Document:

Exhibit 10.30.1

 

REF: C2007-034

 

	
   

  	
  FRACTIONATION
  SERVICES

  AND

  COMMERCIAL PRODUCTS

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AGREEMENT

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

  
	
   

  	
   

  
	
   

  	
  BETWEEN
  AND AMONGST

  
	
   

  	
   

  
	
   

  	
  HÉMA-QUÉBEC

  
	
   

  	
   

  
	
   

  	
  AND

  
	
   

  	
   

  
	
   

  	
  TALECRIS
  BIOTHERAPEUTICS LTD.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AND

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TALECRIS
  BIOTHERAPEUTICS INC.

  	
   

  

 

 

 

TABLE
OF CONTENTS

 

	
  1.

  	
  DEFINED
  TERMS AND INTERPRETATION

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  DEFINITIONS

  	
  2

  
	
  1.2

  	
  SCHEDULES

  	
  4

  
	
  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

  	
  5

  
	
   

  	
   

  	
   

  
	
  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 AND PRICES ADJUSTMENTS

  	
  6

  
	
  3.5

  	
  DELIVERY

  	
  7

  
	
  3.6

  	
  LATE DELIVERIES

  	
  7

  
	
  3.7

  	
  VIAL SIZE AND PRODUCT INVENTORY

  	
  8

  
	
  3.8

  	
  COMMERCIAL PRODUCT RECALLED, WITHDRAWN OR NOT VALIDLY DISTRIBUTED

  	
  8

  
	
  3.9

  	
  PROCEDURES AND REMEDIES IN THE EVENT OF ALTERNATE SOURCING

  	
  8

  
	
  3.10

  	
  MINIMUM SUPPLY GUARANTEE TO FURTHER PROTECT CANADIANS

  	
  9

  
	
   

  	
   

  	
   

  
	
  4.

  	
  PRODUCT
  SPECIFICATIONS

  	
  10

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  PRODUCT SPECIFICATIONS

  	
  10

  
	
  4.2

  	
  SUPPLIER DETERMINES PRODUCTS ARE UNSUITABLE

  	
  10

  
	
  4.3

  	
  HQ DETERMINES PRODUCTS ARE UNSUITABLE

  	
  10

  
	
  4.4

  	
  SIGNIFICANT REDUCTION IN CONSUMER PREFERENCE

  	
  11

  
	
   

  	
   

  	
   

  
	
  5.

  	
  B19
  TESTING

  	
  12

  
	
   

  	
   

  	
   

  
	
  6.

  	
  ISBT
  128 COMPLIANCE

  	
  12

  
	
   

  	
   

  	
   

  
	
  7.

  	
  FRACTIONATION
  SERVICES

  	
  12

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  FORECASTING

  	
  12

  
	
  7.2

  	
  ORDER FOR FRACTIONATION PRODUCTS

  	
  12

  
	
  7.3

  	
  FORECASTING CONTINUED TO
  TERMINATION DATE

  	
  13

  
	
  7.4

  	
  SURVIVAL OF
  ORDERS AFTER TERMINATION

  	
  13

  
	
   

  	
   

  	
   

  
	
  8.

  	
  PLASMA
  COLLECTION AND PROCESSING

  	
  13

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  PLASMA COLLECTION

  	
  13

  
	
  8.2

  	
  RESPONSIBILITY FOR PLASMA IN HQ’s POSSESSION

  	
  13

  
	
  8.3

  	
  NOTICE OF PLASMA PICKUP BY SUPPLIER

  	
  13

  
	
  8.4

  	
  PICKUP, TRANSPORTATION AND STORAGE OF PLASMA BY SUPPLIER

  	
  13

  
	
  8.5

  	
  PLASMA SEGREGATION

  	
  14

  
	
  8.6

  	
  SUPPLIER RESPONSIBLE FOR
  EXPORTATION OF PLASMA

  	
  14

  
	
  8.7

  	
  SHIPPING DOCUMENTS AND EXPORTATION OF PLASMA

  	
  14

  
	
  8.8

  	
  RESPONSIBILITY FOR
  PLASMA IN SUPPLIER’S
  POSSESSION

  	
  14

  
	
  8.9

  	
  SUPPLIER TO
  INSPECT PLASMA

  	
  15

  
	
  8.10

  	
  HQ DETERMINES PLASMA DELIVERED TO
  SUPPLIER IS UNSUITABLE

  	
  15

  
	
  8.11

  	
  RIGHT OF
  SUPPLIER TO REJECT HQ PLASMA

  	
  15

  
	
  8.12

  	
  PLASMA RENDERED UNUSABLE BY SUPPLIER

  	
  15

  
	
  8.13

  	
  REGULAR MEETINGS

  	
  16

  
	
  8.14

  	
  KEY PERFORMANCE INDICATORS

  	
  16

  
	
  8.15

  	
  CHANGE TO
  HQ STANDARD OPERATING
  PROCEDURES

  	
  17

  
	
   

  	
   

  	
   

  
	
  9.

  	
  DELIVERY
  OF FRACTIONATION PRODUCTS AND RECORDS

  	
  17

  

 

i

 

	
  9.1

  	
  DELIVERY SCHEDULE AND REPORT ON STATUS OF FRACTIONATION PRODUCT
  DELIVERY

  	
  17

  
	
  9.2

  	
  WORK IN PROCESS

  	
  17

  
	
  9.3

  	
  NOTICE OF DELAY IN DELIVERY OF FRACTIONATION PRODUCTS

  	
  17

  
	
  9.4

  	
  DELAY IN DELIVERY OF FRACTIONATION PRODUCTS DUE
  TO HQ

  	
  18

  
	
  9.5

  	
  RECORDS

  	
  18

  
	
   

  	
   

  	
   

  
	
  10.

  	
  DELIVERY OF PRODUCT

  	
  18

  
	
   

  	
   

  	
   

  
	
  10.1

  	
  PRODUCT SHELF LIFE

  	
  18

  
	
  10.2

  	
  DELIVERY OF PRODUCTS

  	
  19

  
	
  10.3

  	
  RESPONSIBILITY FOR PRODUCTS

  	
  19

  
	
  10.4

  	
  DUTY OF INSPECTION

  	
  20

  
	
   

  	
   

  	
   

  
	
  11.

  	
  PRICES, PAYMENTS TERMS AND INVOICES

  	
  20

  
	
   

  	
   

  	
   

  
	
  11.1

  	
  PRICE

  	
  20

  
	
  11.2

  	
  PRICE ADJUSTMENTS

  	
  20

  
	
  11.3

  	
  PAYMENT TERMS

  	
  21

  
	
  11.4

  	
  INVOICES

  	
  22

  
	
  11.5

  	
  PRICING NOT AFFECTED BY REMEDIES

  	
  22

  
	
   

  	
   

  	
   

  
	
  12.

  	
  REGULATORY AND QUALITY ASSURANCE MATTERS

  	
  22

  
	
   

  	
   

  	
   

  
	
  12.1

  	
  REGULATORY CONDITION OF SUPPLY

  	
  22

  
	
  12.2

  	
  IMPROVEMENTS

  	
  22

  
	
  12.3

  	
  SPECIAL ACCESS PROGRAMME

  	
  23

  
	
  12.4

  	
  COMMUNICATIONS

  	
  23

  
	
  12.5

  	
  SUPPLIER INFORMATION

  	
  24

  
	
  12.6

  	
  COMPLIANCE AUDIT

  	
  24

  
	
   

  	
   

  	
   

  
	
  13.

  	
  PRODUCT WITHDRAWALS/RECALLS

  	
  24

  
	
   

  	
   

  	
   

  
	
  13.1

  	
  RECALL / WITHDRAWAL

  	
  24

  
	
  13.2

  	
  PATIENT NOTIFICATION SYSTEM

  	
  25

  
	
  13.3

  	
  ADVERSE EVENT REPORTING

  	
  25

  
	
  13.4

  	
  REPLACEMENT PRODUCTS AND REPLACEMENT FRACTIONATION
  PRODUCTS

  	
  26

  
	
   

  	
   

  	
   

  
	
  14.

