEMENTS

  	
  44

  
	
  21.20

  	
  FORCE
  MAJEURE

  	
  45

  
	
   

  	
   

  	
   

  
	
  SCHEDULE “A” - COMMERCIAL
  PRODUCTS ANNUAL PURCHASE VOLUMES AND PRICES

  	
  46

  
	
   

  	
   

  
	
  SCHEDULE “B” - CURRENT PLASMA
  PRODUCTION SITES AND PLASMA PICK-UP SCHEDULE

  	
  47

  
	
   

  	
   

  
	
  SCHEDULE “C” - COMMERCIAL
  PRODUCT SPECIFICATIONS

  	
  48

  
	
   

  	
   

  
	
  SCHEDULE “D” - FRACTIONATION
  PRODUCTS AND PRICES FOR FRACTIONATION PRODUCTS

  	
  49

  
	
   

  	
   

  
	
  SCHEDULE “E” - INVENTORY LEVELS

  	
  50

  
	
   

  	
   

  
	
  SCHEDULE “F” - VIAL SIZES
  SUBSTITUTION / WASTAGE

  	
  51

  
	
   

  	
   

  
	
  SCHEDULE “G” - CUSTOMER SERVICE

  	
  52

  
	
   

  	
   

  
	
  SCHEDULE “H” - VALUE ADD

  	
  53

  
	
   

  	
   

  
	
  SCHEDULE “I” - B-19 TESTING
  SERVICES

  	
  55

  
					



 


iii

















 


FRACTIONATION SERVICES AND COMMERCIAL
PRODUCTS AGREEMENT


 


THIS AGREEMENT effective as of and from April 1, 2008 (hereinafter
referred to as “Effective Date”) is made


 


BETWEEN AND AMONGST:


 


CANADIAN BLOOD SERVICES/ 


SOCIÉTÉ CANADIENNE DU SANG 


1800
Alta Vista Drive


Ottawa,
ON K1G 4J5


CANADA


(hereinafter
referred to as “CBS”)


 


AND:


 


TALECRIS BIOTHERAPEUTICS INC.


79
TW Alexander Drive 

Research Triangle Park 

North Carolina 27709 


USA


(hereinafter
referred to as “Talecris US”)


 


AND:


 


TALECRIS BIOTHERAPEUTICS LTD. 

5800 Explorer Drive, Suite #300


Mississauga,
ON L4W 5K9

CANADA

(hereinafter referred to as “Talecris Canada”)


 


(Talecris
US and Talecris Canada hereinafter collectively referred to as “Supplier”)


 


WHEREAS:


 


1)        CBS solicited proposals from various
interested parties to provide contract Fractionation Services and Commercial
Products as more particularly set out in a request for proposal entitled “Request
for Proposal #177-2006” issued January 12, 2007 (as hereinafter defined);


 


2)        Supplier submitted a proposal to CBS to
supply contract Fractionation Services and Commercial Products as more fully
set out in the proposal dated February 5, 2007 (the “Proposal”);


 


3)        Supplier wishes to sell to CBS and CBS wishes
to purchase from Supplier contract Fractionation Services and Commercial
Products.


 


1

















 


NOW
THEREFORE in consideration of the premises, covenants and agreements contained
herein and other valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:


 


1              DEFINED TERMS AND INTERPRETATION


 


1.1          Definitions


 


Where
used in this Agreement or any amendments or supplements to it, the following
terms shall have the following meanings respectively:


 


“Agreement”,
“this Agreement” and similar expressions refer to this Agreement including the Schedules
referred to in Section 1.2 and not to any particular Article, Section or
other portion of this Agreement and include every amendment or instrument
supplementary to or in implementation of this Agreement;


 


“Binding
Forecast” shall have the meaning given to it in Section 3.3;


 


“Business
Day” means any day other than a Saturday, Sunday or statutory holiday in the
Province of Ontario;


 


“Canadian
Food and Drugs Act” means the statute of Canada cited as R.S.C. 1985, c. F-27
and regulations thereto, as amended from time to time;


 


“CBS
Process” shall have the meaning given to it in Section 9.2(d)(i);


 


“Commercial
Products” means all products from Supplier listed in Schedule “A” and all
additions, substitutions and deletions to the Schedule from time to time
occurring during the Term of this Agreement and a Commercial Product means any
one of them;


 


“Consumers”
means individuals to be infused with Commercial Products or Fractionation
Products or the legal guardians/trustees of these individuals;


 


“CPI”
means the annual average index obtained by averaging the “All items” indices
for the twelve (12) months of the calendar year, as published by Statistics
Canada at the end of the previous calendar year;


 


“Effective
Date” means April 1, 2008;


 


“FDA”
means the Food and Drug Administration of the United States of America, or any
successor thereto;


 


“Forecast
Day” means the fifth (5th) business day of each month;


 


“Fractionation
Products” means the Plasma Intermediates and products resulting from the
process whereby Supplier fractionates Plasma;


 


2

















 


“Fractionation
Products Rolling Forecast” shall have the meaning given to it in Section 5.1;


 


“Fractionation
Services” means the fractionation of Plasma into Fractionation Products;


 


“Health
Canada” means Her Majesty the Queen in right of Canada as represented by the
federal Minister of Health and is the Regulator of Products in Canada;


 


“Héma-Québec”
and “HQ” means the blood management organization in the province of Quebec;


 


“Improvement”
means a change to any Product or Fractionation Service which enhances the
safety, efficacy, identity, potency or purity of the Product;


 


“Inventory
System” means the supply management system used by CBS for national inventory
management of plasma protein products;


 


“Licensed
Product” means a product licensed by Health Canada for sale or distribution in
Canada;


 


“Plasma”
means Recovered Plasma and Source Plasma collected in Canada;


 


“Plasma
Intermediates” means any by-products produced during the fractionation of the
Plasma by Supplier and returned to CBS as directed by CBS from time to time;


 


“Products”
means collectively Fractionation Products, Commercial Products, and Replacement
Fractionation Products;


 


“Product
Specifications” or “Specifications” includes the product monograph, all
labelling, package inserts and packaging for the Products as approved by Health
Canada and for Commercial Products as set out in Schedule “C” as amended from
time to time;


 


“Production
Sites” means those sites identified in Schedule “B”;


 


“Recall”
means any action ordered by Supplier to remove a Product from further
distribution or use, or correction, of a Product that violates legislation
administered by Health Canada, the FDA, or any other regulatory body with authority;


 


“Recovered
Plasma” means the liquid portion of whole human blood that remains after
separation of the cellular elements from whole blood;


 


“Replacement
Fractionation Products” means products required by CBS pursuant to Sections
6.12, 7.3, 7.4, 11.4, and Schedule “I” and a Replacement Fractionation Product
means any one of them;


 


3

















 


“Replacement
Product” means products required by CBS pursuant to any of Sections 3.6, 3.8,
3.9, 11.4, 15.1, and Schedule “I”;


 


“Rolling
Forecast” means a twenty-four (24) month rolling forecast of CBS’ total monthly
volume requirement for Commercial Products;


 


“Services”
means all of the services expressly set out herein to be provided by Supplier,
including the fractionation of Plasma into Fractionation Products;


 


“Shortage”
means that the total inventory of any Product, issuable and riot subject to a
quarantine, Recall or Withdrawal, of Fractionation Products and/or Commercial
Products in the Inventory System has fallen below five (5) weeks supply
for that Product;


 


“Source
Plasma” means Plasma collected by apheresis;


 


“Special
Access Programme” and “SAP” means Health Canada’s program to authorize
distribution of unlicensed product in Canada;


 


“Target
Levels” means the target inventory for Fractionation Products and Commercial
Products (in weeks) as set out in Schedule “E” or as agreed in writing by the
parties;


 


“Term”
means that period of time commencing on the Effective Date and ending at the
earlier of:


 


(i)    March 31,
2013 or


(ii)   termination
of this Agreement as provided for herein.


 


Term
also includes any extension or renewal of this Agreement as evidenced in
writing;


 


“US”,
“USA” and “United States” refers to the United States of America;


 


“Warehouse”
means CBS’ primary warehouse at 1800 Alta Vista Drive, Ottawa, Ontario, Canada,
or such other warehouse as may be designated in writing by CBS to Supplier and
consented to by Supplier, which consent will not unreasonably be withheld; and


 


“Withdrawal”
means any action ordered by Supplier or by CBS, in accordance with the terms of
this Agreement, to remove a Product from further distribution or use, or
correction, of a marketed product that does not violate legislation
administered by Health Canada.


 


4

















 


1.2          Schedules


 


The following are the schedules which are referred
to in this Agreement and which form part of this Agreement:


 


	
  Schedule “A”

  	
  –

  	
  Commercial
  Products Annual Purchase Volumes and Prices First Year Purchase Volumes

  
	
  Schedule “B”

  	
  –

  	
  Current
  Plasma Production Sites and Plasma Pick-up Schedule

  
	
  Schedule “C”

  	
  –

  	
  Commercial
  Product Specifications

  
	
  Schedule “D”

  	
  –

  	
  Fractionation
  Products and Prices for Fractionation Products (Plasma volumes and prices)

  
	
  Schedule “E.”

  	
  –

  	
  Inventory
  Levels

  
	
  Schedule “F.”

  	
  –

  	
  Vial
  Size Substitution / Wastage

  
	
  Schedule “G”

  	
  –

  	
  Customer
  Service

  
	
  Schedule “H”
  

  	
  –

  	
  Value
  Add

  
	
  Schedule “I”

  	
  –

  	
  B-19
  Testing Services

  



 


1.3          Lead


 


The
parties acknowledge that Supplier has entered into an agreement similar in form
and substance with HQ, for the supply and distribution of Products. Supplier
acknowledges that CBS and HQ pool Plasma for fractionation and are together
responsible for the supply of Fractionation Products to Canadians. Supplier
shall take directions only from CBS with respect to the following:


 


	
  (i)

  	
  decisions
  relating to the acceptability of Plasma for pooling as between CBS and HQ;

  
	
  (ii)

  	
  decisions
  relating to changes in pooling, including but not limited to, the method of
  pooling, testing of the pools, and tracking of the pools;

  
	
  (iii)

  	
  decisions
  as to Fractionation Products to be produced from the pool, including but not
  limited to, vial size, and labelling;

  
	
  (iv)

  	
  disposition
  of Plasma Intermediates; and

  
	
  (v)

  	
  the
  provision to Supplier of the Plasma Volume Forecasts of CBS and HQ.

  



 


Supplier
shall not take directions from HQ with respect to the Plasma, or the pooling of
the Plasma concerning the matters above without the express written consent of
CBS.


 


2              PURCHASE AND SALE OF
GOODS/SERVICES


 


2.1          Goods and Services


 


CBS
shall purchase or obtain from Supplier on a non-exclusive basis and Supplier
shall sell or provide to CBS, on the terms and conditions in this Agreement,
the Products and Services, in the quantities and for the prices set forth in
Schedule “A” and Schedule “D”. In connection with the Fractionation Services,
Supplier will, unless otherwise permitted by the provisions of this Agreement,
use Plasma provided to it by CBS.


 


5

















 


2.2          Distribution of Products in Canada


 


(a)           CBS
hereby acknowledges and covenants that the Products are and shall be for
distribution by CBS in Canada except that nothing herein shall prevent CBS from
donating such Products to organizations outside Canada for charitable purposes,
with the written permission of Supplier which permission will not unreasonably
be withheld.


 


(b)           CBS
further agrees to notify Supplier in writing as soon as reasonably possible if
it suspects that any of the Products are being obtained from CBS for use,
distribution or sale outside Canada, other than as set forth in Subsection 2.2(a) above,


 


3              DELIVERY OF COMMERCIAL
PRODUCTS


 


3.1          Forecasting


 


CBS shall provide Supplier with the Rolling Forecast
by the Forecast Day each month.


 


3.2          Prior Forecasts to be Honoured


 


The
parties acknowledge that forecasts and commitments have been made prior to the
Effective Date which are applicable for the first six (6) months of this
Agreement.


 


3.3          Order for Commercial
Products


 


By
August 1st of the preceding year, CBS shall provide to
Supplier, in each contract year, the annual amount of Commercial Products that
CBS will purchase in that contract year. For each Rolling Forecast provided by
CBS, the Product volumes identified in the first [***] months will be
considered a binding obligation of CBS
to purchase and the Supplier to deliver the Products identified within such
month. The volume by vial size of such Product is then fixed for the first [***] months
of each such forecast (the “Binding Forecast”). Should CBS fail to provide a Rolling
Forecast in any month, the last
Rolling Forecast provided will stand with the [***] month window for
product volume and with the [***] month window for vial size configuration
continuing for one additional month. In each Binding Forecast, CBS shall indicate
the amounts to be delivered to CBS by Supplier in each weekly delivery.


 


3.4          Annual Volume


 


(a)           The
volume of Commercial Products projected to be purchased by CBS and HQ and
delivered by Supplier during the first year of the Agreement is set out in
Schedule “A”. For each Commercial Products the unit price invoiced to CBS by
the Supplier during the year will be determined by the projected first year
volume identified in Schedule “A”. In the event that actual CBS and HQ combined
purchases in the first year move the unit price into a different price tier as
identified in Schedule “A”, the unit price applicable to the actual volume
purchased by CBS and HQ shall be adjusted in accordance with the


 






***CONFIDENTIAL TREATMENT REQUESTED


 


6

















 


unit
price tier applicable to the actual volume purchased by CBS as shown in
Schedule “A”. Any such adjustments, if applicable, shall be invoiced or
credited by the Supplier within thirty (30) days after the anniversary date of
the Agreement.


 


(b)           For
the second year of the Agreement CBS agrees to purchase, and Supplier agrees to
deliver, a volume for Commercial Product that is:


 


·       For Gamunex:
between [***] and [***] of the previous year’s purchase volume, unless
otherwise agreed to in writing by both parties.


·       For
Plasbumin: between [***] and [***] of the previous year’s purchase volume,
unless otherwise agreed to in writing by both parties.


·       For
HyperHep B and GamaSTAN: volumes communicated by [***]. Subject to Supplier’s
agreement, provided that such agreement shall not be withheld for any amount up
to the amount purchased by CBS in the prior year.


 


(c)           For
the third, fourth and fifth years of the Agreement, CBS agrees to purchase, and
Supplier agrees to deliver, a volume for Commercial Product that is:


 


·       For
Gamunex: between [***] and [***] of the purchase volume of years two, three and
four respectively.


·       For
Plasbumin: between [***] and [***] of the purchase volume of years two, three
and four respectively.


·       For
HyperHep B and GamaSTAN: volumes communicated by [***] of the second, third and
fourth years of the agreement. Subject to Supplier’s agreement, provided that
such agreement shall not be withheld for any amount up to the amount purchased
by CBS in the prior year.


 


(d)           For
each Commercial Product, the unit price invoiced to CBS by the Supplier during
the year will be determined by the projected combined CBS and HQ purchase
volume for the year communicated to the Supplier by [***] of the preceding
year. In the event that actual combined CBS and HQ purchases in any year move
the unit price into a different price tier as identified in Schedule “A”, the
unit price applicable to the actual volume purchased by CBS shall be adjusted
in accordance with the unit price tier applicable to the actual volume
purchased by CBS and HQ as shown in Schedule “A”. Any such adjustments, if
applicable, shall be invoiced or credited by the Supplier within thirty (30)
days after the anniversary date of the Agreement.


 


(e)           Adjustments
to annual purchase volumes may also result from CBS invoking its rights under Section 4.4
(Significant Reduction in Consumer Preference).


 






***CONFIDENTIAL TREATMENT REQUESTED


 


 


7

















 


3.5          Delivery of Commercial Product and Report on Status of Commercial
Product Delivery


 


(a)           Supplier shall deliver on a frequency of [***] deliveries per month or
such other frequency as may be agreed upon from time to time the Commercial
Products to CBS as set out in this Agreement and at the times and in the
quantities set out in the Binding Forecast. In the event that CBS’ delivery
requirements change during the Term other than as required by the Binding
Forecast, CBS shall notify Supplier in writing of the revised requirements.
Supplier shall use its reasonable best efforts to satisfy the revised
requirements of CBS. CBS and Supplier shall agree in writing to the amended
delivery schedule.


 


3.6          Late Deliveries


 


(a)           In the event that the Supplier becomes aware that it does not expect to
meet the delivery schedule in the Binding Forecast, the Supplier shall promptly
(but not later than [***] after Supplier becomes aware of the delay) advise CBS
of the reasons therefore, and of the date by which the Supplier will be able to
confirm whether it will be able to meet the delivery schedule. As soon as the
Supplier is able to advise whether it can meet the delivery schedule, the
Supplier shall notify CBS in writing, which notice shall indicate the Supplier’s
next anticipated delivery date and delivery quantity. In the event that the
Supplier’s inability to meet one or more deliveries results in CBS having an
inventory Shortage or CBS is expected to have such result prior to the Supplier’s
next anticipated shipment date, CBS shall notify the Supplier in writing and
the Supplier shall have five (5) Business Days from receipt of such notice
to make arrangements reasonably satisfactory to CBS to ensure delivery of
sufficient quantities of such Product, or of a substitute therapeutic for such
Product acceptable to CBS (“Replacement Product”), are delivered to CBS to
increase its inventory of such Product or of a substitute therapeutic to the
Target Level. If Supplier has not made such satisfactory arrangements within
the five (5) Business Days, CBS may purchase the above mentioned
Replacement Product from an alternate source(s) to replace that Product
which the Supplier has indicated that it is unable to supply and the remedies
in Section 3.9 shall apply. The Supplier will make all reasonable efforts
to assist CBS in identifying an alternate source from which CBS can obtain
Replacement Products.


 


(b)           Supplier shall use its reasonable best efforts to locate Commercial
Product to minimize any delay and to ensure that such Commercial Product is
delivered to CBS at no additional cost to CBS. If the delay in delivery will
result in, or is likely to result in, a Shortage of any Commercial Product, the
procedure set out in Section 3.9 will apply.


 


(c)           In the event a delivery is [***] late (excluding delays caused by
severe weather or acts of God), Supplier shall pay to CBS a late delivery fee
of [***] of the price of the quantity of Commercial Product that is late.


 






***CONFIDENTIAL TREATMENT REQUESTED


 


 


8

















 


(d)           The late delivery fee is payable only when there is no cost
differential for Replacement Product being paid on the late delivery. In the
event that a late delivery fee is paid by Supplier, and the late delivery
subsequently becomes the subject of a cost differential payment as described in
Subsection 3.9(c), the amount of the cost differential payment will be reduced
by the amount of any late delivery fee paid. This amount shall be credited
against invoices or paid to CBS in cash, if there is insufficient Product
remaining to be delivered to CBS pursuant to this Agreement.


 


3.7          Vial Size and Product Inventory


 


When
a specific vial size of a Commercial Product is not delivered as set out in the
applicable Binding Forecast then the terms of Schedule “F” shall govern.


 


In
addition to the quantities received by CBS and held in its own inventory,
Supplier shall keep in inventory in Canada for the exclusive use of CBS the equivalent
of [***] weeks supply of IVIG available for immediate distribution to CBS. For
GamaSTAN and HyperHep, Supplier shall keep in inventory in Canada [***] weeks
of unreleased supply and [***] weeks of released supply available for
immediate distribution to CBS. For Albumin, Supplier shall keep [***] weeks
supply for year 1 of the Agreement and [***] weeks for years 2 to 5.
Supplier shall provide CBS on a weekly basis, a report reflecting such
inventory level. The Supplier shall plan production so as to ensure continuous
supply of the Product and comply with the minimum inventory requirement
identified above.


 


For
the purposes of Subsection 3.6(a) and this Section 3.7, a week shall
be 1/52nd of the amount set out in the annual volumes as described
in Sections 3.3 and 3.4 hereof.


 


3.8          Commercial Product Recalled, Withdrawn or Not Validly Distributed


 


In
the event of a:


 


(i)         Recall
or Withdrawal of any Commercial Product that results in a Shortage, provided
that the cause of such Shortage is not attributable to CBS; or


 


(ii)        Determination
by Health Canada or any other governmental authority that the Commercial
Product may not be validly distributed or used in Canada and such determination
results in a Shortage, provided that the cause of such Shortage is not
attributable to CBS;


 


and
CBS acquires Replacement Product specifically to replace inventory levels such
acquisition shall be governed by Section 3.9.


 






***CONFIDENTIAL TREATMENT REQUESTED


 


 


9

















 


3.9          Procedures and Remedies in the
Event of Alternate Sourcing


 


(a)           In the event of the occurrence of an event as described in Sections
3.6, 3.8 and 3.10, Supplier shall respond in writing to CBS within two (2) Business
Days, or such longer time period if agreed to by CBS and Supplier, confirming
whether it can provide Replacement Products and, if so, shall provide
comprehensive specifications and proposed delivery schedule for such
Replacement Products (the “Proposal”). If the Proposal is acceptable to CBS,
CBS will so advise Supplier and the supply of the Replacement Product shall be
governed by the terms of this Agreement.


 


(b)           If CBS, acting reasonably, rejects the Proposal or if no Proposal is
offered within the stipulated or agreed time frame, CBS may proceed to locate
Replacement Products from a third party selected by CBS. The quantity of
Replacement Product purchased by CBS pursuant to this paragraph shall be
obtained solely for the purpose of averting any Shortage. Supplier acknowledges
that CBS has the right to purchase sufficient Replacement Product to
re-establish its Target Level inventory. Supplier shall have the right to
review the proposed purchase of Replacement Product by CBS and consent of
Supplier to the purchase is required if reimbursement is to be sought by CBS.
Supplier shall respond to CBS within one (1) Business Day of receipt of
the notice of the proposed purchase of Replacement Product. If Supplier fails
to respond in one (1) Business Day, then it shall he deemed to have
consented. Consent of Supplier will not be unreasonably withheld.


 


(c)           If Replacement Product is purchased by CBS from a third party with the
consent of Supplier, or if it is subsequently determined that Supplier’s
refusal to consent to the purchase was unreasonable, Supplier shall compensate
CBS for the amount, if any, that the price CBS would have had to pay to
Supplier for the Commercial Product had it been delivered pursuant to this
Agreement is less than the price paid to purchase the Replacement Product.
Supplier’s obligations for such compensation for HyperHep shall be limited to [***]
of the dollar value of purchases for HyperHep in the preceding year per
occurrence. Such amounts shall be due and payable, in cash or in credit at the
option of Supplier within fifteen (15) days of delivery by CBS of an invoice
for such amounts. Compensation by Supplier of CBS pursuant to this paragraph
shall be the limit of Supplier’s liability hereunder.


 


(d)           Nothing in this Section 3.9 shall limit the right of CBS to
terminate this Agreement pursuant to Section 16 should the occurrence of
an event as described in Section 3.8 constitute a material breach of this
Agreement.


 


(e)           All communications relating to claim for Replacement Product under this
Section 3.9 shall be delivered in accordance with the notice provision in Section 21.4
hereof.


 






***CONFIDENTIAL TREATMENT REQUESTED


 


 


10

















 


3.10        Minimum Supply Guarantee to Further Protect Canadians


 


Supplier will supply to CBS and HQ as follows:


 


(i)         In the
event that Supplier is able to produce [***] or more of Supplier’s planned
global output, CBS and HQ will receive its full Commercial Product delivery; or


 


(ii)        In the
event that Supplier produces less than [***] of Supplier’s planned global output,
CBS and HQ will be protected from the full impact of a Shortage by receiving [***]
more of Supplier’s Commercial Product allocation from Supplier than CBS and HQ
would be proportionally entitled.


 


This
is in addition to all other rights pursuant to this Agreement when Supplier is
unable to supply Commercial Product.


 


4              COMMERCIAL PRODUCT
SPECIFICATIONS


 


4.1          Commercial Product Specifications


 


Supplier
shall provide to CBS Commercial
Products in accordance with the Specifications.


 


4.2          Supplier Determines Commercial or Fractionation Products are
Unsuitable


 


If,
after any Commercial Products or Fractionation Products have been delivered to
CBS, Supplier determines in its reasonable discretion that any Commercial
Products or Fractionation Products are unsuitable or defective in any manner,
and that such unsuitability or defect creates a reasonable likelihood of
adverse risk to the safety or quality of any Commercial Products or
Fractionation Products, Supplier shall give immediate notice by telephone and
facsimile transmission to CBS of any such deficiency. In the event that
Supplier, acting reasonably, notifies CBS that Supplier is Recalling or
Withdrawing any Commercial Products or Fractionation Products, or is taking any
other action to remedy any deficiencies in the Commercial Products or
Fractionation Products, and requests that CBS co-operate in any such Recall or
Withdrawal, or take action to remedy any deficiency in the Commercial Products
or Fractionation Products (which request shall not be made unreasonably), CBS
shall reasonably co-operate in any such Recall or Withdrawal, or shall take
such action as is reasonably required by Supplier to remedy any deficiency in
the Commercial Products or Fractionation Products. The costs of such Withdrawal, Recall or other
action, including the cost of repairing or replacing any Commercial Products or
Fractionation Products, shall be paid by Supplier.


 






***CONFIDENTIAL TREATMENT REQUESTED


 


 


11














 


4.3          CBS
Determines Commercial or Fractionation Products are Unsuitable


 


(a)           If CBS determines, in its reasonable discretion, that
any Commercial Products or Fractionation Products are unsuitable or defective
in any manner and that such unsuitability or defect creates a reasonable
likelihood of adverse risk to the safety or quality of the Commercial Products
or Fractionation Products, CBS shall immediately notify Supplier, by telephone
and facsimile transmission, of such deficiency. In the event that CBS, acting
reasonably, notifies Supplier, that it is proceeding with the Withdrawal or
quarantine of any Commercial Products or Fractionation Products, or is taking
any other action to remedy any deficiencies in the Commercial Products or
Fractionation Products, Supplier shall reasonably co-operate in any such action
as is required by CBS to remedy any deficiency. The costs of such action,
including the cost of repairing or replacing any Commercial Products or
Fractionation Products, shall be paid by CBS if it is the party to whom
causation is attributable or by Supplier if it is the party to whom causation
is attributable. For greater certainty, CBS is not required to notify Supplier
of any defect or possible defect caused by CBS while the Commercial Products or
Fractionation Products are in CBS’ care and control and where there is no
impact on Supplier under this Agreement, unless otherwise required by any
regulatory authority.


 


(b)           In the event that CBS has caused the Withdrawal or
quarantine of a Commercial Product or Fractionation Product pursuant to
Subsection 4.3(a), and it is subsequently determined that the Commercial
Product or Fractionation Product did or does not create a reasonable likelihood
of adverse risk to the safety or quality of the Commercial Product or
Fractionation Product, as determined by Health Canada, CBS will be required to:


 


(i)        return the Commercial Product or Fractionation Product
to the market or remove the quarantine as applicable; and


(ii)       compensate Supplier for the direct costs to Supplier
of such Withdrawal or quarantine.


 


4.4          Significant Reduction in Consumer
Preference


 


(a)           A significant reduction in Consumer
preference for a Commercial Product occurs when issues by CBS to its customers
for a Commercial Product drop for two (2) consecutive months with a
fifteen percent (15%) monthly decline below the previous six (6) month
rolling average, together with evidence that the total market for the type of
product in question has not decreased. CBS shall be required to notify Supplier
as soon as possible in writing in the event that CBS intends to implement this
Consumer preference clause. Such notification shall contain evidence of two (2) consecutive
months with a fifteen percent (15%) monthly decline in Commercial Product
orders and evidence that the total market for that type of product has not
declined in a similar manner. CBS will informally communicate to Supplier as
soon as it suspects that this Consumer preference clause may need to be invoked
to allow Supplier to implement a plan to restore Consumer preference as soon as
possible. For greater certainty, if the decline in demand is due to a shift by


 


12

















 


Consumers to
another manufacturer’s product that is functionally equivalent to, but
significantly technologically and/or scientifically superior to the Commercial
Product, then CBS shall exercise the recourse set out in Section 15.1.


 


(b)           Following written notice that CBS intends
to invoke Subsection 4.4(a), Supplier will be granted:


 


(i)        two (2) months to restore at least twenty-five
percent (25%) of the total drop in orders;


(ii)       if at the end of this two (2) month period,
Supplier has restored twenty-five percent (25%) of the orders, Supplier shall
be granted a further two (2) months to restore orders to the level that
existed prior to the two (2) consecutive months with the fifteen percent
(15%) monthly decline.


 


(c)           In the event that Supplier fails
to-restore orders as set out in Paragraphs (i) and (ii) above, then
the annual volume of the specific Commercial Product forecast by CBS shall be
adjusted to reflect the loss of demand for the specific Commercial Product and
the pricing shall be adjusted according to Schedule “A”.


 


(d)           In the event that Supplier does restore
orders for the Commercial Product as provided for in this Section, the amount
by which the volume declined during the initial two (2) months decline and
the time set out in Subsections 4.4(b)(i) and 4.4(b)(ii), if applicable,
will be deducted from the annual volume of Commercial Products forecast by CBS
without any increase in price.


 


5              FRACTIONATION SERVICES


 


5.1          Forecasting


 


By August 1 of each
contract year, CBS shall provide Supplier with a twenty-four (24) month rolling
forecast of the projected monthly supply of Plasma available to the Supplier
for fractionation from CBS and HQ. The Plasma Volume Forecast shall be updated
by CBS and provided to Supplier on a quarterly basis. In the event the Plasma
Volume Forecast is not updated and provided to Supplier for any quarter, the
preceding Plasma Volume Forecast shall stand. Notwithstanding the foregoing,
CBS and HQ shall collectively deliver to Supplier not less than [***] litres of
Plasma per year for fractionation.


 


Each month, by the
Forecast Day, CBS shall provide Supplier with a twenty-four (24) month rolling
forecast of CBS’ monthly delivery requirements for Fractionation Products (“Fractionation
Products Rolling Forecast”) for Fractionation Products. HQ will independently
provide Supplier with a Fractionation Products Rolling Forecast.


 






***CONFIDENTIAL
TREATMENT REQUESTED


 


 


13

















 


5.2         Order for Fractionation Products


 


The forecast for each [***] month
period immediately following each Forecast Day in the Plasma and Fractionation
Products Rolling Forecast shall be deemed to be a commitment by CBS to purchase
from Supplier and for Supplier to deliver, the Fractionation Products shown in
the [***] month forecast and may not be amended except by the mutual
written agreement of CBS and Supplier. The [***] month portion of the
Fractionation Products Rolling Forecast shall include specific ordering
instructions for vial sizes as well as quantities of Fractionation Products.


 


5.3         Forecasting Continued to Termination
Date


 


The parties hereto agree
that CBS will continue to submit a Fractionation Products Rolling Forecast to
Supplier on a monthly basis until this Agreement is terminated unless Supplier
and CBS agree in writing to phase out or amend the requirement for a monthly Fractionation
Products Rolling Forecast as this Agreement approaches the end of the Term.


 


5.4         Survival of Orders after Termination


 


Any Plasma picked up by
Supplier from CBS for fractionation by Supplier into Fractionation Products
prior to the termination or expiration of this Agreement shall be fractionated
by Supplier into Fractionated Products and for resale to CBS pursuant to this
Agreement, and the rights and obligations of the parties hereto shall survive
termination of the Agreement.