  	
  REPRESENTATIONS, WARRANTIES AND INSPECTION

  	
  26

  
	
   

  	
   

  	
   

  
	
  14.1

  	
  REPRESENTATIONS AND WARRANTIES OF THE PARTIES

  	
  26

  
	
  14.2

  	
  REPRESENTATIONS AND WARRANTIES ON THE PRODUCTS

  	
  27

  
	
  14.3

  	
  TITLE AND WARRANTY ON THE PRODUCTS

  	
  27

  
	
  14.4

  	
  GUARANTEED YIELD

  	
  27

  
	
  14.5

  	
  CURRENT INFORMATION

  	
  28

  
	
  14.6

  	
  NO WAIVER

  	
  28

  
	
  14.7

  	
  SURVIVAL OF REPRESENTATIONS AND WARRANTIES

  	
  28

  
	
   

  	
   

  	
   

  
	
  15.

  	
  PATENT PROTECTION

  	
  28

  
	
   

  	
   

  	
   

  
	
  15.1

  	
  NO INFRINGEMENT

  	
  28

  
	
  15.2

  	
  INFRINGEMENT BY A PRODUCT OR PROCESS

  	
  28

  
	
   

  	
   

  	
   

  
	
  16.

  	
  INSURANCE AND INDEMNIFICATION

  	
  29

  
	
   

  	
   

  	
   

  
	
  16.1

  	
  SUPPLIER’S INSURANCE

  	
  29

  
	
  16.2

  	
  HQ INSURANCE

  	
  29

  
	
  16.3

  	
  INDEMNITY

  	
  30

  
	
  16.4

  	
  APPROVAL OF COUNSEL

  	
  31

  
	
   

  	
   

  	
   

  
	
  17.

  	
  CHANGE

  	
  31

  
	
   

  	
   

  	
   

  
	
  17.1

  	
  TECHNOLOGICAL CHANGE

  	
  31

  
	
  17.2

  	
  DISPUTE RESOLUTION

  	
  32

  
	
   

  	
   

  	
   

  
	
  18.

  	
  TERMINATION

  	
  33

  

 

ii

 

	
  18.1

  	
  TERMINATION OF AGREEMENT

  	
  33

  
	
  18.2

  	
  SUPPLIER EVENT OF DEFAULT

  	
  33

  
	
  18.3

  	
  HQ EVENT OF DEFAULT

  	
  34

  
	
   

  	
   

  	
   

  
	
  19.

  	
  DISPUTE
  RESOLUTION

  	
  34

  
	
   

  	
   

  	
   

  
	
  19.1

  	
  ARBITRATION

  	
  34

  
	
   

  	
   

  	
   

  
	
  20.

  	
  OPTION
  TO RENEW

  	
  35

  
	
   

  	
   

  	
   

  
	
  20.1

  	
  RENEWAL

  	
  35

  
	
   

  	
   

  	
   

  
	
  21.

  	
  CUSTOMER
  SERVICE

  	
  36

  
	
   

  	
   

  	
   

  
	
  22.

  	
  VALUE
  ADDED

  	
  36

  
	
   

  	
   

  	
   

  
	
  23.

  	
  GENERAL

  	
  36

  
	
   

  	
   

  	
   

  
	
  23.1

  	
  EXTENDED MEANINGS

  	
  36

  
	
  23.2

  	
  TIME

  	
  36

  
	
  23.3

  	
  ENTIRE AGREEMENT

  	
  36

  
	
  23.4

  	
  NOTICES

  	
  36

  
	
  23.5

  	
  ASSIGNMENT

  	
  38

  
	
  23.6

  	
  INDEPENDENT CONTRACTORS

  	
  38

  
	
  23.7

  	
  SEVERABILITY

  	
  38

  
	
  23.8

  	
  COMMUNICATION

  	
  38

  
	
  23.9

  	
  GOVERNING LAW

  	
  38

  
	
  23.10

  	
  CURRENCY

  	
  39

  
	
  23.11

  	
  SUCCESSORS AND ASSIGNS

  	
  39

  
	
  23.12

  	
  NO WAIVER

  	
  39

  
	
  23.13

  	
  JOINT AND SEVERAL LIABILITY

  	
  39

  
	
  23.14

  	
  REMEDIES CUMULATIVE

  	
  39

  
	
  23.15

  	
  COUNTERPARTS

  	
  39

  
	
  23.16

  	
  AMENDMENT

  	
  39

  
	
  23.17

  	
  CONFIDENTIAL INFORMATION

  	
  39

  
	
  23.18

  	
  PRICING INFORMATION TO CUSTOMERS

  	
  40

  
	
  23.19

  	
  PUBLIC ANNOUNCEMENTS

  	
  40

  
	
  23.20

  	
  FORCE MAJEURE

  	
  40

  

 

	
  SCHEDULE
  “A” – COMMERCIAL PRODUCTS

  	
  42

  
	
   

  	
   

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

  	
  43

  
	
   

  	
   

  
	
  SCHEDULE
  “C” – PRODUCT SPECIFICATIONS

  	
  44

  
	
   

  	
   

  
	
  SCHEDULE
  “D” – FRACTIONATION PRODUCTS AND PRICE FOR FRACTIONATION PRODUCTS

  	
  45

  
	
   

  	
   

  
	
  SCHEDULE
  “E” – INVENTORY LEVELS

  	
  46

  
	
   

  	
   

  
	
  SCHEDULE
  “F” – VIAL SIZES SUBSTITUTION / WASTAGE

  	
  47

  
	
   

  	
   

  
	
  SCHEDULE
  “G”– CUSTOMER SERVICE

  	
  48

  
	
   

  	
   

  
	
  SCHEDULE
  “H” – VALUE ADDED

  	
  49

  
	
   

  	
   

  
	
  SCHEDULE
  “I” – B19 TESTING SERVICES

  	
  51

  
	
   

  	
   

  
	
  SCHEDULE
  “J” – KEY PERFORMANCE INDICATORS PROGRAM

  	
  56

  

 

iii

 

REF: C2007-034

 

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:

  	
   

  
	
   

  	
   

  
	
   

  	
  HÉMA-QUÉBEC

  
	
   

  	
  4045 Côte-Vertu
  Blvd.

  
	
   

  	
  Saint-Laurent
  (Québec) H4R 2W7

  
	
   

  	
  CANADA

  
	
   

  	
   

  
	
   

  	
  (hereinafter
  referred to as “HQ”)

  
	
   

  	
   

  
	
  AND:

  	
   

  
	
   

  	
   

  
	
   

  	
  TALECRIS BIOTHERAPEUTICS LTD.

  
	
   

  	
  5800
  Explorer Drive, Suite 300

  
	
   

  	
  Mississauga
  (Ontario) L4W 5K9

  
	
   

  	
  CANADA

  
	
   

  	
   

  
	
   

  	
  (hereinafter
  referred to as “TALECRIS CANADA”)

  
	
   

  	
   

  
	
  AND:

  	
   

  
	
   

  	
   

  
	
   

  	
  TALECRIS BIOTHERAPEUTICS INC.