 


6            PLASMA COLLECTION AND PROCESSING


 


6.1         Plasma Collection


 


CBS agrees that all
Plasma it collects in Canada for pickup by Supplier for fractionation by
Supplier shall be collected,
stored and transported in accordance with the Canadian
Food and Drugs Act and the Drugs Directorate Guidelines on Blood
Collection and Blood Component Manufacturing, 1992, established plasma
specifications, and any amendments thereto, and in accordance with current
import/export regulations.


 


6.1.1      Supplier will perform the B-19 Testing Services
described in Schedule “I” at its Facility located in Raleigh, North Carolina (“Supplier
Facility”), but may perform such Services at another location upon written
notice to CBS.


 


6.2         Responsibility for Plasma in CBS’
Possession


 


CBS shall be responsible
for and shall bear all risk of loss or damage to the Plasma collected while it is in its care, custody and
control until picked up by Supplier or its agents, including but not limited to
any loss or damage resulting from the improper storage, handling, packing,
crating, and/or blocking of the Plasma at the Production Sites, except as
otherwise provided in this Agreement.


 






***CONFIDENTIAL
TREATMENT REQUESTED


 


 


14

















 


6.3          Notice of Plasma Pickup by Supplier


 


As of the Effective Date,
Supplier shall follow the schedule of collection of Plasma set out in Schedule “B”,
Notwithstanding the foregoing, Supplier shall provide CBS with reasonable
advance notice of:


 


(i)    the
time of pick up of any Plasma from the Production Sites (during normal business
hours), such advance notice being not less than forty-eight (48) hours; and


 


(ii)   an
annual schedule for each calendar year for the pick-up of Plasma from the
Production Sites for transport to Supplier’s fractionation facility will be
agreed upon by Supplier and CBS, taking into account the quantity of Plasma to
be collected, storage capabilities and procurement plans. Such schedule is to
serve as a guideline and may be amended upon reasonable notice to Supplier.


 


6.4          Pickup, Transportation and Storage of Plasma by Supplier


 


Supplier agrees to
provide CBS with appropriate shipping containers, at no cost to CBS, to be utilized for the storage and
transportation of the frozen Plasma. Supplier shall be required at its own
expense to pick up the Plasma from the Production Sites and arrange for storage
if required. Supplier reserves the right to select, in reasonable consultation
with CBS, an alternate carrier or storage facility at any time.


 


6.5          Plasma Segregation


 


CBS further acknowledges
and agrees that should any Plasma be held by CBS for transport to a
fractionator other than Supplier, CBS must ensure:


 


	
  (i)

  	
  that the Plasma
  destined for a third party never be handled by Supplier;

  
	
   

  	
   

  
	
  (ii)

  	
  that boxes, bags or
  other containers of Supplier are never used to store or transport Plasma
  destined for a third party fractionator; and

  
	
   

  	
   

  
	
  (iii)

  	
  that any Plasma to be
  sent to a third party fractionator be stored separately from Plasma to be
  picked up by Supplier and be clearly marked as destined for such third party
  fractionator.

  



 


6.6          Supplier Responsible for  Exportation of
Plasma


 


Supplier is responsible
for all costs incurred for the exportation of Plasma outside of Canada and
re-importation of Products to Canada including transportation, duty, excise,
brokerage fees and customs in addition to ensuring documentation is prepared
and available as required for exportation.


 


15

















 


6.7          Shipping Documents and Exportation of
Plasma


 


Prior to each Plasma
shipment to the Supplier, Supplier will receive from CBS:


 


(i)    consolidated Plasma shipment summary document;


(ii)   statement of value for customs purposes; and


(iii)  copies of Production Sites Plasma shipment summaries.


 


Donation detail lists
(Plasma unit sheets listing testing and acceptance) shall be shipped directly
to the fractionation facility concurrent with the consolidated Plasma shipment.


 


6.8          Responsibility for Plasma in  Supplier’s
Possession


 


Supplier shall be
responsible for and shall bear all risk of loss or damage to the  Plasma
while it is in the care, custody and control of Supplier or that of its shipper
or its agents. This responsibility includes, but is not limited to, any loss or
damage resulting from the improper storage, handling, loading, blocking and/or
transportation of the Plasma, except as otherwise provided for herein, together
with responsibility for the manufacture of all Plasma Intermediates and
Fractionation Products required hereunder. Supplier shall take all reasonable
steps within their respective responsibilities to ensure that Plasma and
Fractionation Products arc appropriately segregated and not intermingled with
other raw materials or Fractionation Products when in  its care and
control.


 


6.9          Supplier to Inspect Plasma


 


Immediately prior to the
pooling of Plasma at Supplier’s fractionation facility, Supplier shall inspect
the Plasma or otherwise ascertain that it conforms to the requirements of the
appropriate regulatory authorities.


 


6.10        CBS Determines Plasma Delivered to Supplier is
Unsuitable


 


If, after any Plasma has
been picked up by Supplier, CBS determines, acting reasonably, that any of the
Plasma is unsuitable or poses a reasonable likelihood of adverse risk to the
safety or quality of any of the Fractionation Products, CBS shall immediately
notify Supplier by telephone and facsimile transmission and shall provide
instructions for the disposition of the Plasma. All rejected Plasma or Plasma
Intermediates shall be held at the expense and risk of CBS until CBS directs
Supplier on their disposition. However, if such circumstance is due to the
negligence or wilful misconduct of Supplier, such costs shall be borne by
Supplier.


 


16

















 


6.11        Right of Supplier to Reject CBS Plasma


 


(a)           Supplier shall have the right, at any time while the
Plasma is in its possession, as applicable, including after the Plasma has been
pooled and during the fractionation process, to reject any Plasma or Plasma
Intermediates which:


 


(i)    are
determined to be deficient by CBS, with notice of any such deficiency to be
provided to Supplier pursuant to Section 6.10, or


 


(ii)   do not
meet the standards set out in Section 6.1, or


 


(iii)  are
otherwise damaged, possibly contaminated, improperly packaged, labelled,
stored, or improperly documented, or


 


(iv)  are, in
the reasonable discretion of Supplier, unsuitable or pose a reasonable
likelihood of adverse risk to the safety, quality, purity, potency or efficacy
of any of the Fractionation Products.


 


(b)           Supplier shall immediately notify CBS by telephone and
facsimile transmission of any such rejection by Supplier. CBS shall co-operate.
with Supplier in any efforts to correct any deficiency attributable to any
Plasma. Any retesting, reprocessing or additional processing and testing of
Plasma, Plasma Intermediates or Fractionation Products shall be done by
Supplier at the sole cost and expense of CBS with CBS’ consent, except in the
case of rejected Plasma or Plasma Intermediates which are the responsibility of
Supplier as provided for in Section 6.12. All rejected Plasma or Plasma
Intermediates shall be held at the expense and risk of CBS until CBS directs
Supplier on their disposition. However, if such circumstance is due to the
negligence or wilful misconduct of Supplier, all such costs shall be paid by
Supplier.


 


6.12        Plasma Rendered Unusable by Supplier


 


(a)           If
any Plasma is rendered unusable while it is in the care, custody and control of
Supplier, it shall replace Fractionation Products that were to result from the
fractionation of such Plasma with equivalent products manufactured by Supplier
(“Replacement Fractionation Products”). These Replacement Fractionation
Products are to be supplied to CBS at the same cost as CBS would have been
required to pay for Fractionation Products had Supplier not rendered the Plasma
unusable. The availability of Replacement Fractionation Products from Supplier
for the purpose of this Section shall be determined at the sole discretion
of Supplier acting reasonably. Supplier shall supply and deliver Replacement
Fractionation Products on the date scheduled for the delivery of the
Fractionation Products.


 


(b)           In
the event that Supplier is unable to supply Replacement Fractionation Products
as set out above CBS may begin the procedures set out in Subsections 3.9(b) and
(c).


 


17

















 


6.13        Regular Meetings


 


The parties will, with
HQ, which organization also has an agreement with Supplier, meet at least every
six (6) months during the Term, beginning in the first quarter after the
Effective Date. The purpose of these meetings is to discuss matters - related
to this Agreement including, but not limited to, reconciliation of Plasma and
Products, operational issues, new processes, procedures and products, inventory
levels and regulatory issues. Supplier shall provide Canadian and global
adverse drug reaction data for the Products at least every six (6) months
at these meetings. Meetings may  be cancelled if CBS, HQ and
Supplier agree. CBS or Supplier may call a special meeting by giving written
notice to the other party or parties and HQ. The location of the meetings is to
be Ottawa, unless otherwise agreed. The parties agree to have the necessary and
appropriate representatives, as identified prior to the meeting, in attendance
at the meetings. Supplier shall provide to CBS in writing, a complete
reconciliation report of Plasma and Products two (2) weeks prior to each
meeting, provided that the meeting is scheduled at least six (6) weeks
following the end of the prior quarter.


 


6.14        Change to CBS Standard Operating
Procedures


 


(a)           In
the event that CBS materially alters any of its Standard Operating Procedures (“SOP”)
affecting the collection of the Plasma to be used for Fractionation Services
during the Term of this Agreement unless otherwise agreed in writing, CBS must
inform Supplier of the proposed change at least sixty (60) days in advance of
implementing the change or, if such change is imposed by Health Canada within a
shorter time frame, then CBS will notify Supplier as soon as reasonably
possible. CBS will work with Supplier to evaluate the consequences of any such
change on the Services.


 


(b)           Within
sixty (60) days of receipt of the plan from CBS regarding implementing a
change, Supplier shall submit to CBS a report detailing any increased or
decreased costs associated with the change in SOP, including the cost of
investigation such as additional validation work or pathogen safety research
that may be required. CBS will notify Supplier if it accepts such costs.


 


7              DELIVERY OF FRACTIONATION PRODUCTS
AND RECORDS


 


7.1          Delivery Schedule and Report on Status of
Fractionation Product Delivery


 


Supplier shall deliver
Fractionation Products in accordance with the Fractionation Products Rolling
Forecast and the Weekly Delivery Schedule, and Supplier shall be required to
provide monthly written updates to CBS, which shall include delivery status
plans and a confirmation that the Fractionation Products to be delivered for
the upcoming [***] period (“Projected Delivery”).


 






***CONFIDENTIAL
TREATMENT REQUESTED


 


 


18

















 


7.2          Work in Process


 


(a)           The
volume of Work in Process Inventory (as defined in Subsection 7.2(b) below)
as measured by the volume in litres of Plasma held and in process, shall not
exceed the volume of Plasma picked up by Supplier from CBS and HQ in the
previous eight (8) months unless the excess volume is caused directly or
indirectly by CBS or HQ. Supplier shall not be responsible for disruption in
processing caused by insufficient Plasma available for pickup from CBS or HQ.


 


(b)           Work
in Process Inventory includes all Plasma provided by CBS and HQ that has been
picked up by Supplier for Fractionation Services. It also includes all
Fractionation Products, not yet released for distribution by Health Canada,
processed from Plasma provided by CBS and HQ in the possession of Supplier.
Work in Process Inventory does not include Plasma collected by CBS and HQ held
in Canada awaiting pick up by Supplier unless delay in processing is due to
Supplier’s failure to pick up Plasma.


 


7.3          Notice of Delay in Delivery of Fractionation Products


 


(a)           Except
as provided for in Section 7.4 should it become apparent prior to a
projected delivery date that a delivery of Fractionation Products cannot be
made as scheduled in the Fractionation Products Rolling Forecast, Supplier
shall promptly (but not later than forty-eight (48) hours after Supplier
becomes aware of the delay) notify CBS of such-delay and provide CBS with an
estimate, by telephone and facsimile transmission, of when Fractionation
Product will be delivered. If the delay in delivery will result in, or is
likely to result in, a Shortage of any Fractionation Product, Supplier shall be
required, whenever possible, to provide Replacement Fractionation Products to
CBS at the same price at which Supplier would have provided Fractionation
Products pursuant to this Agreement. The availability of Replacement
Fractionation Products from Supplier for the purpose of this Section shall
be determined at the sole discretion of Supplier acting reasonably.


 


(b)           In
the event that Supplier is unable to supply Replacement Fractionation Products
as set out above, CBS may begin the procedures set out in Subsections 3.9(b) and
(c).


 


(c)           Supplier
shall reimburse CBS for any reasonable out-of-pocket expenses incurred by CBS
in connection with any delay described in Subsection 7.3(a) above,
including, without limitation, expenses relating to applicable communications
with Consumers, hospitals and clinics.


 


19

















 


7.4          Delay
in Delivery of Fractionation Products due to CBS


 


Any delay in the delivery
of Fractionation Products resulting from the failure of CBS to make the Plasma
available to Supplier in accordance with the Plasma and Fractionation Products
Rolling Forecast shall be the responsibility of CBS, and Supplier shall have no
liability or responsibility therefrom. Supplier will make reasonable effort to
fractionate the delayed shipment in a timely manner. In the event of any such
delay, Supplier agrees to substitute Replacement Fractionation Products for
Fractionation Products if available, on the terms provided for in this
Agreement. The availability of Replacement Fractionation Products from Supplier
for the purpose of this Section shall be determined at the sole discretion
of Supplier acting reasonably.


 


7.5          Records


 


Supplier shall maintain
accurate records from the time that Supplier, as applicable, takes possession
of the Plasma, including but not limited to, as applicable, records of the
Plasma, Plasma Intermediates and Fractionation Products during acceptance,
processing and storage as well as laboratory testing reports, assays,
correspondence and other documents concerning lot processing, tracking plasma
units throughout the fractionation process and releases. Such records shall be
made available for examination by duly authorized representatives of CBS upon
reasonable request.


 


8              DELIVERY OF PRODUCT


 


8.1          Product Shelf Life


 


Supplier shall ensure
that all Products shipped to CBS pursuant to this Agreement shall have a
remaining minimum shelf life of twelve (12) months from the date of receipt by
CBS. Where a Product or vial size is in short supply, and the available Product
has less than the minimum remaining shelf life but no less than six (6) months
remaining shelf life, Supplier shall be entitled to deliver to CBS the Product
with Supplier’s agreement to take back any unused Product remaining in CBS’
inventory at the time of outdating. Where the only Product available has less
than six (6) months remaining shelf life, Supplier and CBS must agree to
the shortened shelf life in writing and Supplier agrees to take back any unused
Product remaining in CBS’ inventory at the time of outdating, all at Supplier’s
cost. All the Products returned under this Section will be credited by the
Supplier.


 


8.2          Delivery of Products


 


(a)           Supplier
will provide to CBS documentation satisfactory to CBS to establish that the
Products received by CBS were transported under conditions where their quality
and safety were not compromised.


 


(b)           Supplier
agrees to transport all Products using a carrier selected by Supplier, which
shall be required to operate in compliance with Supplier’s established standard
operating procedures.


 


20

















 


(c)           When
Products are available for shipment to CBS, a shipment notification shall be
sent by Supplier, by facsimile to CBS for each lot, outlining the projected
delivery date and method, product code, lot number expiry date, quantity, and
include a copy of Health Canada’s lot release, and the certificate of analysis
which includes the date and place of manufacture of the Product and the quality
control test results as well as their acceptable ranges.


 


(d)           Supplier
agrees to co-ordinate all importation of the Products into Canada and to be
responsible for all costs associated with the delivery of the Products into
Canada and to the Warehouse, including transportation, storage, customs, excise,
duty and brokerage fees. 


 


(e)           The
Products will be delivered by Supplier to the Warehouse. In the event that CBS
changes the location of its Warehouse during the Term:


 


(i)    where
there are additional costs associated with the change of location, CBS shall be
responsible for such additional costs associated with the delivery of the
Products to the new location; or


 


(ii)   where
there is a decrease in cost associated with the change of location, CBS shall
be entitled to a price reduction for such decrease in costs associated with the
delivery of the Products to the new location.