  
	
   

  	
  P.O. Box
  11526

  
	
   

  	
  79 TW
  Alexander Drive

  
	
   

  	
  Research
  Triangle Park (North Carolina) 27709

  
	
   

  	
  USA

  
	
   

  	
   

  
	
   

  	
  (hereinafter
  referred to as “TALECRIS US”)

  
	
   

  	
   

  
	
   

  	
  (TALECRIS US
  and TALECRIS CANADA are hereinafter collectively referred to as the
  “Supplier”)

  

 

WHEREAS:

 

1)    HQ and CBS solicited proposals
from various interested parties to provide contract fractionation services and
various plasma derived products as more particularly set out in requests for
proposal “RFP #177-2006” issued January 12, 2007 and “RFP #181-2007”
issued April 16, 2007;

 

1

 

2)    Supplier submitted proposals
to both HQ and CBS to supply contract fractionation services and commercial
products as more fully set out in the proposals dated February 5, 2007 and
May 14, 2007 ;

 

3)    Supplier submitted a separate
offer in response to HQ request for proposal entitled “AO 2006-027” for the
provision of rabies immune globulin product as more fully set out in its
proposal dated December 7, 2006; and

 

4)    Supplier wishes to sell to HQ
and HQ wishes to purchase from Supplier contract fractionation services
(hereinafter Fractionation Services) and various plasma derived commercial
products (hereinafter Commercial Products), subject to the terms and conditions
hereinafter contained; and

 

5)    The Parties wishe to
incorporate into the Agreement the provision for testing parvovirus B19 Samples
by the Supplier.

 

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:

 

(a)           “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;

 

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

 

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

 

(d)           “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;

 

(e)           “CBS” means Canadian
Blood Services;

 

(f)            “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;

 

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

 

(h)           “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;

 

2

 

(i)            “Effective Date” means
April 1, 2008;

 

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

 

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

 

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

 

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

 

(n)           “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;

 

(o)           “HQ Process” shall have
the meaning given to it in Section 11.2(d)(i);

 

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

 

(q)           “Inventory System”
means the supply management system used by HQ for inventory management of
Products;

 

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

 

(s)           “Plasma” means
Recovered Plasma and Source Plasma collected in Canada;

 

(t)            “Plasma and
Fractionation Products Rolling Forecast” shall have the meaning given to it in Section 7.1;

 

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

 

(v)           “Products” means
collectively Fractionation Products, Commercial Products and Replacement
Fractionation Products;

 

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

 

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

 

(y)           “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;

 

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

 

(aa)         “Replacement Fractionation
Products” means products required by HQ pursuant to Sections 8.12, 9.3 and 9.4
and a Replacement Fractionation Product means any one of them;

 

(bb)        “Replacement Product”
means products required by HQ pursuant to any of Sections 3.6, 3.8, 3.9, 13.4
and 17.1;

 

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

 

3

 

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

 

(ee)         “Shortage” means that the
total inventory of any Product, determined by combining the sum of issuable and
not subject to a quarantine, Recall or Withdrawal, of Fractionation Products
and/or Commercial Products in the Inventory System and in the Supplier
inventory dedicated to HQ has fallen below the level indicated in Schedule “E”;

 

(ff)          “Source Plasma” means
Plasma collected by apheresis;

 

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

 

(hh)        “Target Levels” means the
target inventory for Fractionation Products and Commercial Products (in weeks)
as set out in Schedule “E” and any changes thereto as agreed in writing by the
Parties;

 

(ii)           “Term” means:

 

For all the Fractionation Products and Commercial Products except
HyperRABMC S/D:

 

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.

 

For HyperRABMC S/D:

 

That period of time commencing on June 1, 2007 and ending at the
earlier of:

 

(i)  March 31, 2011; or

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

 

Term also includes any extension or renewal of this Agreement as
evidenced in writing and signed by the Parties;

 

(jj)           “US”, “USA” and “United
States” refers to United States of America;

 

(kk)         “Warehouse” means HQ’s
primary warehouse at 4300 rue Garand, Saint-Laurent, (Québec), Canada, H4R 2A3,
or such other warehouse as may be designated in writing by HQ to Supplier and
consented to by Supplier, which consent will not unreasonably be withheld; and,

 

(ll)           “Withdrawal” means any
action ordered by Supplier or by HQ, 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.

 

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, First
Year Purchase Volumes and Annual Purchase Volumes and Prices;

 

4

 

	
  Schedule “B”

  	
  –

  	
  Plasma Production Sites and Plasma Pick-up Schedule;

  
	
  Schedule “C”

  	
  –

  	
  Commercial Product Specifications;

  
	
  Schedule “D”

  	
  –

  	
  Fractionation Products and Price Adjustments for Fractionation
  Products - Volume of Plasma Delivered;

  
	
  Schedule “E”

  	
  –

  	
  Inventory Levels;

  
	
  Schedule “F”

  	
  –

  	
  Vial Size Substitution / Wastage;

  
	
  Schedule “G”

  	
  –

  	
  Customer Service;

  
	
  Schedule “H”

  	
  –

  	
  Value Added;

  
	
  Schedule “I”

  	
  –

  	
  B19 Testing Services;

  
	
  Schedule “J”

  	
  –

  	
  Key performance indicators program

  

 

 

1.3          Lead

 

The Parties acknowledge that Supplier has entered into an agreement
similar in form and substance with CBS, for the supply and distribution of
Products. Supplier acknowledges that HQ and CBS 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 HQ and CBS;

 

(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 Product to be produced from the pool, including but not limited
to, vial size, and labelling; and

 

(iv)          disposition of Plasma Intermediates.

 

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

 

HQ shall purchase or obtain from Supplier on a non-exclusive basis and
Supplier shall sell or provide to HQ, 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” beginning on April 1, 2008 and on
the Effective Date for HyperRABMC S/D. In connection with the Fractionation
Services, Supplier will, unless otherwise permitted by the provisions of this
Agreement, use Plasma provided to it by HQ.

 

2.2          Distribution of Products
in Canada

 

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

 

5

 

(b)           HQ further agrees to
notify Supplier in writing as soon as reasonably possible if it suspects that
any of the Products are being obtained from HQ 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

 

HQ 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

 

(a)           Except for HyperRABMC S/D, HQ shall provide to Supplier, for each
Rolling Forecast provided by HQ, the Product volumes identified in the first [***] months
will be considered a binding obligation of HQ to purchase and the Supplier to
deliver the Products identified within the forecast period. The volume by vial
size of such Product is then fixed for the first [***] months of each such
forecast (the “Binding Forecast”). Should HQ 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 (1) additional month.

 

(b)           For HyperRABMC S/D, the Product volumes provided in the first
[***] months will be considered a binding obligation of HQ to purchase and
the Supplier to deliver the Products identified within the forecast period.
Should HQ fail to provide a Rolling Forecast in any month, the last Rolling
Forecast provided will stand with the [***] month window for product
volume continuing for one (1) additional month.

 

(c)           In each Binding
Forecast, HQ shall indicate the quantities to be delivered to HQ by Supplier in
each weekly delivery.

 

3.4          Annual Volume and Prices
Adjustments

 

(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”,
unless otherwise agreed to in writing by the Parties.

 

(b)           As of the second year
of the Agreement and for each subsequent Agreement year, HQ shall provide to
Supplier, the annual volume of Commercial Products that HQ will purchase in the
following year by [***] of the preceding year.

 

(c)           For Gamunex®, Plasbumin® HyperHEPMC B S/D, HyperTETMC S/D and GamaSTANMC S/D, HQ agrees to purchase, and Supplier
agrees to deliver, a volume for Commercial Product that is:

 

***CONFIDENTIAL TREATMENT REQUESTED

 

 

6

 

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

 

·        For
the subsequent years of the Agreement, between [***] and [***] of the previous
year purchase volume, unless otherwise agreed to in writing by both parties.

 

(d)           For HyperRABMC, HQ agrees to purchase and
Supplier agree to supply a minimum of [***] vials of 2mL HyperRABMC S/D
per annum for the Agreement Term. In addition, Supplier agrees to guarantee the
supply of an additional [***] vials of 2 mL HyperRABMC S/D in any or all years of the Agreement at
the prevailing Agreement price if requested in writing by HQ at least six (6) months
prior to the requested delivery date.

 

(e)           For each Commercial Product,
the unit price invoiced to HQ by the Supplier during the Agreement year will be
determined by the projected combined HQ and CBS purchase volume identified in
Schedule “A” for the 1st year or, for the subsequent years, the volume
communicated to the Supplier by [***] of
the preceding Agreement year.

 

(f)            In the event that
actual combined HQ and CBS purchases in any Agreement 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 HQ shall be adjusted to reflect
the unit price tier applicable to the actual volume purchased by HQ and CBS as
shown in Schedule “A”. Any such adjustments, shall be credited by the Supplier
within thirty (30) days after the anniversary date of the Agreement, or
reimbursed by the Supplier for the last Agreement Year.

 

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

 

3.5          Delivery

 

Supplier shall deliver on a weekly basis or such other frequency as may
be agreed upon from time to time the Commercial Products to HQ as set out in
this Agreement and at the times and in the quantities set out in the Binding
Forecast. In the event that HQ’s delivery requirements change during the Term
other than as required by the Binding Forecast, HQ shall notify Supplier in
writing of the revised requirements. Supplier shall use its reasonable best
efforts to satisfy the revised requirements of HQ HQ 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 HQ 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 HQ
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 HQ inventory having less than [***] weeks
supply of a Product or HQ is expected to have less than [***] weeks supply
of a Product in HQ inventory at the time of Supplier’s next anticipated
shipment, HQ shall notify the Supplier in writing and the Supplier shall have
five (5) Business Days from receipt of such notice to make

 

***CONFIDENTIAL TREATMENT REQUESTED

 

 

7

 

arrangements reasonably satisfactory to HQ to ensure delivery of
sufficient quantities of such Product, or of a substitute therapeutic for such
Product acceptable to HQ (“Replacement Product”), are delivered to HQ 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, HQ 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 HQ in
identifying an alternate source from which HQ can obtain Replacement Products.

 

(b)           To the extent that the
late delivery is the result of HQ requiring Products over and above the Binding
Forecast, then the provisions set out in Section 3.9 shall not apply.

 

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 HQ and held in its own
inventory, Supplier shall keep in inventory in Canada for the exclusive use of
HQ the inventory level indicated in Schedule “E” available for immediate
distribution to HQ and shall provide HQ 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 subsections 3.6(a) and 3.7, one (1) week
of inventory shall be 1/52nd of the volume set out in the annual
volumes as described in subsections 3.3 and 3.4 hereof. The quantity will be
adjusted on each Agreement anniversary date.

 

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 HQ; 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 HQ;

 

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

 

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 HQ within two (2) Business Days, or such
longer time period if agreed to by HQ 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 HQ, HQ will so

 

8

 

advise Supplier and the supply of the Replacement Product shall be
governed by the terms of this Agreement.

 

(b)           If HQ, acting
reasonably, rejects the Proposal or if no Proposal is offered within the
stipulated or agreed time frame, HQ may proceed to locate Replacement Products
from a third party selected by HQ. The quantity of Replacement Product
purchased by HQ pursuant to this paragraph shall be obtained solely for the
purpose of averting any Shortage. Supplier acknowledges that HQ 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 HQ and consent of Supplier to the purchase is required
if reimbursement is to be sought by HQ. Supplier shall respond to HQ 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 be deemed to have consented. Consent of Supplier will not be
unreasonably withheld.

 

(c)           A notice sent by
facsimile pursuant to the Sections 3.6, 3.8, 3.9 shall be followed with a
confirmatory discussion with a representative of the Supplier.

 

(d)           If Replacement Product
is purchased by HQ 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 HQ for the amount, if any, that the
price HQ 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. Such amounts shall be due and payable, in
cash or in credit at the option of Supplier within fifteen (15) days of
delivery by HQ of an invoice for such amounts. Compensation by Supplier of HQ
pursuant to this paragraph shall be the limit of Supplier’s liability
hereunder.

 

(e)           In the event the price
of a Replacement Product for HyperHEP BMC S/D purchased
from an alternate supplier is higher than the Agreement price, Supplier will
compensate HQ the difference in price up to a maximum of [***] of the projected
sales per Agreement year for HyperHEP BMC S/D, as outlined
in Schedule A.

 

(f)            For HyperRabMC S/D, Supplier will make commercially
reasonable efforts to guarantee the supply of 2 mL vial size HyperRABMC S/D in the appropropriate quantity however, if
HyperRABMC S/D cannot be supplied, Supplier will work
with HQ to identify an acceptable alternate supplier. In the event the price of
a Replacement Product for HyperRABMC S/D
purchased from an alternate supplier is higher than the Agreement price,
Supplier will pay a purchase cost differential not to exceed [***] for the
entire Term for HyperRABMC S/D. The [***] limit will not apply in the
event Supplier fails to supply the agreed upon quantities as a result of
willful misconduct.

 

(g)           Nothing in this Section 3.9
shall limit the right of HQ to terminate this Agreement pursuant to Section 18
should the occurrence of an event as described in Section 3.8 constitute a
material breach of this Agreement.

 

3.10        Minimum Supply Guarantee
to Further Protect Canadians

 

Supplier will supply to HQ and CBS as follows:

 

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

 

***CONFIDENTIAL TREATMENT REQUESTED

 

9

 

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

 

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

 

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

 

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

 

4.1          Product Specifications

 

Supplier shall provide to HQ Products in accordance with the
Specifications, as set out in Schedule C, as amended from time to time by
Supplier.

 

4.2          Supplier Determines
Products are Unsuitable

 

If, after any Products have been delivered to HQ, Supplier determines
in its reasonable discretion that any 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 Products, Supplier
shall give immediate notice by telephone and facsimile transmission to HQ of
any such deficiency. In the event that Supplier, acting reasonably, notifies HQ
that Supplier is Recalling or Withdrawing any Products, or is taking any other
action to remedy any deficiencies in the Products, and requests that HQ
co-operate in any such Recall or Withdrawal, or take action to remedy any
deficiency in the Products (which request shall not be made unreasonably), HQ
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 Products. The costs of such Withdrawal, Recall or other action, including
the cost of repairing or replacing any Products, shall be paid by Supplier.

 

4.3          HQ Determines Products
are Unsuitable

 

(a)           If HQ determines, in
its reasonable discretion, that any Product is 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 Product, HQ shall immediately
notify Supplier, by telephone and facsimile transmission, of such deficiency.
In the event that HQ, acting

 

***CONFIDENTIAL TREATMENT REQUESTED

 

10

 

reasonably, notifies Supplier, that it is proceeding with the
Withdrawal or quarantine of any Product, or is taking any other action to
remedy any deficiencies in the Product, Supplier shall reasonably co-operate in
any such action as is required by HQ to remedy any deficiency. The costs of
such action, including the cost of repairing or replacing any Products, shall
be paid by HQ if it is the party to whom causation is attributable or by
Supplier is the party to whom causation is attributable. For greater certainty,
HQ is not required to notify Supplier of any defect or possible defect caused
by HQ while the Product is in HQ’s 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 HQ
has caused the Withdrawal or quarantine of a Product pursuant to Subsection
4.3(a), and it is subsequently determined that the Product did or does not
create a reasonable likelihood of adverse risk to the safety or quality of the
Product, as determined by Health Canada, HQ will be required to:

 

(i)           return
the 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 HQ 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. HQ shall be required to notify Supplier
as soon as possible in writing in the event that HQ 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 Products
orders and evidence that the total market for that type of product has not
declined in a similar manner. HQ 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
Consumers to another manufacturer’s product that is functionally equivalent to,
but significantly technologically and/or scientifically superior to the
Commercial Product, then HQ shall exercise the recourse set out in Section 17.1.

 

(b)           Following written
notice that HQ 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 HQ shall
be adjusted to reflect the loss of demand for the specific Commercial Product
and the pricing shall be adjusted according to Schedule “A”.

 

11

 

(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 without penalty from the annual volume of
Commercial Products forecast by HQ without any increase in price.

 

5.           B19 TESTING

 

The Supplier shall provide testing services for parvovirus B19.
Specific guidelines applicable to this testing are contained in Schedule “I”.