 


Such costs shall include
transportation, storage, customs, excise, duty and brokerage fees incurred by
reason of such change of location. In emergencies or other extenuating
circumstances Supplier will, at the request of CBS, deliver Products to
destinations other than the Warehouse. Any additional costs resulting from such
change in delivery shall be the responsibility of CBS; unless said emergency
and/or extenuating circumstances arise directly or indirectly from the actions,
whether negligent or not, omissions or misconduct of Supplier, Supplier’s
carrier or its permitted assigns. In this event, Supplier shall be liable for
all such costs.


 


8.3          Responsibility for Products


 


Supplier shall be
responsible for and bear all risk of loss or damage to the Products to be
delivered by Supplier to the Warehouse while the Products are in Supplier’s
care, custody and control. Such responsibility includes, but is not limited to,
any loss or damage resulting from the improper storage, handling, packing,
crating, loading, blocking and/or transportation of the Products to be
delivered by Supplier. For the purpose of this Section, the time during which
the Products are in transit from Supplier’s facility to the Warehouse, or other
reasonable destination designated by CBS, shall be deemed to be a period during
which the Products are in the care, custody and control of Supplier. For
greater certainty, the Products shall be f.o.b. the Warehouse.


 


21

















 


8.4          Duty of Inspection


 


(a)           CBS
shall inspect the pallets of Products within ten (10) days after delivery
to ensure there is no obvious damage to external packaging;


 


(b)           CBS
shall notify Supplier of damage as set out above and shall return any damaged
Products to Supplier, at Supplier’s expense, and shall receive a full credit.
For greater certainty, CBS has no duty to test the Products and this provision
does not apply to latent defects or product deficiencies and shall not relieve
Supplier of its liability or responsibility for such defects or deficiencies.


 


9              PRICE, PAYMENT TERMS AND INVOICES


 


9.1          Price


 


The prices for Commercial
Products to be charged to CBS by Supplier, during the first twelve (12) months
of the Term are in US dollars in accordance with Schedule “A”. The prices to be
charged to CBS for the Services during the first twelve (12) months of the Term
are in US Dollars and charged according to Fractionation Products produced in
accordance with Schedule “D”.


 


9.2          Price Adjustments


 


(a)           Annual


 


Prices for all Products
may increase at the start of each Agreement year (April 1) by up to the
maximum of the average increase in CPI over the previous calendar year.
Supplier shall notify CBS in writing within forty-five (45) days of the start
of each Agreement year of the proposed price change.


 


Notwithstanding the
foregoing, if the average wholesale price in the US of any Product decreases in
years 3 or 4 of the Agreement compared to the average wholesale price in the US
in the previous year, then the price for such Product payable under this
Agreement in years 4 and 5 respectively shall be [***].


 


(b)           Improvements Mandated by Regulator – Products


 


Where Supplier is
directed by the regulator with authority, to make an Improvement which will
result in a price increase for a Product, Supplier shall provide CBS with
notice in accordance with Section 10.2 and shall substantiate the proposed
price increase. Supplier and CBS shall negotiate in good faith the amount and
timing of any proposed price increase to CBS. If CBS and Supplier do not agree
on the price increase for the mandated Improvement, then Supplier shall have
thirty (30) days to withdraw the price increase. Price increase shall not take
effect until after said thirty (30) day period. If Supplier does not do so,
then CBS may elect to accept the increase or terminate the Agreement with
respect to the Product immediately without cost or penalty.


 






***CONFIDENTIAL
TREATMENT REQUESTED


 


 


22

















 


(c)           Supplier Initiated Improvements – Commercial Products


 


With respect to an
Improvement initiated by Supplier for a Commercial Product which will result in
a price increase to CBS, Supplier shall notify CBS by April 1 of the prior
year. Supplier shall substantiate the price increase and Supplier and CBS shall
negotiate in good faith the amount and timing of any proposed price increase to
CBS which, for greater clarity, will not be implemented prior to April 1
of the following year. If CBS provides final notice to Supplier n writing that
it does not agree to the price from Supplier, then Supplier shall have thirty
(30) days to withdraw the price increase. Price increase shall not take effect
until after said thirty (30) day period. If Supplier does not do so, then CBS
may elect to accept the increase or terminate the Agreement with respect to the
Product immediately without cost or penalty.


 


(d)           Supplier Initiated Improvements – Fractionation
Products


 


With respect to an
Improvement initiated by Supplier for a Fractionation Product, Supplier shall
notify CBS in accordance with Section 10.2, and;


 


(i)    If this
Improvement will increase the price of the Fractionation Product to CBS, or
will require CBS to make a change to its collection, processing, storage or
shipping of Plasma (“CBS Process”), CBS and Supplier shall negotiate in good
faith the amount and timing of the proposed price increase to CBS. If CBS does
not agree to accept a price increase, or is unwilling or unable to make the
required change to CBS Process then Supplier remains obligated to continue to
provide Fractionation Services in accordance with this Agreement until the
expiry of the Term. If the Supplier Initiated Improvement becomes mandated by
the regulator during the Term of the Agreement then CBS agrees to pay the price
increase retroactively to the date of implementation. If CBS and Supplier do
not agree on the price increase for the mandated Improvement, the parties shall
proceed to arbitration.


 


(ii)   If this
Improvement will not increase the price and does not require a change to CBS
Process, Supplier may implement such Improvement on notice by Supplier to CBS.


 


Notwithstanding anything
to the contrary in this Agreement, prices shall not be increased and CBS shall
pay no charge or fee for the implementation by Supplier of the ISBT 128
standards during the term of this Agreement.


 


9.3          Payment Terms


 


Payment of invoices not
disputed in good faith shall be net thirty (30) days from the latter of the
date of the receipt of the Product by CBS or invoice from Supplier. The
Supplier agrees to provide CBS with a prompt payment discount of one percent
(1%) whenever payment for an invoice is made to the Supplier within ten (10) days
of receipt of invoice.


 


23

















 


9.4          Invoices


 


Supplier shall include a
packing slip with all deliveries of Products. Supplier shall deliver to CBS an
invoice. in duplicate, for the Products delivered. All invoices shall be in US
dollars and shall set out the amounts of the Products, less any Products
returned in accordance with this Agreement, Goods and Services Tax (“GST”) and
other taxes payable on the order as well as Supplier’s GST registration number
if applicable.


 


9.5          Pricing Not Affected by Remedies


 


Notwithstanding anything
to the contrary in this Agreement, in the event that CBS exercises any right or
remedy as a result of supply problems caused or to the extent contributed by
Supplier that reduces the amount of any Product delivered to CBS by Supplier under
this Agreement, the annual volume for that Product may be reduced by such
amount at the discretion of CBS but the pricing for that Product shall remain
at the level determined by Schedule “A” as if the annual volume were not so
reduced.


 


10           REGULATORY AND QUALITY ASSURANCE
MATTERS


 


10.1        Regulatory Condition of Supply


 


Supplier shall obtain and
submit a copy of the Notice of Compliance (“NOC”) issued by Health Canada to
CBS in order to show that the Products to be supplied meet the requirements of
Health Canada. If the NOC is subject to any conditions, then Supplier shall,
not less than one (1) time per year, update CBS on the progress in
satisfying the conditions, and shall issue a letter to health care providers
not less than one (I) time per year describing the original conditions and
the progress in satisfying the conditions. This letter shall be distributed to
hospitals by CBS.


 


10.2        Improvements


 


(a)           In the event that Supplier makes or plans to make an
Improvement, Supplier shall advise CBS of such change or planned change at
least three (3) months prior to the implementation of any such change,
except under exceptional circumstances, such as where patient safety is
involved, when the notification period may be shorter. Updates will be provided
by Supplier at the regular semi-annual meetings.


 


(b)           In the event that the Improvement will require CBS to
change CBS Process for fractionation, Supplier shall provide CBS with one (1) year
advance notice to enable it to make the change, validate it and apply to Health
Canada for amendment to its license.


 


(c)           In the event that any regulator with authority
notifies Supplier that it will be requiring any such Improvement in a shorter
timeframe, Supplier shall notify CBS within five (5) Business Days of
receipt of notice by Supplier of such required change.


 


(d)           In addition, if the Improvement requires approval by
Health Canada, Supplier shall notify CBS within five (5) Business Days of
the date the application is filed with Health Canada.


 


24

















 


(e)           If
Supplier makes any Improvement to the Commercial Products and unless the
parties otherwise agree, Supplier shall use all reasonable efforts to include
such Improvement in the Commercial Products being supplied under this
Agreement. Supplier will at the time of, or within a reasonable timeframe and
no longer than six (6) months after filing the submission for the improved
or changed Commercial Product, apply for approval of Health Canada for the
Improvement. Should the Improvement not be permitted due to Health Canada
requirements, Supplier will advise CBS.


 


(f)            No
party shall be responsible for, or have any liability to, any other party with
respect to any delays in obtaining such approval to the extent these delays are
caused by Health Canada or result from the failure to meet any requirements
imposed or administered by Health Canada that are significantly more onerous
than those of the FDA.


 


10.3        Special Access Programme


 


(a)           If
any Commercial Product, licensed at the time of execution of this Agreement, is
no longer licensed by Health Canada and becomes available only under SAP during
the Term, such Commercial Product shall be provided to CBS for release pursuant
to SAP (“SAP Commercial Product”).


 


(b)           Notwithstanding
Subsection 10.3(a), if an action or decision of Health Canada requires CBS to
move to a licensed product produced by any other manufacturer, Supplier shall
reimburse CBS for any inventory of SAP product(s) upon return of such SAP
product. In this event, CBS will have the option to terminate this Agreement
with respect to such SAP Commercial Product(s).


 


(c)           If
a SAP Commercial Product becomes licensed by Health Canada during the Term, and
CBS has not moved to a licensed product produced by another manufacturer,
Supplier agrees to replace any inventory of SAP Commercial Product with
licensed Commercial Product at no cost to CBS. If the SAP Commercial Product is
converted into a licensed Commercial Product by Health Canada and may validly
be distributed, then CBS will not be entitled to the replacement of said
inventory.


 


10.4        Communications


 


Supplier shall promptly
advise CBS and provide CBS with copies of the following correspondence with
Health Canada regarding the Products manufactured by Supplier, their manufacture,
the processing of Plasma into Fractionated Product, and/or the inspection of
any of Supplier’s facilities:


 


(i)      Supplemental/New Drug Submission and a New Drug
Submission cover letters only, or if the said letters do not clearly identify
the nature of the submission, documentation identifying the nature of the
submission;


 


(ii)     Notices of Compliance;


 


25

















 


	
  (iii)

  	
  Product Monographs
  approved by Health Canada;

  
	
   

  	
   

  
	
  (iv)

  	
  Health Canada Exit Notices and Supplier’s
  Responses;

  
	
   

  	
   

  
	
  (v)

  	
  FDA 483’s and
  Supplier’s Responses;

  
	
   

  	
   

  
	
  (vi)

  	
  Recall/Withdrawal information and
  correspondence;

  
	
   

  	
   

  
	
  (vii)

  	
  Warning letters issued by the FDA or Notices
  of Intent issued by Health Canada with respect to premises where Products are
  manufactured; and

  
	
   

  	
   

  
	
  (viii)

  	
  Changes to the telephone numbers to be used by
  Consumers or healthcare professionals to report adverse drug reactions both
  during normal business hours and after hours.

  



 


Other documents regarding
regulatory issues will be provided to CBS by agreement of Supplier, on a case
by case basis.


 


10.5        Supplier Information


 


Supplier, shall, upon
execution of this Agreement, notify CBS in writing, of the name of its senior
regulatory person. In the event of a change of the designated person during the
Term, Supplier shall immediately notify CBS, in writing, of such change.


 


10.6        Compliance Audit


 


CBS shall be entitled to
audit Supplier’s facilities and quality systems, the books and records of
Supplier in respect of production and quality assurance matters arising from
the Agreement; provided that CBS shall be responsible for its own costs and is
conducted at a reasonable time. The results of all audits will be maintained as confidential to be
used for the purposes of and as contemplated by this Agreement or as otherwise
required by law.


 


Supplier shall provide
responses including corrective measures to audit observations in a timely
manner. Supplier shall use its best efforts to implement said measures within a
reasonable time frame.


 


11           PRODUCT WITHDRAWALS/RECALLS


 


11.1        Recall/Withdrawal


 


(a)           Immediately upon execution of this Agreement, Supplier
shall establish and CBS shall be
notified by Supplier of its respective toll-free telephone number and
contact name(s) for customers’ enquiries or questions.


 


26














 


(b)                                 Supplier must provide supporting information
or documentation to CBS for dissemination immediately and not later than
twenty-four (24) hours by telephone and facsimile of a decision to
Recall/Withdraw any of the Products.


 


(c)                                  Subject to Sections 4.2 and 4.3, all costs of
Recall/Withdrawal including all incremental costs incurred by the parties, both
internal and out of pocket, shall be the responsibility of and shall be paid by
CBS if the causation is attributable to CBS or by Supplier if the causation is
attributable to Supplier.


 


(d)                                 Subject to Subsection 11.1(e), Supplier will
provide the spokesperson on the specifics of the Recall/Withdrawal and shall
provide an explanation as to why the Product was recalled/withdrawn unless the
Withdrawal is initiated by CBS.


 


(e)                                  Any news release or disclosure relating to a
removal from the market, quarantine, Recall or Withdrawal of a Product and
referencing CBS must be reviewed and approved by CBS prior to release by
Supplier.


 


(f)                                    Any news release or disclosure, excluding
customer cover letters, relating to a removal from the market, quarantine,
Recall or Withdrawal of a Product and referencing Supplier must be reviewed and
approved by Supplier prior to release by CBS.


 


11.2        Patient Notification System


 


Supplier
understands that the Patient Notification System (“PNS”) was created to provide
a fast, confidential method to provide information to Consumers on Recall or
Withdrawal events. Supplier agrees, at its cost, to participate in the PNS as a
subscriber and to provide all information regarding Recalls or Withdrawals to
PNS at the same time the information is provided to Health Canada and CBS.


 


11.3        Adverse Event Reporting


 


In
accordance with Health Canada regulations, CBS will promptly notify Supplier by
facsimile of any adverse drug reactions potentially associated with the use of
the Products reported to it. Supplier shall provide written reports on
investigation within sixty (60) days of receipt of CBS’ written notification.


 


11.4        Replacement Products and Replacement
Fractionation Products


 


Any
Replacement Products or Replacement Fractionation Products proposed by Supplier
under Sections 3.6, 3.8, 3.9, 6.12, 7.3 and 7.4 must be licensed by Health
Canada or if no Replacement Products or Replacement Fractionation Products are
licensed by Health Canada, approved by Health Canada under its SAP.


 


27

















 


12           REPRESENTATIONS,
WARRANTIES AND INSPECTION


 


12.1        Representations
and Warranties of the Parties


 


Each
of the parties represent and warrant that at the time of entering into this
Agreement:


 


(a)                                  It
is duly organized, validly existing and is in good standing under the laws of
its jurisdiction of incorporation, and is qualified to do business and in the case
of CBS to carry on its activities, and is in good standing in each jurisdiction in which the performance of its obligations hereunder requires
such qualification (except where such failure to qualify would not have a
material adverse effect) and has all requisite power and authority, corporate
or otherwise, to conduct its business as now being conducted, to own, lease and
operate its properties and to execute, deliver and perform this Agreement.


 


(b)                                 The execution, delivery and performance by it
of this Agreement have been duly authorized by all necessary corporate or other
legal action and do not and will not:


 


(i)                          require any consent or approval of its shareholders
or members as the case may be;


 


(ii)                       violate any provision of any law, rule,
regulation, order, writ, judgment, injunction decree, determination or award
presently in effect having applicability to it and known to it or any provision
of its charter documents; or


 


(iii)                    result in a breach of or constitute a default
under any material agreement, mortgage, lease, license, permit or other
instrument or obligation to which it is a party or by which it or its
properties may be bound or affected.