 

6.           ISBT 128 COMPLIANCE

 

The Supplier convenants to develop systems and procedures to receive
and process Plasma and B19 tubes which have been labeled with ISBT 128
barcodes. The implementation of the systems and procedures shall be done no
later than July 1, 2009.

 

The prices charged for the Products and Services are deemed to include
the implementation by the Supplier of the ISBT 128 standards.

 

7.           FRACTIONATION SERVICES

 

7.1          Forecasting

 

By August 1 of each Agreement year, HQ shall provide Supplier with
a twenty-four (24) month rolling forecast of the projected monthly supply of
Plasma available to the Supplier for fractionation (“Plasma Volume Forecast”).
The Plasma Volume Forecast shall be updated by HQ and provided to the 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, HQ and CBS shall collectively deliver
to Supplier not less than [***] litres of Plasma per year for fractionation.

 

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

 

7.2          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 HQ 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 HQ
and Supplier. This [***] month portion of the Plasma and Fractionation
Products Rolling Forecast shall include specific ordering instructions for vial
sizes as well as quantities of Fractionation Products.

 

***CONFIDENTIAL TREATMENT REQUESTED

 

 

12

 

7.3                               Forecasting
Continued to Termination Date

 

The
Parties hereto agree that HQ will continue to submit a Fractionation Products
Rolling Forecast to Supplier on a monthly basis until this Agreement is
terminated unless Supplier and HQ 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.

 

7.4                               Survival of
Orders after Termination

 

Any
Plasma picked up by Supplier from HQ 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
HQ pursuant to this Agreement, and the rights and obligations of the Parties
hereto shall survive termination of the Agreement.

 

8.                                      PLASMA COLLECTION AND PROCESSING

 

8.1                               Plasma
Collection

 

HQ
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.

 

8.2                               Responsibility
for Plasma in HQ’s Possession

 

HQ
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, transportation of the Plasma at the Production Sites,
except as otherwise provided in this Agreement.

 

8.3                               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 HQ 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 HQ, 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.

 

8.4                               Pickup,
Transportation and Storage of Plasma by Supplier

 

Supplier
agrees to provide HQ with appropriate shipping containers, at no cost to HQ, to
be utilized for the storage and transportation of the frozen Plasma. Supplier
shall be required at its own expense to

 

13

 

pick
up the Plasma from the Production Sites and arrange for storage if required.
Supplier reserves the right to select, in reasonable consultation with HQ, an
alternate carrier or storage facility at any time.

 

8.5                               Plasma
Segregation

 

HQ
further acknowledges and agrees that should any Plasma be held by HQ for
transport to a fractionator other than Supplier, HQ 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.

 

8.6                               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.

 

8.7                               Shipping
Documents and Exportation of Plasma

 

Prior
to each Plasma shipment from the storage facility, Supplier will receive from
HQ;

 

(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.

 

8.8                               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 are appropriately segregated and not intermingled
with other raw materials or Fractionation Products when in its care and
control.

 

14

 

8.9                               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.

 

8.10                        HQ
Determines Plasma Delivered to Supplier is Unsuitable

 

If,
after any Plasma has been picked up by Supplier, HQ 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, HQ shall immediately notify Supplier by telephone and facsimile
transmission and shall provide instructions for disposition of the Plasma. All
rejected Plasma or Plasma Intermediates shall be held at the expense and risk
of HQ until HQ 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.

 

8.11                        Right of
Supplier to Reject HQ 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 HQ, with notice of any such deficiency to be provided to
Supplier pursuant to Section 8.10, or

(ii)                                do not meet the
standards set out in Section 8.1, 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
Fractionation Products.

 

(b)                                 Supplier shall immediately
notify HQ by telephone and facsimile transmission of any such rejection by
Supplier. HQ 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 HQ with HQ’s consent, except in the case of rejected Plasma or Plasma
Intermediates which are the responsibility of Supplier as provided for in Section 8.12.
All rejected Plasma or Plasma Intermediates shall be held at the expense and
risk of HQ until HQ 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.

 

8.12                        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 HQ at the same cost as HQ

 

15

 

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 HQ may
begin the procedures set out in Subsections 3.9(b) and (d).

 

8.13                        Regular
Meetings

 

The
Parties will, with CBS, 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 (Fractionation Meeting). 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 HQ, CBS and Supplier agree. HQ or Supplier may call a special
meeting by giving written notice to the other party or parties and CBS. 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
HQ 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.

 

HQ
shall hold independently monthly meetings with the Supplier for the purpose of
discussing, assessing and resolving issues related to or which may arise during
the execution of the Agreement. Meeting agendas will be prepared ahead of the
scheduled meeting date by HQ after consultation with the Supplier. Unless
otherwise agreed by both parties, the venue for the meetings shall be in
Montréal and the parties shall identify ahead of the scheduled meeting date,
and will endeavour to have for such meetings the relevant staff for the issues
on hand. Each party shall be responsible for its respective travel and living
expenses, when applicable.

 

8.14                        Key
performance indicators

 

The
performance of the Supplier will be monitored by HQ based on four (4) indicators:
delivery performance, product conformance, contract-partnership and customer
service. The main objective of the program is to optimize the results to ensure
maximum efficiency of the management of the Products. The objective of the
program, as set out in Schedule “J” is for the Supplier to achieve an overall
global performance of [***]. However, the Supplier is required to maintain a
minimum performance rating of [***] for deliveries, and of [***] for Supplier
Inventory Level. Failure to meet the minimum performance rating of [***] for
deliveries, and [***] for Supplier Inventory Level shall constitute a material
breach of the Supplier under the Agreement. Notwithstanding the foregoing,
Supplier’s failure to achieve an overall performance of [***], shall not
constitute a breach of this Agreement by the Supplier.

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

16

 

8.15                        Change to
HQ Standard Operating Procedures

 

(a)                                 In the event
that HQ 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, HQ 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 HQ will notify Supplier as soon as reasonably
possible. HQ will work with
Supplier to evaluate the consequences of any such change on the Services.

 

(b)                                Within sixty
(60) days of receipt of plan from HQ regarding implementing a change, Supplier
shall submit to HQ 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. it
deems such costs reasonable and agrees to pay such costs.

 

9.                                      DELIVERY OF FRACTIONATION PRODUCTS AND RECORDS

 

9.1                               Delivery
Schedule and Report on Status of Fractionation Product Delivery

 

Supplier
shall deliver Fractionation Products in accordance with the Fractionation
Products Rolling Forecast and Supplier shall be required to provide written
updates to HQ by the 10th business day of each month, which shall
include delivery status plans, split reconciliation report and a confirmation
that the Fractionation Products to be delivered for the upcoming two (2) month
period (“Projected Delivery”).

 

9.2                               Work in
Process

 

(a)                                  The amount of Work in
Process Inventory (as defined in Section 9.2 (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 HQ and CBS in the previous eight (8) months
unless the excess volume is caused directly or indirectly by HQ or CBS.  Supplier shall not be responsible for
disruption in processing caused by insufficient Plasma available for pickup
from HQ and CBS.

 

(b)                                 Work in Process Inventory
includes all Plasma provided by HQ and CBS 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 HQ and CBS in the possession of Supplier. Work in Process Inventory does not
include Plasma collected by HQ and CBS held in Canada awaiting pick up by
Supplier unless delay in processing is due to Supplier’s failure to pick up
Plasma.

 

9.3                               Notice of
Delay in Delivery of Fractionation Products

 

(a)                                  Except as provided for in Section 9.4,
should it become apparent prior to a projected delivery date that a delivery of
Fractionation Products cannot be made as scheduled in the four (4) month
forecast, Supplier shall promptly (but not later than forty-eight (48) hours
after Supplier becomes aware of the delay) notify HQ of such delay and provide
HQ with an estimate, by telephone and facsimile transmission, of when
Fractionation Product will be

 

17

 

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 HQ 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, HQ may
begin the procedures set out in Subsections 3.9 (b) and (d).

 

(c)                                  Supplier shall reimburse HQ
for any reasonable out-of-pocket expenses incurred by HQ in connection with any
delay described in Section 9.3 (a) above, including, without
limitation, expenses relating to required communications with Consumers,
hospitals and clinics.

 

9.4                               Delay in
Delivery of Fractionation Products due to HQ

 

Any
delay in the delivery of Fractionation Products resulting from the failure of
HQ or CBS to make the Plasma available to Supplier in accordance with the
Plasma and Fractionation Products Rolling Forecast shall be the responsibility
of HQ and 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 and conditions 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.

 

9.5                               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
HQ upon reasonable request.

 

10.                               DELIVERY OF PRODUCT

 

10.1                        Product
Shelf Life

 

Supplier
shall ensure that all Products shipped to HQ pursuant to this Agreement shall
have a remaining minimum shelf life of twelve (12) months from the date of
receipt by HQ. 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 HQ the Product with Supplier’s agreement to take back any unused
Product remaining in HQ’s inventory at the time of outdating. Where the only
Product available has less than six (6) months remaining shelf life,
Supplier and HQ must agree to the shortened shelf life in writing and Supplier
agrees to take back any unused Product remaining in HQ’s inventory at the time
of outdating, all at Supplier’s cost. All costs incurred for Products returned
by HQ under this Section shall be either credited by the Supplier or if
the contract has been terminated or has ended, a check shall be sent no later
than thirty (30) days from the date of such claim submitted in writing by HQ.

 

18

 

10.2                        Delivery of
Products

 

(a)                                  Supplier will provide to HQ
documentation satisfactory to HQ to establish that the Products received by HQ
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.

 

(c)                                  When Products are available
for shipment to HQ, a shipment notification shall be sent by Supplier, by
facsimile or email to HQ at least 24 hours prior to shipment 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
coordinate 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 HQ changes the
location of its Warehouse during the Term:

 

(i)                                     where there are additional
costs associated with the change of location, HQ 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, HQ 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 HQ, deliver
Products to destinations other than the Warehouse. Any additional costs
resulting from such change in delivery shall be the responsibility of HQ;
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.

 

10.3                        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 HQ, 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.

 

19

 

10.4                        Duty of
Inspection

 

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

 

(b)                                 HQ 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, HQ
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.

 

11.                               PRICES, PAYMENTS TERMS AND INVOICES 

 

11.1                        Price

 

The
prices for Commercial Products to be charged to HQ 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 HQ 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”.

 

11.2                        Price
Adjustments

 

(a)                                  Annual

 

(i)                                    Prices for all
Products may increase at the start of each Agreement year commencing April 1,
2009 by up to the maximum of the average increase in CPI over the previous
calendar year. Supplier shall notify HQ in writing within forty-five (45) days
of the start of each Agreement year of the proposed price change otherwise it
shall be deemed that the current agreement year prices will remain in effect
for an additional year.

 

(ii)                                 Notwithstanding
the foregoing, if the average wholesale prices in the US of any Product in
Agreement year 3 is less expensive compared to the prices paid by HQ in the
same Agreement year 3, then the price for such Product payable under this Agreement
in years 4 shall be [***]. Supplier shall notify HQ in writing within
forty-five (45) days of the start of the fourth Agreement year by providing
justification for the proposed price reduction.

 

(iii)                              Price for the
product HyperRABMC S/D may increase commencing January 1,
2008 by up to the maximum of the average increase in CPI over the previous
calendar year. Supplier shall notify HQ in writing of the proposed price
change. In addition, prices for HyperRABMC S/D may
increase annually at the start of the second Agreement year commencing April 1,
2009 by up to the maximum of the average increase in CPI over the previous
calendar yar. Supplier shall notify HQ in writing within forty-five (45) days
of the start of each Agreement year of the proposed price change otherwise it
shall be deemed that the current agreement year prices will remain in effect
for an additional year.

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

 

20

 

(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 HQ
with notice in accordance with Section 12.2 and shall substantiate the
proposed price increase. Supplier and HQ shall negotiate in good faith the
amount and timing of any proposed price increase to HQ. If HQ provides final
notice to Supplier in 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 HQ may elect to accept the increase or
terminate the Agreement with respect to the Product immediately without cost or
penalty.

 

(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 HQ, Supplier shall notify HQ by April 1
of the prior year. Supplier shall substantiate the price increase and Supplier
and HQ shall negotiate in good faith the amount and timing of any proposed
price increase to HQ which, for greater clarity, will not be implemented prior
to April 1 of the following year. If HQ does not agree to accept the price
from Supplier, and Supplier does not withdraw the proposed price increase, then
HQ has the right to terminate the Agreement with respect to the Commercial
Product, immediately upon notice to the Supplier, without any cost or penalty.

 

(d)                                 Supplier
Initiated Improvements – Fractionation Products

 

With
respect to an Improvement initiated by Supplier for a Fractionation Product,
Supplier shall notify HQ in accordance with Section 12.2, and;

 

(i)                                    If this
Improvement will increase the price of the Fractionation Product to HQ, or will
require HQ to make a change to its collection, processing, storage or shipping
of Plasma (“HQ Process”), HQ and Supplier shall negotiate in good faith the
amount and timing of the proposed price increase to HQ. If HQ does not agree to
accept a price increase, or is unwilling or unable to make the required change
to HQ 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 HQ agrees to pay the price
increase retroactively to the date of implementation. If HQ 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 HQ
Process, Supplier may implement such Improvement on notice by Supplier to HQ.

 

11.3                        Payment
Terms

 

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

 

21

 

11.4                        Invoices

 

Supplier
shall include a packing slip with all deliveries of Products. Supplier shall
deliver to HQ 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.

 

11.5                        Pricing Not
Affected by Remedies

 

Notwithstanding
anything to the contrary in this Agreement, in the event that HQ 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 HQ
by Supplier under this Agreement, the annual volume for that Product may be
reduced by such amount at the discretion of HQ but the pricing for that Product
shall remain at the level determined by Schedule “A” as if the annual volume
were not so reduced.

 

12.                               REGULATORY AND QUALITY ASSURANCE MATTERS

 

12.1                        Regulatory
Condition of Supply

 

Supplier
shall obtain and submit a copy of the Notice of Compliance (“NOC”) issued by
Health Canada to HQ 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 HQ on the progress
in satisfying the conditions, and shall issue a letter to health care providers
not less than one (1) time per year describing the original conditions and
the progress in satisfying the conditions. This letter shall be distributed to
hospitals by HQ.

 

12.2                        Improvements

 

(a)                                  Supplier
Initiated Improvements for all Products

 

(i)                                    In the event
that Supplier makes or plans to make an Improvement, Supplier shall advise HQ
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 Fractionation
Meetings.

 

(ii)                                 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.

 

(b)                                 Supplier
Initiated Improvements – Commercial Products

 

(i)                                    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

 

22

 

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 HQ.

 

(c)                                  Supplier
Initiated Improvements – Fractionation Products

 

(i)                                    In the event
that the Improvement will require HQ to change its process for plasma
collection, Supplier shall provide HQ 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.

 

(ii)                                 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 HQ within
five (5) Business Days of receipt of notice by Supplier of such required
change.

 

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

 

12.3                        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 HQ for release pursuant to SAP (“SAP
Commercial Product”) whenever HQ notifies the Supplier in writing that the SAP
Commercial Product needs to be provided.

 

(b)                                 Notwithstanding Subsection
12.3(a), if an equivalent licensed product produced by any other manufacturer
is available on the market, HQ could move to such licensed product, Supplier
shall reimburse HQ for any inventory of SAP product(s) upon return of such
SAP product. In this event, HQ 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 HQ 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 HQ. If the SAP Commercial Product is converted into a licensed
Commercial Product by Health Canada and may validly be distributed, then HQ
will not be entitled to the replacement of said inventory.