 


(c)                                  This Agreement is a legal, valid and binding obligation of it enforceable against
it in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ and contracting parties’ rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).


 


(d)                                 It is not under any obligation to any person,
or entity, contractual or otherwise,
that is conflicting or inconsistent in any respect with the terms of this
Agreement or that would impede the diligent and complete fulfillment of its
obligations.


 


(e)                                  It has good and marketable title to or valid
leases or licenses for all its properties, rights and assets necessary for the
completion of its responsibilities under this Agreement, subject only to the
claim of any relevant lessor or licensor.


 


28

















 


(f)                                  There are no legal or arbitral proceedings,
or any proceedings by or before any governmental or regulatory authority or
agency, now pending or (to its knowledge) threatened against it that, if
adversely determined could (either individually or in the aggregate) have a
material adverse effect on its ability to perform its obligations under this
Agreement.


 


12.2                        Representations and Warranties on
the Products


 


12.2.1                Supplier represents and warrants to CBS that
the Products shall:


 


(i)            Be manufactured, stored, released and
transported in accordance with:


 


(a)                                  Canadian regulations (including without
limiting the generality of the foregoing, Good Manufacturing Practices) and all
other applicable laws and regulations; and


 


(b)                                 Suppliers Quality Assurance and Quality
Control processes;


 


(ii)                                Comply with the certificates of analysis;


 


(iii)                             Conform to any and all Specifications,
descriptions or designs furnished by Supplier in any Product inserts or
labelling;


 


(iv)                            Comply with all laws, regulations or codes in
force in Canada; and


 


(v)                               Be transported to CBS in a manner in which
their quality, safety and efficacy are not compromised.


 


12.2.2                Supplier further represents and warrants
that, if required, valid Health Canada approvals have been issued and are in
good standing. Supplier shall notify CBS immediately upon any notice of
deficiencies or requests for submissions with respect to any of the Products.


 


12.3                      Title and Warranty on the
Products


 


Supplier
hereby warrants title in and to the Commercial Products. 


 


12.4       Guaranteed Yield


 


(a)                                Supplier guarantees that the minimum annual
g/litre IGIV yield from recovered Plasma shall be [***] g/litre.


 


(b)                               Supplier guarantees that the minimum yield
for IGIV in g/Iitre from source or buffy coat plasma shall be the average yield
of the first [***] lots of source or buffy coat plasma from CBS provided
by Supplier.


 






***CONFIDENTIAL TREATMENT REQUESTED


 


 


29

















 


(c)                                Supplier guarantees that the minimum yield
for Albumin 25% will be [***] g/litre.


 


(d)                               If the yield falls below the above stated
amounts for either IGIV or Albumin 25%, Supplier will provide additional
Commercial Product to make up the deficiency, at the lesser of the price CBS
pays for Fractionation Products or Commercial Products.


 


12.5        Current Information


 


Supplier
represents and warrants that the information currently provided to CBS and
which will, from time to time, be amended or further provided with the
Products, including without limitation, any regulatory filings, circulars and
package inserts, are current, accurate and fulfill any regulatory requirements
for the Products.


 


12.6        No Waiver


 


Each
of the foregoing warranties shall not be (nor shall the same be deemed to be)
waived, in whole or in part, as a result of any audit or pre-testing conducted
by or on behalf of CBS or any third party, except as expressly provided for
herein.


 


12.7        Survival of Representations and
Warranties


 


All
representations, warranties, covenants and indemnities made herein or in any
document delivered pursuant hereto or incorporated by reference herein, whether
expressed or implied by law or otherwise, shall survive inspection and
acceptance thereof and payment thereof and shall ensure to the benefit of the
parties notwithstanding the termination or expiration of this Agreement.


 


13           PATENT PROTECTION


 


13.1        No Infringement


 


Supplier
hereby represents and warrants to the best of its knowledge to CBS that none of
the Commercial Products or processes related to the provision of Fractionation
Services or any component thereof infringe or will constitute an infringement
of any patents, trademarks, cell ownership, industrial designs, copyrights and
trade secrets when Products are used according to approved  uses.


 


13.2        Infringement by a Product or Process


 


Should
any Commercial Product or process related to the fractionation of Plasma be
found to infringe any third party intellectual property rights, and such
infringement negatively impacts CBS or created liability for CBS, Supplier
shall, in addition to the indemnity provided in Section 14.3, in respect
to each infringing Product or process:


 


(i)                                     substitute the Product with fully equivalent
non-infringing product;


 






***CONFIDENTIAL TREATMENT REQUESTED


 


30

















 


	
  (ii)

  	
   

  	
  modify
  the infringing Product or process so that it no longer infringes but remains
  functionally equivalent; or

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  obtain
  for CBS at Supplier’s expense, the right to continue to use the Commercial
  Products, or Fractionation Products manufactured by the infringing process.

  



 


14                                  INSURANCE AND INDEMNIFICATION


 


14.1                        Supplier’s Insurance


 


Supplier
shall provide and maintain during the Term of the Agreement, at its own
expense, the following insurance coverage: general liability insurance shall
have limits no less than ten million dollars ($10,000,000) and product
liability insurance shall have limits no less than ten million dollars
($10,000,000) per incident and 10 million dollars ($10,000,000) per annum in
the aggregate.


 


(a)                                  Supplier shall provide CBS with proof of
valid insurance coverage for Supplier. A certificate of insurance issued by the
insurer shall be acceptable to CBS as proof of coverage.


 


(b)                                 All of the aforementioned certificates
provided by the insurer to Supplier shall certify the following:


 


	
  (i)

  	
   

  	
  that
  the required insurance policies are valid and the coverage specified in this
  Section 14.1, is in effect;

  
	
  (ii)

  	
   

  	
  that
  CBS has been added to the certificate as an additional named insured with
  respect to the general liability insurance referred to in this
  Section 14.1;

  
	
  (iii)

  	
   

  	
  a
  cross-liability clause is in existence;

  
	
  (iv)

  	
   

  	
  the
  insurer shall provide notice of amendments or cancellation to CBS; and

  
	
  (v)

  	
   

  	
  a
  waiver of subrogation in favour of CBS.

  



 


(c)                                  Supplier shall provide CBS with at least
fifteen (15) days advance written notice of any policy cancellation or any
change in the amount of coverage or type of insurance stipulated with respect
to Supplier. In no case shall Supplier materially alter, cancel or allow to
lapse any stipulated insurance while CBS is receiving Products or Services
pursuant to the terms and conditions of this Agreement.


 


(d)                                 The foregoing insurance provisions shall not
limit the amount or type of insurance otherwise required by law. It shall be
the sole responsibility of Supplier to determine what additional insurance
coverage, if any, is necessary and advisable for its own protection or to
fulfill its obligations under this Agreement. Any such additional insurance
shall be provided and maintained by Supplier, as applicable, at its own
expense.


 


31

















 


(e)                                  Supplier warrants to CBS that it has not done
or will not do anything which would cause the stipulated insurance policy or
policies carried by Supplier to be suspended, impaired, cancelled or otherwise
adversely affected,


 


(f)                                    In the event of a proceeding, claim or demand
brought or made against CBS, involving Supplier, CBS shall forthwith provide
notice to Supplier and vice versa.


 


14.2        CBS Insurance


 


CBS
shall provide and maintain during the term of the Agreement, at its own
expense, the following insurance coverage: general liability insurance shall
have limits no less than ten million dollars ($10,000,000) per incident and ten
million dollars ($10,000,000) per annum in the aggregate.


 


(a)                                  CBS shall provide Supplier with proof of
valid insurance coverage. A certificate of insurance issued by the insurer
shall be acceptable to Supplier as proof of coverage.


 


(b)                                 All of the aforementioned certificates
provided by the insurer to CBS shall certify the following:


 


	
  (i)

  	
   

  	
  that
  the required insurance policies are valid and the coverage specified in this Section 14.2,
  is in effect;

  
	
  (ii)

  	
   

  	
  that
  Supplier has been added to a certificate as an additional named insured with
  respect to the general liability insurance referred to in this Section 14.2;

  
	
  (iii)

  	
   

  	
  a
  cross-liability clause is in existence;

  
	
  (iv)

  	
   

  	
  the
  insurer shall provide notice of amendments or cancellation to Supplier; and

  
	
  (v)

  	
   

  	
  a
  waiver of subrogation in favour of Supplier.

  



 


(c)                                  CBS shall provide Supplier with at least
fifteen (15) days advance written notice of any policy cancellation or any
change in the amount of coverage or type of insurance stipulated. In no case
shall CBS materially alter, cancel or allow to lapse the stipulated insurance
during the Term.


 


(d)                                 The foregoing insurance provisions shall not
limit the amount or type of insurance otherwise required by law. It shall be
the sole responsibility of CBS to determine what additional insurance coverage,
if any, is necessary and advisable for its own protection or to fulfill its
obligations under this Agreement. Any such additional insurance shall be
provided and maintained by CBS at its own expense.


 


(e)                                  CBS warrants to Supplier that CBS has not
done or will not do anything which would cause the stipulated insurance policy
or policies carried by CBS to be suspended, impaired, cancelled or otherwise
adversely affected.


 


(f)                                    In the event of a proceeding, claim or demand
brought or made against Supplier involving CBS, Supplier shall forthwith
provide notice to CBS and vice versa.


 


32

















 


14.3        Indemnity


 


(a)                                  Each of the Parties shall indemnify and hold
the other(s) and its respective members, directors, officers, employees,
agents and other representatives harmless from and against all damages, costs,
expenses, charges, losses or liabilities whatsoever (including, without
limitation, legal fees and claims of third parties of whatsoever kind, but
excluding special, incidental or consequential damages) arising from or
incidental to any failure by such party to perform and discharge its obligations
and liabilities herein; PROVIDED HOWEVER that this indemnity shall not apply
(nor shall it be deemed to apply) to the extent of any damages, costs,
expenses, charges, losses or liabilities whatsoever resulting from, or
contributed to by, the negligence, wrongful intentional act or failure to act
or breach of Agreement of the claiming party or its members, trustees,
directors, officers, employees, agents and representatives.


 


(b)                                 CBS hereby agrees to indemnify and hold
Supplier, and its respective directors, officers, employees, agents and other
representatives harmless from and against all damages, costs, expenses,
charges, losses or liabilities whatsoever (but excluding special, incidental or
consequential damages) arising from or incidental to any latent defect in the
Plasma; PROVIDED HOWEVER that this indemnity shall not apply (nor shall it be
deemed to apply) to the extent that those damages, costs, expenses, charges,
losses or liabilities whatsoever resulted from:


 


	
  (i)

  	
   

  	
  the
  negligence of, or an intentional act or failure to act by Supplier; or,

  
	
  (ii)

  	
   

  	
  the
  material breach by Supplier, of any of the terms or conditions of this
  Agreement; or

  
	
  (iii)

  	
   

  	
  any
  unauthorized or false warranty made by Supplier.

  



 


(c)                                  Supplier hereby agrees to indemnify and hold
CBS and its respective directors, officers, employees, agents and other
representatives harmless from and against all damages, costs, expenses,
charges, losses or liabilities whatsoever (but excluding special, incidental or
consequential damages) arising from or incidental to any latent defect in the
Products; PROVIDED HOWEVER that this indemnity shall not apply (nor shall it be
deemed to apply) to the extent that those damages, costs, expenses, charges,
losses or liabilities whatsoever resulted from:


 


	
  (i)

  	
   

  	
  the
  negligence of, or an intentional act or failure to act by CBS; or,

  
	
  (ii)

  	
   

  	
  the
  material breach by CBS of any of the terms or conditions of this Agreement;
  or,

  
	
  (iii)

  	
   

  	
  any
  unauthorized or false warranty made by CBS.

  



 


33

















 


(d)                                 In the event that a party (the “Indemnitee”)
becomes aware of any action, claim or demand in respect of which the other
party (the “Indemnitor”) is liable to indemnify indemnitee pursuant to this
Agreement, the Indemnitee shall promptly notify the Indemnitor thereof. The
Indemnitor shall at all times have the right at its sole and only expense to
dispute and contest in the name of the Indemnitee or otherwise any such action,
claim or demand. The Indemnitee shall fully co-operate with the Indemnitor and
its counsel in any proceedings with respect to any such action, claim or
demand,


 


(e)                                  These indemnities shall survive the
termination of this Agreement and shall be in addition to and shall not affect
any other indemnity contained herein. The Indemnitor shall also have the right
at all times, at its sole and only expense, to settle any action, claim or
demand subject to the right of the Indemnitee to approve any and all
documentation of or relating to, such settlement.


 


14.4       Approval of Counsel


 


The
Indemnitee reserves the right to approve or reject (acting reasonably) counsel
for any lawsuit or proceeding for which any claim for indemnification may be
made against the Indemnitor. In the event of any such suit neither party nor
its representatives shall make any public disclosure or comment (other than as
part of the actual legal proceedings) without the prior written consent of the
other.


 


15           CHANGE


 


15.1       Technological Change


 


(a)                                  If CBS believes, acting reasonably, that


 


(i)                       a third party has Health Canada’s approval to introduce a new product
to the Canadian market which is functionally equivalent to, but significantly
technologically and/or scientifically superior to any of the Commercial
Products supplied under this Agreement; or


 


(ii)                   the Commercial Products arc obsolete;


 


CBS
shall promptly notify Supplier as to its belief and shall provide reasoning and
documentation to support such claim. Supplier shall have fifteen (15) days from
the receipt of the said notice to respond to CBS, either agreeing or
disagreeing with such belief and shall provide reasoning and documentation for
its position.


 


If
Supplier agrees with CBS, CBS may immediately proceed to acquire Replacement
Products from alternative sources. If Replacement Products are obtained by CBS
the relevant quantity of Commercial Product to be obtained by Supplier pursuant
to the Agreement shall be decreased accordingly.


 


34

















 


If
Supplier fails to respond to CBS within fifteen (15) days, then CBS shall have
the right to cancel the Agreement with respect to the Commercial Product(s) in
question.


 


(b)                                 If CBS believes, acting reasonably, that:


 


	
  (i)

  	
   

  	
  a
  third party will be introducing or has introduced a new process for
  fractionating Plasma which is functionally equivalent to, but significantly
  technologically and/or scientifically superior to the process used for
  fractionating CBS Plasma pursuant to this Agreement; or

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  the
  Fractionation Products arc obsolete;

  



 


CBS
shall promptly notify Supplier, as to its belief and shall provide reasoning
and documentation to support such claim. Supplier shall have fifteen (15) days
from the receipt of the said notice to respond to CBS, either agreeing or
disagreeing with such belief and shall provide reasoning and documentation for
its position.


 


If
Supplier agrees with CBS, CBS may immediately proceed to contract with
alternative source(s) for the purchase of fractionation services. If an
alternative source of service is obtained by CBS the portion of the Agreement
relating to Fractionation Services or particular Fractionation Products shall
be terminated, subject to Section 5.4.


 


If
Supplier fails to respond to CBS within fifteen (15) days, then CBS shall have
the right to cancel the Agreement with respect to the Services, subject to Section 5.4.


 


15.2                      Dispute Resolution


 


(a)                                For the purposes of Section 15.1 only,
if Supplier does not agree:


 


	
  (i)

  	
   

  	
  that
  the third party’s product or service is significantly technologically and/or
  scientifically superior; or,

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  that
  the Commercial Product is obsolete;

  



 


Supplier
shall so notify CBS, and CBS and Supplier shall attempt, by bona fide
negotiations to resolve their differences, within a reasonable period not to
exceed thirty (30) days from CBS’ receipt of Supplier’s notice.


 


In
the event that CBS and Supplier cannot resolve a dispute under this Section within
the thirty (30) day period, the matter may be referred to arbitration by
Supplier pursuant to the provisions of Section 17.


 


(b)                               If, after the thirty (30) day period set out
in (a) such dispute remains unresolved, CBS shall be entitled to purchase
Commercial Products or Fractionation Services from the third party pending
resolution of the dispute. If the dispute is resolved in Supplier’s


 


35

















 


favour,
CBS shall be required to resume purchasing the Products or Services from
Supplier as soon as is reasonably possible and shall be liable to Supplier for
any loss, including any loss of profit, incurred by Supplier as a result of CBS
purchasing products or fractionation services from a third party pursuant to
this Section. The parties hereto agree that a reasonable estimate of Supplier’s
loss for the purposes of this Section shall be fifteen percent (15%) of
the price CBS pays for Product that CBS failed to purchase because of CBS’
decision to purchase products or services from a third party.


 


16           TERMINATION


 


16.1        Termination of
Agreement


 


CBS
or Supplier, at its option, may, without prejudice to any other right or remedy
it may have, immediately terminate this Agreement or suspend its obligations
hereunder if an Event of Default (as defined in Section 16.2, or 16.3 as
applicable) occurs (other than, in the case of CBS, an Event of Default with
respect to itself, or in the case of Supplier, an Event of Default with respect
to itself), by giving the other parties written notice thereof. If such
termination or suspension occurs, the terminating party shall be relieved of
any further obligations under this Agreement, other than obligations that are
intended to survive termination and payment of any outstanding invoices or
obligations previously incurred.


 


16.2        Supplier Event of Default


 


A
“Supplier Event of Default” shall mean:


 


(a)                                  the failure by Supplier to meet the claims,
representations or warranties made on labelled promotional or Product
information or on labelled Products as required pursuant to this Agreement;


 


(b)                                 any misrepresentation herein contained
resulting in a material adverse effect on CBS, or any material breach by
Supplier of any warranty, obligation or other provision of this Agreement. It
is acknowledged and agreed that persistent or repeated minor breaches can
amount to a material breach if they cause a significant adverse effect to CBS;


 


(c)                                  an attachment is made of all or substantially
all of the property or assets of Supplier;


 


(d)                                 the making of a general assignment by
Supplier for the benefit of its creditors;


 


(e)                                  the appointment (by court order or otherwise)
of a receiver, receiver/manager or a trustee for the benefit of one or more of
the creditors of Supplier;


 


(f)                                    the filing of a voluntary petition in
bankruptcy, adjudication as a bankrupt or the filing of an answer or admission
seeking relief pursuant to applicable bankruptcy law pertaining to Supplier or
any filing by or against Supplier of any proceedings under the Companies’ Creditors Arrangement Act, R.S.C.
1985, c. C.-36, as amended; or comparable legislation in the USA; or


 


36

















 


(g)                                 the filing of an involuntary petition in
bankruptcy pertaining to Supplier which petition is not dismissed, vacated, set
aside or stayed within forty-five (45) days.


 


A
Supplier Event of Default shall, for the events described in Subsections 16.2(a) and
(b) above, take effect thirty (30) days after notice being given by CBS to
Supplier, specifying the default or breach, during which time Supplier shall be
entitled to cure the noted default.


 


16.3        CBS Event of Default


 


A
“CBS Event of Default” shall mean:


 


(a)                                  any misrepresentation herein contained
resulting in a material adverse effect on Supplier or any material breach by
CBS of any warranty, obligation or other provision of this Agreement. It is
acknowledged and agreed that persistent or repeated minor breaches can amount
to a material breach if they cause a significant adverse effect to Supplier;


 


(b)                                 an attachment is made of all or substantially
all of the property or assets of CBS;


 


(c)                                  the making of a general assignment by CBS for
the benefit of its creditors;


 


(d)                                 the appointment (by court order or otherwise)
of a receiver, receiver/manager or a trustee for the benefit of one or more of
the creditors of CBS;


 


(e)                                  the filing of a voluntary petition in
bankruptcy, adjudication as a bankrupt or the filing of an answer or admission
seeking relief pursuant to applicable bankruptcy law pertaining to CBS or any
filing by or against CBS of any proceedings under the Companies’ Creditors Arrangement Act, R.S.C.
1985, c. C.-36, as amended;


 


(f)                                    the filing of an involuntary petition in
bankruptcy pertaining to CBS which petition is not dismissed, vacated, set
aside or stayed within forty-five (45) days; or


 


(g)                                 CBS, or its successor, ceases to co-ordinate
or loses the authority to co-ordinate the national blood supply program for
Canada, excluding the province of Quebec.


 


A
CBS Event of Default shall, for the events described in Subsection 16.3(a) above,
take effect thirty (30) days after notice being given by Supplier specifying
the default or breach, during which time CBS shall be entitled to cure the
noted default.


 


37

















 


17                                  DISPUTE RESOLUTION


 


17.1                        Arbitration


 


(a)                                  The parties agree that in the event of any
dispute or claim between CBS and Supplier arising under or in connection with
this Agreement other than described in  Section 15.1, or any order
issued pursuant to this Agreement, including, but not limited to, the
interpretation or application of this Agreement, the parties will endeavour to
resolve the dispute with diligence and good faith negotiations.


 


(b)                                 If the parties have been unable to resolve
the dispute, despite diligence and good faith negotiations, such dispute or
claim shall be settled by arbitration, as dictated by this Section.


 


(c)                                  All questions, disputes or differences of
opinion involving the  interpretation, application,
administration, or alleged violation of this Agreement including a question of
whether a matter is arbitrable shall be settled by arbitration.


 


(d)                                 The arbitration will take place in the City
of Ottawa unless otherwise agreed by the parties, and each party may be
represented by counsel at the arbitration.


 


(e)                                  In the event that one party wishes a dispute to
be put to arbitration then such party shall give fifteen (15) days written
notice thereof to the others. If the parties cannot agree upon a single
arbitrator within fifteen (15) days after demand by one of them for
arbitration, then each of (i) CBS, and (ii) Supplier shall select one
arbitrator. The two arbitrators selected shall then choose a third arbitrator
in order that the dispute may be finally resolved by a majority of the panel of
three arbitrators.


 


(f)                                    The parties acknowledge that it would be
advantageous to the resolution of disputes if the arbitrators chosen possess
relevant scientific, technical, legal or medical knowledge, and they will
endeavour to select arbitrators with the requisite expertise. The expense of
the arbitration shall be divided equally among the parties. Any such
arbitration shall be conducted in accordance with the laws of the Province of
Ontario including, but not limited to, the Arbitration
Act (Ontario) and the rules and procedures set forth therein,
from time to time in force and effect. The decision of the arbitrators shall be
final and binding and any of the parties may make application to a court of
competent jurisdiction for the judicial acceptance of the award and an order
for enforcement.


 


(g)                                 The parties hereby agree that prior to the
disclosure of any material in furtherance
of this Section, the parties and the selected arbitrators shall be required to
enter into confidentiality agreements to protect information disclosed during
the arbitration process and the ruling of the arbitrators.


 


38

















 


18                                  OPTION TO RENEW


 


This
Agreement may be extended or renewed by mutual written Agreement of the
parties.


 


18.1                        Renewal


 


(a)                                  The Term may he extended for a one (1) year
term from April 1, 2013 upon mutual agreement as evidenced in writing by
both parties.


 


(b)                                 The Term may he extended for a second one (1) year
term from April 1, 2014 upon mutual agreement as evidenced in writing by
both parties.


 


(c)                                  If either party wishes to extend the Term
under this Section 18.1, a written notice must be sent to the other at
least one hundred and eighty (180) days prior to the end of the Term (or the
extended Term).


 


19                                  CUSTOMER SERVICE


 


During
the Term, the Supplier shall perform the customer service obligations sets
forth in Schedule G.


 


20                                  VALUE ADD


 


During
the Term, Supplier shall provide value add contributions as set  forth
in Schedule H for the benefit of CBS and such other parties listed therein.


 


21                                  GENERAL


 


21.1                        Extended Meanings


 


In
this Agreement, words importing the singular number include the plural and vice
versa.


 


21.2                        Time


 


Time
shall be of the essence.


 


21.3                        Entire Agreement


 


This
Agreement, including the attached Schedules, constitutes the entire Agreement
between and among the parties pertaining to its subject matter and supersedes
all prior and contemporaneous agreements, understandings, negotiations and
discussions, whether oral or written, between and among the parties. There are
no warranties, representations, or other agreements between or among the
parties in connection with its subject matter except as specifically set forth
in this Agreement. No supplement, modification, amendment, or waiver of this
Agreement shall be binding unless executed in writing by all parties.


 


39

















 


21.4        Notices


 


(a)                                  Any notice or demand required or permitted to
be given by one party to the other shall be in writing and shall be:


 


(i)            personally delivered;


(ii)           sent by courier, prepaid; or


(iii)          sent by facsimile.


 


(b)                                 The address of each party for any such notice
shall be as follows:


 


To
CBS:


 


(i)                                     in all cases to:


 


Canadian
Blood Services 

1800 Alta Vista Drive 

Ottawa, ON K1G 4J5 

CANADA


 


	
  Attention:

  	
   

  	
  Executive
  Director, Plasma Products and Services

  
	
  Telephone:

  	
   

  	
  (613)
  739-2327

  
	
  Facsimile:

  	
   

  	
  (613)
  739-2025

  



 


(ii)                                  where the matter relates to regulatory issues
including Quality Assurance, Quality Control or Quality Systems, a copy to:


 


	
  Attention:

  	
   

  	
  Vice-President,
  Quality and Regulatory Affairs

  
	
  Telephone:

  	
   

  	
  (613)
  739-2036

  
	
  Facsimile:

  	
   

  	
  (613)
  739-2505

  



 


(iii)                               where the matter relates to a business or financial issue, a copy to:


 


	
  Attention:

  	
   

  	
  Director,
  Supply Management

  
	
  Telephone:

  	
   

  	
  (613)
  739-2350

  
	
  Facsimile:

  	
   

  	
  (613)
  739-2023

  



 


(iv)                              where the matter relates to an alleged breach by CBS, notice to be
given to:


 


	
  Attention:

  	
   

  	
  Vice-President
  General Counsel and Corporate Secretary

  
	
  Telephone:

  	
   

  	
  (613)
  739-2121

  
	
  Facsimile:

  	
   

  	
  (613)
  739-2099

  



 


40

















 


In
the case of Supplier to:


 


Talecris
Biotherapeutics Inc. 

79 TW Alexander Drive 

Research Triangle Park


North
Carolina 27709


USA


 


	
  Attention:

  	
   

  	
  John
  Gaither, Executive Vice President, General Counsel & Secretary

  
	
  Telephone:

  	
   

  	
  (919)
  316-6147

  
	
  Facsimile:

  	
   

  	
  (253)
  390-6623

  



 


and
to


 


Talecris
Biotherapeutics Ltd. 

5800 Explorer Drive, Suite #300 

Mississauga, ON L4W 5K9 

CANADA


 


	
  Attention:

  	
   

  	
  Mr. Joel
  Abelson

  
	
  Telephone:

  	
   

  	
  (905)
  614-5580

  
	
  Facsimile:

  	
   

  	
  (905)
  614-5590

  



 


with
a copy to:


 


	
  Attention:

  	
   

  	
  Ms
  Janet Thompson Mar

  
	
  Talecris
  Biotherapeutics Ltd.

  
	
  1785
  Alta Vista Drive, Suite 103

  
	
  Ottawa, ON

  	
   

  	
  K1G
  3Y6

  
	
  Telephone:

  	
   

  	
  (613)
  730-3905

  
	
  Facsimile:

  	
   

  	
  (613)
  730-3910

  



 


Any
party may from time to time change its address by written notice to the other
parties given in accordance with the provisions of this Section. Any notice
given by personal delivery or courier shall be deemed to be received on the
date of delivery. Any notice by facsimile shall be deemed to be received when
it is properly sent.


 


(c)           Effectiveness of Notice


 


A
notice is effective only if the party giving or making the notice has complied
with Subsections 21.4 (a) and (b) above and if the addressee has
received the notice. A notice is deemed to have been received as follows:


 


(i)                                     If a notice is delivered in person or by
internationally recognized overnight courier, upon receipt as indicated by the
date on the signed receipt.


 


41














 


	
  (ii)

  	
   

  	
  If a notice is sent by facsimile, upon receipt by the party giving
  the notice of an acknowledgement or transmission report generated by the
  machine from which the facsimile was sent indicating that the facsimile was
  sent its entirety to the addressee’s facsimile number.

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  Despite
  the other clauses of this subsection (c), if a notice received after 5:00 pm
  on a Business Day where the addressee is located, then the Notice is deemed
  received at 9:00 am on the next Business Day where the addressee is located.

  



 


21.5        Assignment


 


Neither
this Agreement nor any of the rights or obligations of any party may be
assigned without the prior written consent of the other parties which consent
shall not unreasonably be withheld provided that such consent will not be
required for assignment to an Affiliate as defined by the Canada Business Corporations Act, R.S.C.,
1985, c. C-44 as amended.


 


21.6        Independent Contractors


 


The
parties are contractors independent of each other and none of them has the
authority to bind any other to any third person or otherwise to act in any way
as the representative of the other unless otherwise expressly agreed to in
writing by the other or required by the provisions of this Agreement. Except as
may be set forth herein, the parties shall not have, and they shall not hold
themselves out as having, any right, power or authority to create any contract
or obligation, either express or implied, on behalf of, in the name of or
binding upon the other. It is understood and agreed that no party, their
respective shareholders, members, directors, officers, employees, agents, and
other legal representatives have, nor are they to be construed to have, any
relationship with the others (whether as an employee, agent, partner or
otherwise) except that of the parties being independent contractors in respect
of the matters which are subject of this Agreement.


 


21.7        Severability


 


If
any provision of this Agreement is determined to be invalid or unenforceable in
whole or in part by a court of competent jurisdiction, such invalidity or
unenforceability shall attach only to such provision and everything else in
this Agreement shall continue in full force and effect.


 


21.8        Communication


 


CBS
may, in its sole discretion, contact Supplier at any time and from time to time
to discuss issues arising in connection with the performance of this Agreement.


 


42

















 


21.9                        Governing Law


 


This
Agreement shall be governed by and construed in accordance with the laws in
force in the province of Ontario and shall be treated in all respects as an
Ontario contract. The parties submit to the jurisdiction of the Courts of
Ontario with respect to any dispute, claim or other matter arising under this
Agreement and the Courts of Ontario shall have exclusive jurisdiction with
respect to any such dispute, claim or other matter subject to the provisions of
Section 17. The parties agree that the United Nations Convention on
contracts for the International Sale of goods shall not apply to this
Agreement.


 


21.10                 Currency


 


All
references to currency arc in US dollars unless otherwise specifically stated.


 


21.11                 Successors and Assigns


 


This
Agreement shall enure to the benefit of and be binding upon the parties and
their respective heirs, executors, administrators, and permitted successors and
assigns.


 


21.12                 No Waiver


 


No
waiver by any party hereto of any breach of any of the provisions of this
Agreement by another shall take effect or be binding upon the party unless
agreed in writing. Unless otherwise provided therein, a waiver shall not limit
or affect the rights of the party granting the waiver with respect to any other
breach.


 


21.13                 Joint and Several Liability


 


Talecris
US and Talecris Canada shall be jointly and severally liable for the
obligations of Supplier set out in this Agreement.


 


21.14                 Remedies Cumulative


 


Except
as otherwise expressly provided in this Agreement, the rights and remedies of
the parties under this Agreement are cumulative and in addition to and not in
substitution for any other rights and remedies available at law or in equity or
otherwise, and no single or partial exercise by a party of any right or remedy
precludes or otherwise affects the exercise of any other right or remedy to
which that party may be entitled.


 


21.15                 Counterparts


 


This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original and all of which together shall constitute the
Agreement.