 

12.4                        Communications

 

Supplier
shall promptly advise HQ and provide HQ with electronic and hard copies of the
following documents 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 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;

 

23

 

(ii)                                Notices of
Compliance;

 

(iii)                             Printed
components including cartons, labels and package insert with explanation with
changes thereto;

 

(iv)                            Product
Monographs approved by Health Canada;

 

(v)                               Health Canada
Exit Notices and Supplier’s Responses;

 

(vi)                            FDA 483’s and
Supplier’s Responses;

 

(vii)                         Recall/Withdrawal
information and correspondence;

 

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

 

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

 

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

 

12.5                        Supplier
Information

 

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

 

12.6                        Compliance
Audit

 

HQ
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 HQ shall be responsible for its own
costs and the audit 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.

 

13.                               PRODUCT WITHDRAWALS/RECALLS

 

13.1                        Recall /
Withdrawal

 

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

 

24

 

(b)                                 Supplier must provide
supporting information or documentation to HQ 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 HQ if the causation is attributable to HQ or by Supplier
if the causation is attributable to Supplier.

 

(d)                                 Subject to Subsection
13.1(g), 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 HQ.

 

(e)                                  Any notification to be given
to HQ relative to a product recall/withdrawal must be faxed to the attention of
the Director, Fractionation Products. The document must include the relevant
product name, lot number(s) and a brief explanation of the reason
justifying the recall/withdrawal. A statement confirming whether or not the
targeted lot was distributed to HQ and/or within Canada must also be included.

 

(f)                                    The transmission of a facsimile
must be preceded by a telephone call to the fractionation products department
(24 hours/ 7 days) Support Telephone line at (514) 832-5000 extension 6926, in
order to inform HQ of the incoming facsimile in connection with a product
recall/withdrawal.

 

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

 

(h)                                 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 HQ.

 

13.2                        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 HQ.

 

13.3                        Adverse
Event Reporting

 

In
accordance with Health Canada regulations, HQ 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 final written reports on
the investigation within sixty (60) days of receipt of HQ’s written
notification.

 

25

 

13.4                        Replacement
Products and Replacement Fractionation Products

 

Any
Replacement Products or Replacement Fractionation Products proposed by Supplier
under Sections 3.6, 3.8, 3.9, 8.12, 9.3 and 9.4 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.

 

14.                               REPRESENTATIONS, WARRANTIES AND INSPECTION

 

14.1                        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 HQ 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.

 

26

 

(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.

 

14.2                        Representations
and Warranties on the Products

 

14.2.1                Supplier represents and warrants to HQ 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;

 

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

 

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

 

14.3                        Title and
Warranty on the Products

 

Supplier
hereby warrants title in and to the Commercial Products.

 

14.4                        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 annual g/litre IGIV yield from Recovered Plasma and buffy coat plasma
shall be the average yield of the first [***] IGIV lots (excluding
reprocessed lots) adjusted to [***] of the actual effective average yield of
these lots.

 

(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 HQ pays for Fractionation Products or Commercial Products.

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

27

 

14.5        Current
Information

 

Supplier represents and warrants that the information currently
provided to HQ 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.

 

14.6        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 HQ or any third party, except as
expressly provided for herein.

 

14.7        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 enure to the
benefit of the Parties notwithstanding the termination or expiration of this
Agreement.

 

15.         PATENT
PROTECTION 

 

15.1        No
Infringement

 

Supplier hereby represents and warrants to the best of its knowledge to
HQ 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.

 

15.2        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 HQ or creates liability for HQ, Supplier
shall, in addition to the indemnity provided in Section 16.3, in respect
to each infringing Product or process:

 

	
  (i)

  	
   

  	
  substitute the Product with fully equivalent non-infringing product;

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

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

  

 

 

28

 

16.    INSURANCE
AND INDEMNIFICATION 

 

16.1      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 ten
million dollars ($10,000,000) per annum in the aggregate.

 

(a)                    Supplier shall provide HQ with
proof of valid insurance coverage for Supplier. A certificate of insurance
issued by the insurer shall be acceptable to HQ 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 Section 16.1, is in effect;

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  that HQ has been added to the certificate as an additional named
  insured with respect to the general liability insurance referred to in
  Section 16.1;

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  a cross-liability clause is in existence;

  
	
   

  	
   

  	
   

  
	
  (iv)

  	
   

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

  
	
   

  	
   

  	
   

  
	
  (v)

  	
   

  	
  a waiver of subrogation in favour of HQ.

  

 

(c)                    Supplier
shall provide HQ 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 HQ 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.

 

(e)                    Supplier warrants to HQ 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 HQ, involving Supplier, HQ shall
forthwith provide notice to Supplier and vice versa.

 

16.2        HQ
Insurance

 

HQ 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)                        HQ 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.

 

29

 

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

 

(i)         that
the required insurance policies are valid and the coverage specified in
Section 16.2, 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 Section 16.2;

 

(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)                        HQ 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 HQ 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 HQ 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 HQ at its own expense.

 

(e)                        HQ warrants to Supplier that HQ
has not done or will not do anything which would cause the stipulated insurance
policy or policies carried by HQ 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 HQ, Supplier shall
forthwith provide notice to HQ and vice versa.

 

16.3        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)                       HQ 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:

 

30

 

 

(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 HQ 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 HQ or,

(ii)                        the material breach by HQ of
any of the terms or conditions of this Agreement; or,

(iii)                     any unauthorized or false warranty
made by HQ.

 

(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.

 

16.4        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.

 

17.         CHANGE

 

17.1        Technological
Change

 

(a)                        If HQ 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 are obsolete;

 

31

 

HQ 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 HQ, either agreeing
or disagreeing with such belief and shall provide reasoning and documentation
for its position.

 

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

 

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

 

(b)                       If HQ 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 HQ Plasma
pursuant to this Agreement; or

(ii)                        the Fractionation Products are
obsolete;

 

HQ 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 HQ, either agreeing
or disagreeing with such belief and shall provide reasoning and documentation
for its position.

 

If Supplier agrees with HQ, HQ may immediately proceed to contract with
alternative source(s) for the purchase of fractionation services. If an
alternative source of service is obtained by HQ the portion of the Agreement
relating to Fractionation Services or particular Fractionation Products shall
be terminated, subject to Section 7.4.

 

If Supplier fails to respond to HQ within fifteen (15) days, then HQ
shall have the right to cancel the Agreement with respect to the Services,
subject to Section 7.4.

 

17.2        Dispute
Resolution

 

(a)                        For the purposes of
Section 17.1 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 HQ and Supplier shall attempt, by bona fide negotiations to resolve their differences, within a reasonable
period not to exceed thirty (30) days from HQ’s receipt of Supplier’s notice.

 

In the event that HQ and Supplier cannot resolve a dispute under this
Section within the thirty (30) day period, the matter shall be referred to
arbitration by Supplier pursuant to the provisions of Section 19.

 

32

 

(b)                       If, after the thirty (30) day period
set out in (a) such dispute remains unresolved, HQ 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
favour, HQ 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 HQ
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 HQ pays for Product that HQ failed to purchase because of HQ’s
decision to purchase products or services from a third party.

 

18.         TERMINATION

 

18.1        Termination
of Agreement

 

HQ 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 18.2
or 18.3 as applicable) occurs (other than, in the case of HQ, 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 party 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.

 

18.2        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 HQ, 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 HQ;

 

(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

 

33

 

(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 18.2(a) and (b) above, take effect thirty (30) days after notice
being given by HQ to Supplier, specifying the default or branch, during which
time Supplier shall be entitled to cure the noted default.

 

18.3        HQ
Event of Default

 

A “HQ Event of Default” shall mean:

 

(a)                        any misrepresentation herein
contained resulting in a material adverse effect on Supplier or any material
breach by HQ 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 HQ;

 

(c)                        the making of a general
assignment by HQ 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 HQ;

 

(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
HQ or any filing by or against HQ 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 HQ which petition is not dismissed, vacated,
set aside or stayed within forty-five (45) days; or

 

(g)                       HQ, or its successor, ceases to
coordinate or loses the authority to distribute the Products in the province of
Québec.