 


43

















 


21.16      Amendment


 


This
Agreement may not be amended or modified in any way except by the written
consent of the parties hereto.


 


21.17      Confidential Information


 


All
information pertaining to the technology, business and affairs of the other
parties obtained as a result of or in respect of this Agreement shall be kept
and maintained in confidence and will not be disclosed to any other person,
except:


 


	
  (i)

  	
   

  	
  to
  the auditors, legal counsel and professional advisors of the parties hereto
  provided that the professional advisors have signed a confidentiality
  agreement with the disclosing party;

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  if
  such information enters the public domain otherwise than by a breach of this
  Agreement; and

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  if
  disclosure of such information is required by virtue of any present or future
  applicable law, regulation or ruling by a relevant government or governmental
  board, commission, department, bureau or authority to which the relevant
  party hereto is subject.

  



 


21.18      Pricing Information to Customers


 


(a)                                  Supplier agrees that CBS has the right to
provide detailed pricing or cost information to its members, the provincial and
territorial Ministers of Health and their delegates, and to health care
professionals, hospitals and CBS stakeholders.


 


(b)                                 Supplier will consult with CBS prior to
Supplier releasing any pricing or cost information relating to any
Fractionation Products.


 


21.19      Public Announcements


 


No
public announcement or press release relating in any way to this Agreement
shall be made without the prior written consent of the other party and the
joint approval of the contents of such announcement or release except where any
such announcement is required by law, in which case the announcing party will
send by facsimile or e-mail the draft announcement to the others immediately
upon becoming aware of the legal requirement and, in any event, before
releasing such announcement.


 


44

















 


21.20      Force Majeure


 


Except
as otherwise provided in this Agreement, neither party shall be liable to the
other party and no party hereto shall be deemed in default hereunder for any
failure or delay to perform any of its covenants and Agreements caused or
arising out of the following acts (providing the same is not within the control
of the said party): acts of God, strikes, lockouts or other industrial
disputes, acts of the public enemy, riots, fire, storm, flood or explosion. If
a failure or delay is caused by one of the events above-mentioned, all times
provided for in this Agreement shall be extended for a period commensurate with
the period of the delay and, to the extent possible, the said party affected
will take all reasonable steps to remedy the delay caused by the events above-mentioned;
provided; however, that nothing contained in this Section shall require
either party to settle any industrial dispute.


 


 


IN
WITNESS WHEREOF Supplier and CBS have executed this Agreement, each on the date
indicated.


 


	
  CANADIAN
  BLOOD
  SERVICES

  	
   

  	
  TALECRIS
  BIOTHERAPEUTICS INC.

  
	
   

  	
   

  	
   

  
	
  By

  	
        /s/ Ian Mumford

  	
   

  	
  By:

  	
        /s/ Alberto R. Martinez, M.D.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
        Ian Mumford

  	
   

  	
  Name:

  	
        Alberto R. Martinez, M.D.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
        Chief Operating Officer

  	
  2007/12/03

  	
   

  	
  Title

  	
        President

  	
  12/13/07

  



 


 


	
  CANADIAN
  BLOOD
  SERVICES

  	
   

  	
  TALECRIS
  BIOTHERAPEUTICS LTD.

  
	
   

  	
   

  	
   

  
	
  By

  	
        /s/ Pauline Port

  	
   

  	
  By:

  	
        /s/ Alberto R. Martinez, M.D

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
        Pauline Port

  	
   

  	
  Name:

  	
        Alberto R. Martinez, M.D

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
        VP Corporate Services & CFO

  	
  2007/12/07

  	
   

  	
  Title

  	
        President

  	
  12/13/07

  



 


 


	
  CANADIAN
  BLOOD SERVICES

  
	
   

  
	
  By

  	
        /s/ G. Sher

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
        G. Sher

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
        CEO 

  	
  2007/12/10

  	
   

  
	
   

  	
   

  	
   

  	
  APPROVED AS TO

  
	
   

  	
   

  	
   

  	
  LEGAL FORM

  
	
   

  	
   

  	
   

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  	
   

  	
  TALECRIS BIOTHERAPEUTICS

  
	
   

  	
   

  	
   

  	
  LAW DEPT.

  



 


45

















 


SCHEDULE “A” - COMMERCIAL PRODUCTS ANNUAL PURCHASE VOLUMES AND PRICES


 


CBS FIRST YEAR PURCHASE VOLUMES


 


Product
Prices:


 


	
  Product

  	
   

  	
  Unit of Measure

  	
   

  	
  Price per Unit of

  Measure ($US)

  	
   

  
	
  Gamunex®

  	
   

  	
  gram

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  Plasbumin®

  	
   

  	
  25
  gram  eqv.

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  HyperHEPTM B S/D

  	
   

  	
  ml

  	
   

  	
  $

  	
  [***]

  	
   

  
	
  GamaSTAN® S/D

  	
   

  	
  ml

  	
   

  	
  $

  	
  [***]

  	
   

  



 


Notwithstanding
the foregoing, in any contract year, should less than 30,000 ml of HyperHep S/D
be purchased by CBS and HQ, the price for HyperHep S/D shall be $109.06 per ml.


 


The
Price Per Unit of Measure may be adjusted in accordance with Section 9.2
of the Agreement.


 


CBS
First Year Purchase Volumes:


 


	
  Product

  	
   

  	
  Unit of Measure

  	
   

  	
  Projected First Year

  Volume

  	
   

  
	
  Gamunex®

  	
   

  	
  gram

  	
   

  	
  [***]

  	
   

  
	
  Plasbumin®

  	
   

  	
  25 gram eqv.

  	
   

  	
  [***]

  	
   

  
	
  HyperHEPTM B S/D

  	
   

  	
  ml

  	
   

  	
  [***]

  	
   

  
	
  GamaSTAN® S/D

  	
   

  	
  nil

  	
   

  	
  [***]

  	
   

  



 


The
First Year Purchase Volumes in the table above shall be the volumes for the
purpose of Subsection 3.4(a) of this Agreement.


 






***CONFIDENTIAL TREATMENT REQUESTED


 


 


46

















 


SCHEDULE “B” - CURRENT PLASMA PRODUCTION SITES


 


AND PLASMA PICK-UP SCHEDULE


 


	
  Pick-up
  Site

  	
   

  	
  Address

  	
   

  	
  Min Pick up Frequency

  
	
  BC &
  Yukon

  	
   

  	
  4750
  Oak Street 

  Vancouver, BC V6H 2N9

  	
   

  	
  Every Week

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Edmonton

  	
   

  	
  8249-114th
  Street 

  Edmonton AB T6G 2R8

  	
   

  	
  Bi-Weekly

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Calgary

  	
   

  	
  737-13th
  Ave SW  

  Calgary AB T2R 1J1

  	
   

  	
  Bi-Weekly

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Saskatchewan

  	
   

  	
  2571
  Broad Street  

  Regina SK S4P 3B4

  	
   

  	
  Bi-Weekly

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Winnipeg

  	
   

  	
  777
  William Street 

  Winnipeg MB R3E 3R4

  	
   

  	
  Bi-Weekly

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  London

  	
   

  	
  850
  Commissioners Road East 

  London ON N6C 2V5

  	
   

  	
  Bi-Weekly

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hamilton

  	
   

  	
  299
  Main Street East 

  Hamilton ON L8N 1H8

  	
   

  	
  Weekly

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Toronto

  	
   

  	
  67
  College Street 

  Toronto ON M5G 2M1

  	
   

  	
  Weekly

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Thunder
  Bay

  	
   

  	
  1165
  Barton Street  

  Thunder Bay ON P7B 5N3

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ottawa

  	
   

  	
  40
  Concourse Gate 

  Ottawa ON K2E 8A6

  	
   

  	
  Weekly

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New
  Brunswick

  	
   

  	
  405
  University Avenue 

  Saint John NB E2K 1Z2

  	
   

  	
  Every 4 Weeks

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PEI

  	
   

  	
  85
  Fitzroy Street 

  Charlottetown PEI C1A 1R6

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Halifax

  	
   

  	
  1940
  Gottingen Street 

  Halifax NS B3J 3B7

  	
   

  	
  Every 4 Weeks

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Newfoundland &
  Labrador

  	
   

  	
  7
  Wicklow St.  

  St. John’s NL A1B 3Z9

  	
   

  	
  Every 4 Weeks

  



 


	
  Centre Name

  	
   

  	
  Address

  	
   

  	
  Min Pick up Frequency

  
	
  Montreal

  	
   

  	
  4045,
  boulevard Côte-Vertu 

  Saint-Laurent QC H4R 2W7

  	
   

  	
  Once a Week

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sainte-Foy

  	
   

  	
  1009,
  route du Vallon 

  Sainte-Foy QC G1V 5C3

  	
   

  	
  Every 2 Weeks

  



 


47

















 


SCHEDULE “C” - COMMERCIAL PRODUCT SPECIFICATIONS


 


	
  Product

  	
   

  	
  DIN

  	
   

  	
  Specifications

  (Product Monograph Date)

  
	
  Gamunex®

  	
   

  	
  02247724

  	
   

  	
  June 1, 2006

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Plasbumin®
  - 5%

  	
   

  	
  02189100

  	
   

  	
  June 30, 2006

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Plasbumin®
  - 25%

  	
   

  	
  02189119

  	
   

  	
  June 30, 2006

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HyperHEPTM
  B

  	
   

  	
  02230738

  	
   

  	
  June 06, 2006

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GamaSTAN®

  	
   

  	
  02230579

  	
   

  	
  June 06, 2006

  



 


48

















 


SCHEDULE “D” - FRACTIONATION PRODUCTS AND PRICES


 


FOR FRACTIONATION PRODUCTS


 


(Plasma volumes and prices)


 


	
   

  	
   

  	
  [***] – [***]

  [***]

  	
   

  	
  [***] – [***]

  [***]

  	
   

  	
  [***] + [***]

  
	
  IGIVnexTM

  	
   

  	
  $[***]

  	
   

  	
  $[***]

  	
   

  	
  $[***]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Albumin

  	
   

  	
  $[***]

  	
   

  	
  $[***]

  	
   

  	
  $[***]

  



 


The
Price Per Unit of Measure may be adjusted in accordance with Section 9.2
of the Agreement.


 


For
the purposes of this Schedule “D” the volumes shall be determined by the amount
delivered by both CBS and HQ for fractionation in each contract year.


 






***CONFIDENTIAL TREATMENT REQUESTED


 


 


49

















 


SCHEDULE “E” - INVENTORY LEVELS


 


In
this Schedule “Supplier Inventory Level” shall mean the amount of Commercial
Product and Fractionation Products released by Supplier and by Health Canada,
and kept in appropriate storage by Supplier at a site in Canada for the benefit
of CBS. All amounts per week in this Schedule shall be determined by dividing
the annual amount referenced in Section 3.4 of this Agreement by 52 and
multiplied by the number of weeks set out in this Schedule.


 


	
  Product by Vial Size

  	
   

  	
  Target Inventory

  Level

  (weeks)

  	
   

  	
  Supplier Inventory

  Level

  (weeks)

  	
   

  	
  Shortage Level

  (weeks of CBS

  inventory)

  	
   

  
	
  Gamunex® / IGIVnexTM

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Plasbumin® / Albumin

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
  *(1)

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HyperHepTM B S/D

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GamaSTAN® S/D

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  



 






*(1) Note – for year 1. For years 2 to 5 Supplier Inventory level
will be [***] weeks.


 






***CONFIDENTIAL TREATMENT REQUESTED


 


 


50

















 


SCHEDULE “F” - VIAL SIZES SUBSTITUTION / WASTAGE


 


The
parties hereby agree that the following clauses shall govern any Wastage as
that term is described herein.


 


Wastage


 


1.          Wastage occurs when a specific vial size of a
Product is not delivered by Supplier as provided for in the applicable Rolling
Forecast, and the CBS inventory of that vial size falls below five (5) weeks’
coverage, resulting in CBS customer orders for that vial size being filled with
the next available larger vial size (“Substitution”).


 


2.          In the event of wastage, Supplier shall compensate
CBS (“Compensation”). The time period during which Supplier will compensate CBS
(“Compensation Period”) will commence when the CBS inventory falls below five (5) weeks
coverage due to the failure of Supplier to deliver to CBS as provided for in
the applicable Rolling Forecast. The Compensation Period will end when
sufficient Product is delivered to CBS to restore inventory to at least the
five (5) week level.


 


3.          Compensation will be calculated as follows:


 


(a)   The number of vials of Product purchased in
Substitution during the Compensation Period will be estimated by comparing the
weekly demand for the vial size that is unavailable during the Compensation
Period to the average weekly demand for that vial size during the previous
twenty-six (26) weeks. In cases where inconsistent supply may result in the
average weekly demand during the previous twenty-six (26) weeks not being
representative of true demand, the parties will agree on another more
applicable historical demand period;


 


(b)   The average price during the Compensation
Period of the vial size that was being purchased in Substitution will then be
compared to the average price during the Compensation Period of the vial size
that was substituted for, and a price differential will be calculated (the “Price
Differential”); and


 


(c)   The estimated number of vials purchased in
Substitution during the Compensation Period as determined in (a), will be
multiplied by the Price Differential as determinxed in (b) and this will
be the total amount of Compensation owing by Supplier to CBS.


 


4.          Compensation may be in credit or free
Product, as mutually agreed to by CBS and Supplier.


 


5.          This will be the mechanism for determining
Compensation unless otherwise mutually agreed upon in writing by the parties.


 


51














 


SCHEDULE “G” - CUSTOMER SERVICE


 


Without
limiting any of Supplier’s obligations at law, during the term of this
Agreement, Supplier shall:


 


	
  1.

  	
   

  	
  maintain
  tracking procedures, as outlined in Appendix B.2.1 to the Supplier’s
  Proposal;

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  adhere
  to the Pharmaceutical Advertising Advisory Board Code of Advertising
  Acceptance as well as related Health Canada guidelines for advertising
  requirements in Canada;

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  provide
  a Medical Information Service, accessible and toll free, which responds to
  inquiries from CBS and HQ, physicians, nurses, allied health professionals
  and consumers about the Products;

  
	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  employ
  a cross-Canada field team, capable of providing service in both official
  languages, and maintain its established infrastructure including a Regulatory
  and Quality Assurance Team to handle all ongoing customer inquiries for
  scientific and medical information, in addition to Product complaint
  handling, and close each complaint by way of a written customer closure
  communication.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Urgent
  or non-urgent inquiries may be made to Supplier’s medical and scientific
  affairs personnel at their Customer Service number 1-866-482-5226 and
  attempts will be made by the Supplier customer service team to resolve the
  issue;

  
	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  staff
  its Quality Department with trained professionals responsible for the
  management of product complaints as outlined by standard operating procedures
  and Health Canada’s guidelines;

  
	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  maintain
  its role in educational programs for the health care providers and consumers
  in Canada who use the products, maintain and fund the Supplier’s educational
  programs in 2007, and maintain Canadian patient groups in response to the
  educational requests of the Canadian medical community and consumers in
  Canada in accordance with Appendix D2 of the Supplier’s Proposal;

  
	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  implement
  a comprehensive Business Continuity/Disaster Recovery (BC/DR) Program
  including an Influenza Pandemic Preparedness action plan has been developed
  and is in the process of being documented.

  



 


52

















 


SCHEDULE “H” - VALUE
ADD


 


Research
Activities Inside Canada


 


Supplier
shall maintain investments in research activities inside and outside of Canada
and to the extent possible, Supplier shall make available to CBS and HQ
opportunities to participate in joint R & D. Without limiting the
generality of the foregoing, Supplier shall provide two collaborative
initiatives with practical applications for improving healthcare in Canada:


 


	
  1

  	
   

  	
  The
  Talents Program, will support
  investigator-led trials conceived by researchers and clinicians with an
  interest in using IGIV. This peer reviewed and competitive program is fully
  funded and administered by Supplier research grants with annual support
  provided in the amount of $[***] US with scientists from CBS/HQ participating
  as part of the Talents Grant Review Committee. As members of this committee,
  these scientists would be part of a larger team-based approach to better
  understanding global issues in IGIV research, as well as continuing to
  promote research in Canada.

  
	
   

  	
   

  	
   

  
	
  [***]

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Supplier
  shall, in lieu of the Partnership Fund provide an annual unrestricted grant
  of [***], to be shared by CBS and HQ on a pro-rata basis, to be administered
  by HQ and CBS. Such grant shall be payable at the start of each contract
  year.

  



 






***CONFIDENTIAL TREATMENT REQUESTED


 


53

















 


SCHEDULE “H” - VALUE ADD, continued


 


Additional
Value Add


 


[***]


 


Hospital
Data Collection Initiative


 


Supplier
will jointly fund a hospital data collection initiative, to be managed by
Canadian Blood Services, for the purpose of understanding IVIG utilization
trends and patterns in hospitals. Supplier will also fund the development of
IVIG utilization guidelines. Supplier will fund these initiatives proportionate
to their Canadian IVIG market share.


 


Supplier
will jointly fund a hospital data collection initiative, to be managed by CBS,
for the purpose of understanding IVIG utilization trends and patterns in
hospitals. Supplier will also fund the development of IVIG utilization
guidelines. Supplier will fund these initiatives proportionate to their
Canadian IVIG market share.


 


Maintenance of Current Programs


 


[***]


 


Supplier
shall fund clinical/pre-clinical program spending of $[***] CDN in Canada
during the contract term.


 






***CONFIDENTIAL TREATMENT REQUESTED


 


54

















 


SCHEDULE “I” - B-19 TESTING SERVICES


 


In
this Schedule “I”:


 


“Samples”
means the plasma sample which will be collected in a [***] by CBS and will be
tested for parvovirus B19 by Supplier as described in this Schedule “I”.


 


“Elevated
Manufacturing Pool” means a Plasma pool that yields parvovirus B19 viral load
that exceeds [***].


 


Supplier
will perform the B-19 -Testing Services described in this Schedule “I”
at its Facility located in Raleigh, North Carolina (“Supplier Facility”), but
may perform such Services at another location upon written notice to CBS.


 


SAMPLES
AND PLASMA PROCESSING


 


	
  1.

  	
   

  	
  All
  Samples provided to Supplier must meet the specifications and packaging and
  shipping requirements set forth below (“Sample Specifications”).

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Supplier
  has the right to refuse Samples not meeting specifications as set out in CBS
  Standard Operating Procedure (“CBS SOP”) 02106.

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  CBS
  shall ensure that Samples of each Plasma unit to be collected by Supplier
  pursuant to the Fractionation Services Agreement are made available for
  pickup at the CBS Centres and conform to the Sample Specifications.

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Supplier
  shall have no liability or responsibility for delay in the performance of the
  Services or delay in the delivery of Fractionation Products resulting from
  CBS’ failure to provide the Samples in a timely manner.

  
	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  The
  Parties agree that it is desirable that the Samples remain viable for testing
  for a period of fifty six (56) days from freezing. Supplier agrees to
  continue to pursue validation of temperature specifications for Samples, so
  they remain viable for testing for a period of three (3), six (6) and twelve
  (12) months in a frozen state.

  
	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  All
  distribution costs, including without limitation, transportation costs,
  duties, excise, brokerage fees and customs, shall be borne by Supplier,
  provided that Supplier shall not be responsible for any additional costs
  arising from CBS’ failure to meet its obligations under this Supplemental
  Services Agreement in a timely manner and which are not attributable to any
  action or omission of Supplier.

  



 






***CONFIDENTIAL TREATMENT REQUESTED


 


55

















SCHEDULE “I” - B-19
TESTING SERVICES, continued


 


 


	
  6.

  	
   

  	
  In
  the event that CBS materially alters any of its SOPs affecting the collection
  of Samples to be used by Supplier for the performance of the Services during
  the Term of this Agreement, CBS must inform Supplier of the proposed change
  at least sixty (60) days in advance of implementing the change or, if such
  change is imposed by Health Canada within a shorter time frame, then CBS
  shall notify Supplier as soon as reasonably possible. CBS will work with
  Supplier to evaluate the consequences of any such change to the Services.
  Supplier shall submit to CBS the costs associated with the change in CBS’
  SOP, including the cost of investigation such as additional validation work
  or pathogen safety research that may be required. CBS will notify Supplier if
  it accepts such costs.

  



 


LOSS


 


	
  1.

  	
   

  	
  CBS
  shall be responsible for and shall bear all risk of loss or damage to the
  Samples collected while such Samples are in its care, custody and control,
  including but not limited to any loss or damage resulting from the improper
  storage, handling, packing, crating, and/or blocking of the Samples at the
  CBS Centres.

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Supplier
  shall be responsible for and shall bear all risk of loss and damage to the
  Samples as soon as such Samples are picked up by Supplier’s carrier and
  during the period such Samples are in Supplier’s care, custody and control.
  This responsibility includes but is not limited to, any loss or damage
  resulting from the improper storage, handling, loading, blocking and/or
  transportation of the Samples, except as such loss or damage results from
  CBS’ actions or omission. Supplier shall ensure that the Samples are
  appropriately segregated and not intermingled with other samples which are
  being tested by Supplier for parties other than CBS.

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  In
  the event that a minimum of one (1) clamshell holder of Samples is
  missing, where CBS admits that the Samples are missing due to CBS’ act or
  omission, and CBS cannot locate the Samples within ten (10) Business
  Days from the date Supplier notifies CBS of the missing Samples, Supplier
  will use its reasonable efforts to find a solution acceptable to CBS and to
  Supplier to avoid the loss of the corresponding Plasma. If the Samples are
  missing and it can be established that this occurred while Supplier was
  responsible for them, then Supplier shall have ten (10) Business Days to
  attempt to locate them, and failing this, Supplier shall provide Replacement
  Products according to this Agreement.

  



 


56

















SCHEDULE “I” - B-19
TESTING SERVICES, continued


 


	
  4.

  	
   

  	
  Any
  Elevated Manufacturing Pools which are determined to be unsuitable by CBS
  will be destroyed. A root cause analysis on these pools will be performed by
  Supplier and the liability for such destroyed pools shall be as follows:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
   

  	
  if
  the Elevated Manufacturing Pool resulted from Supplier’s action or omission,
  including but not limited to failure to interdict higher litre units, wrong
  units interdicted, misreading results, or system failure, then Supplier shall
  provide Replacement Fractionation Products pursuant to Section 6.12 of
  the Fractionation Services Agreement. The quantity of Replacement
  Fractionation Products from the Plasma rendered unusable shall be calculated
  as follows: the number of litres of Plasma destroyed multiplied by the
  year-to-date average yield from Plasma processed through the chromatography
  process (excluding re-processed lots);

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
   

  	
  if
  the destruction of the Elevated Manufacturing Pool is necessitated because of
  any action or omission by CBS, including but not limited to mislabelling, cross-
  contamination at collection, and Supplier provides sufficient evidence of
  this to CBS’ reasonable satisfaction, then CBS shall bear the loss;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  With
  respect to both (i) and (ii) above, each Party agrees to provide
  the other with its corrective and preventive action report and all related
  information to permit a full review of the findings.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
   

  	
  [***]

  



 


TERM AND TERMINATION


 


CBS
acknowledges that Plasma being processed by Supplier must be B19 tested.
However, CBS reserves the right to terminate the portions of the Agreement
relating to this Schedule on one hundred and eighty (180) days written notice. In the event of such
termination, CBS will assume responsibility for ensuring that B19 testing meets
the requirements of the Plasma Protein Therapeutic Association.


 


LIABILITY OF SUPPLIER


 


The
Parties acknowledge that the Services are required by Supplier so that fractionation
of Plasma may continue pursuant to the Fractionation Services Agreement.
Therefore Supplier shall be liable for any failure in the performance of the Services. The provisions of Section 6.12
of the Fractionation Services Agreement shall govern Supplier obligations in
the event Plasma is rendered unusable due to Supplier’s failure in the
performance of the Services. In such
an event, CBS’ sole legal recourse (in law and equity) and Supplier’s sole
liability shall be limited to Supplier’s replacement of such Fractionation
Products that are not permitted to be released.


 






***CONFIDENTIAL TREATMENT REQUESTED


 


57

















SCHEDULE “I” - B-19
TESTING SERVICES, continued


 


SERVICES


 


For
each unit of Plasma shipped to Supplier, CBS will provide a Sample of processed
whole blood in a PPT Vacutainer Tube. Supplier shall provide parvovirus B19
testing services for all Plasma shipped for fractionation. Testing will be done
according to Supplier’s approved SOPs designed to remove high titre units to
provide a Plasma pool that does not exceed [***] B19 units per mL. Interdiction
of high titred plasma units will be based on the correlation of individual
Sample disposition to plasma unit identifiers. No direct testing of individual
plasma units shall occur.


 


POOLING


 


Supplier
will resolve any high titre mini-pools to the high titre reactive Sample(s).
Pooling will be conducted using the standard algorithm in place at the Supplier
Facility for source plasma samples and in accordance with the Supplier SOPs
provided to CBS.


 


TIMING


 


[***]


 


DATA
MANAGEMENT / RESULTS


 


All
interdicted high litre parvovirus B19 plasma units will be destroyed according
to Supplier plasma destruction procedures that include destruction
documentation, reconciliation and quality review that: will be made available
to CBS. Supplier will bear the costs of the plasma unit destruction. Supplier
will not provide individual test results to CBS.


 


SAMPLES
MANAGEMENT


 


Supplier
shall not use Samples for any purposes other than B19 testing. Samples will be
destroyed by Supplier, at its own cost, according to Supplier’s destruction
procedure that includes destruction documentation, reconciliation and quality
review.


 


SAMPLE
SPECIFICATIONS


 


	
  1.

  	
   

  	
  The
  Sample shall be collected by CBS in a [***].

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Supplier
  will accept Samples of a minimum volume of [***] of centrifuged whole blood.
  However, if the plasma yield is less than a volume of [***] Supplier may not
  be able to test the Sample. This may result in the destruction of the Plasma
  unit.

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  The
  Sample shall be labelled by CBS with a barcode label having the same unique
  numerical identifier as the corresponding plasma unit. The positioning and
  design of the Sample tube label will be handled as set forth in CBS SOP 01101
  Phlebotomy.

  



 






***CONFIDENTIAL TREATMENT REQUESTED


 


58

















SCHEDULE “I” - B-19
TESTING SERVICES, continued


 


	
  4.

  	
   

  	
  The
  Sample shall be centrifuged by CBS [***] in order to separate the plasma from
  the cellular components.

  
	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  The
  Samples shall be handled following the temperature specifications as set
  forth in CBS SOPs 02106 Manage Samples for
  B19 Testing, 05090 Prepare
  Parvovirus B19 Samples for Shipment to Fractionator and 05092 Ship Plasma to Fractionator, and as
  provided to Supplier.

  



 


SHIPPING LOGISTICS:


 


	
  1.

  	
   

  	
  Each
  Plasma unit consigned to Supplier must be accompanied by a Sample for B19
  Testing. Upon discovery of, at minimum, a missing Sample clamshell holder
  during receipt of shipments at Supplier, Supplier will immediately contact
  CBS Director, Plasma Products and Services by telephone and facsimile
  transmission as stated in Subsection 10.0. b) i). CBS will have ten
  (10) Business Days to retrieve any missing Samples and ship, at their
  cost, any missing Samples. Such deviations to be reported back to CBS at the
  quarterly Fractionation meetings.

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  The
  Samples shall be packed in a clamshell holder. Samples shall be packed for
  shipment in  the same quantity aggregates as the plasma units
  (i.e. if a carton of plasma contains 28 plasma units, the corresponding
  Sample clamshell shall contain 28 Samples). Each sample clamshell shall be
  labelled with the same numerical identifier as the corresponding plasma case.
  CBS shall supply the Sample clamshell holder material.

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Sample
  clamshells (up to 24) shall be packed into sample boxes. The sample box shall
  be labelled, the content and position which arc described in CBS SOP 05090 Prepare Parvovirus B19 Samples for Shipment to
  Fractionator. Supplier shall provide the sample boxes.

  
	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Plasma
  units and Samples shall be stored and pre-conditioned at -20°C or colder when
  consigned for pick up by Supplier as set forth in CBS SOP 05092 Ship Plasma to Fractionator.

  
	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Samples
  for each Vendor Batch (Lot Number) will be shipped on the same
  stretch-wrapped pallet as the Plasma cases, packed in a separate carton on
  the top tier of cases and clearly identified as a Sample container.

  
	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  The
  shipping documents that will accompany each Vendor Batch (CBS Lot Number) are
  listed in CBS SOP 05092 Ship Plasma to
  Fractionator.

  
	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  If
  there is an issue with a Vendor Batch (CBS Lot Number) leading to the
  quarantine of the affected Vendor Batch for investigational or other purpose,
  only the affected Vendor Batch shall be affected (i.e. testing of other
  Vendor Batches remaining in the truck will not be delayed).

  



 






***CONFIDENTIAL TREATMENT REQUESTED


 


59

















SCHEDULE “I” - B-19
TESTING SERVICES, continued


 


FEES


 


	
  1.

  	
   

  	
  Supplier
  may invoice CBS for the fees as set out in this Schedule below

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  On
  April 1 of each year during the Term of this Supplemental Services
  Agreement, Supplier may, in its sole discretion, increase the fees for the
  Services up to the maximum of CPI over the previous calendar year.

  



 


All
invoices shall be submitted in duplicate to CBS at the address first set out
above to the attention of the Accounts Payable Department and each invoice
shall:


 


	
   

  	
   

  	
  (a)

  	
   

  	
  reference
  the applicable Purchase Order if any and Agreement Number;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  set
  out the details of the Services that are the subject of the invoice:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  ·

  	
   

  	
  Talecris
  Canada will invoice CBS 1/12th of the annual estimated cost based
  on the forecasted total number of Samples (base from litres forecast) in a
  contract year.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  ·

  	
   

  	
  Talecris
  Canada will report the total number of Samples tested by the Supplier
  Facility on each monthly invoice. On a quarterly basis, Supplier will prepare
  a report outlining the reasons for a Sample not tested or removed (low
  volume, high titre, etc.) for the quarterly meetings.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  ·

  	
   

  	
  On
  a quarterly basis, a reconciliation of total actual Samples and the forecast
  volume will be completed with the difference either credited or debited
  through Supplier’s invoicing process.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)

  	
   

  	
  set
  out the GST owing as a separate line item;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (d)

  	
   

  	
  set
  out Supplier’s GST registration number; and

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (e)

  	
   

  	
  set
  out the PST (if applicable) owing as a separate line item.

  



 


On
April 1 of each year during the Term of this Agreement Supplier may, in
its sole discretion, increase the fees for the Services up to the maximum of
CPI over the previous calendar year.


 


VOLUME
OF SAMPLES ADJUSTMENTS


 


A
year-end reconciliation, to be conducted within thirty (30) days of the
contract year-end, to determine the number of Samples processed versus
forecast, will form the basis for any necessary correction in either direction
(if the annual volume of Samples falls into a lower category, the cost per
Sample will be retroactively increased, if into a higher category, the cost per
Sample will be retroactively decreased). If the result of the annual
calculation determines that Supplier owes CBS, payment will be in IVIG and
Albumin product at Net 30 days. If CBS owes Supplier, payment terms will be Net
30 days.


 


The
total fee for the Testing Services shall be [***] per sample.


 






***CONFIDENTIAL TREATMENT REQUESTED


 


60