 

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

 

19.         DISPUTE
RESOLUTION 

 

19.1        Arbitration

 

(a)                        The Parties agree that in the
event of any dispute or claim between HQ and Supplier arising under or in
connection with this Agreement, or any order issued pursuant to this Agreement
other than described in Section 17.2, 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.

 

34

 

(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) HQ, 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.

 

20.          OPTION
TO RENEW

 

20.1        Renewal

 

(a)                        For all the Fractionation
Products and Commercial Products excluding for HyperRABMC S/D

 

	
  (i)

  	
   

  	
  The Term be extended for a first one (1) year term from April 1,
  2013 upon written consent of Supplier and HQ.

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  The Term may be extended for a second one (1) year term from
  April 1, 2014 upon
  written consent of Supplier and HQ.

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  A written notice must be sent at least one hundred and eighty (180)
  days prior to the end of the Term or the extended Term by the party
  requesting the extension of the Term to the other party.

  

 

(b)                       For HyperRABMC S/D

 

(i)                           The Supplier hereby grants
to HQ an irrevocable option to extend, at its own discretion, the Term of the
Agreement for an additional period of one (1) year. The option shall be
exercised by HQ by giving the Supplier at least a six (6) month written
notice prior to the expiry of the initial term of the Agreement. In the event
the option is exercised by

 

35

 

HQ, the terms and conditions of this Agreement shall remain unchanged,
except for prices which may be adjusted in accordance with the provisions of
Section 11.2.

 

21.         CUSTOMER
SERVICE

 

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

 

22.         VALUE
ADDED

 

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

 

23.         GENERAL

 

23.1        Extended
Meanings

 

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

 

23.2        Time

 

Time shall be of the essence. 

 

23.3        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.

 

23.4        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;

(iii)                     sent by facsimile; or

(iv)                    sent by electronic mail.

 

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

 

	
  To HQ:

  	
   

  	
  HÉMA-QUÉBEC

  
	
   

  	
   

  	
  4045 Côte-Vertu Blvd.

  
	
   

  	
   

  	
  Saint-Laurent (Québec) H4R 2W7 

  CANADA

  

 

36

 

(i)                           Operational issues and
regulatory issues including Quality Assurance matters, Product
recall/withdrawal document or correspondance:

 

	
  Attention:

  	
  Director of Fractionation products

  
	
  Telephone:

  	
  (514) 832-5000 ext. 319

  
	
  Facsimile:

  	
  (514) 832-0267

  
	
  e-mail:

  	
  jean.lapierre@hema-quebec.qc.ca

  

 

(ii)                        Contractual matters including
formal notice to be given pursuant to the Agreement:

 

	
  Attention:

  	
  Director of Purchasing & Warehousing

  
	
  Telephone:

  	
  (514) 832-5000 ext. 379

  
	
  Facsimile:

  	
  (514) 832-1027

  
	
  e-mail

  	
  jean-francois.deschenes@hema-quebec.qc.ca

  

 

In the case of Supplier to:

 

TALECRIS BIOTHERAPEUTICS LTD. 

5800 Explorer Drive, Suite 300

Mississauga (Ontario) L4W 5K9

CANADA

 

(i)                           In all cases to:

 

	
  Attention:

  	
  Mr. Joel Abelson

  
	
  Vice President,  Canadian and
  Intercontinental Commercial Operations

  
	
  Telephone: 

  	
  (905) 614-5580

  
	
  Fax:

  	
  (905) 614-5590

  
	
  e-mail:

  	
  joel.abelson@talecris.com

  

 

	
  and to

  	
  Attention:

  	
  Ms. Janet Thompson Mar

  
	
   

  	
  Director, Contract Operations

  
	
   

  	
  Telephone:

  	
  (613) 730-3905

  
	
   

  	
  Fax:

  	
  (613) 730-3910

  
	
   

  	
  e-mail:

  	
  janet.thompson-mar@talecris.com

  

 

(ii)                        And to:

 

TALECRIS BIOTHERAPEUTICS INC. 

P.O. Box 11526

79 TW Alexander Drive

Research Triangle Park (North Carolina) 27709

USA

 

	
  Attention:

  	
  Alberto R. Martinez, M.D.

  
	
   

  	
  President

  
	
  Telephone:

  	
  (919) 316-6543

  
	
  Fax:

  	
  (919) 316-6669

  
	
  e-mail:

  	
  alberto.martinez@talecris.com

  

 

37

 

Any party may from time to time change its address by written notice to
the other party 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.

 

23.5      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.

 

23.6      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.

 

23.7      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.

 

23.8      Communication

 

HQ 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.

 

23.9      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 19. The parties agree that the United Nations
Convention on contracts for the International Sale of goods shall not apply to
this Agreement.

 

38

 

23.10      Currency

 

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

 

23.11      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.

 

23.12      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.

 

23.13      Joint
and Several Liability

 

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

 

23.14      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.

 

23.15      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.

 

23.16      Amendment

 

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

 

23.17      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,

 

39

 

(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, such disclosure will be made after the disclosing party has
consulted with the other party and has taken reasonable measures to protec the
confidential information.

 

23.18    Pricing
Information to Customers

 

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

 

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

 

23.19    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 parties
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 the draft announcement to the others immediately
upon becoming aware of the legal requirement and, in any event, before
releasing such announcement.

 

23.20    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.

 

40

 

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

 

 

	
  HÉMA-QUÉBEC

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  BY:

  	
  /s/ Francine Decary

  	
   

  
	
   

  	
   

  
	
  NAME: Dr. Francine Décary

  	
   

  
	
   

  	
   

  
	
  TITLE:President and Chief Executive Officer

  	
   

  
	
   

  	
   

  
	
  DATE:

  	
   

  	
   

  
	
   

  	
   

  
	
  AND

  	
   

  
	
   

  	
   

  
	
  TALECRIS BIOTHERAPEUTICS INC.

  	
  APPROVED AS TO

  
	
   

  	
  LEGAL FORM

  
	
  BY:

  	
  /s/ Alberto R. Martinez

  	
  /s/ [ILLEGIBLE] 120607

  
	
   

  	
  TALECRIS BIOTHERAPEUTICS

  
	
  NAME: Alberto R. Martinez, M.D.

  	
  LAW DEPT.

  
	
   

  	
   

  
	
  TITLE: President

  	
   

  
	
   

  	
   

  
	
  DATE:

  	
  12/07/07

  	
   

  
	
   

  	
   

  
	
  AND

  	
   

  
	
   

  	
   

  
	
  TALECRIS BIOTHERAPEUTICS LTD.

  	
   

  
	
   

  	
   

  
	
  BY:

  	
  /s/ Alberto R. Martinez

  	
   

  
	
   

  	
   

  
	
  NAME: Alberto R. Martinez, M.D.

  	
   

  
	
   

  	
   

  
	
  TITLE: President

  	
   

  
	
   

  	
   

  
	
  DATE:

  	
  12/07/07

  	
   

  
							

 

41

 

SCHEDULE “A” – COMMERCIAL PRODUCTS

 

HQ
First Year Purchase Volumes and Combined HQ/CBS Annual Purchase Volumes and
Prices 

 

HQ
First Year Purchase Volumes and Prices :

 

	
  Product

  	
   

  	
  Formats

  	
   

  	
  Unit of

  Measure

  	
   

  	
  HQ First
  Year

  Volume

  	
   

  	
  Price
  per Unit of

  Measure ($US)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GamaSTANMC S/D

  	
   

  	
  2
  mL

  	
   

  	
  mL

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Gamunex® 10%

  	
   

  	
  25
  mL

  50 mL

  100 mL

  200 mL

  	
   

  	
  gram

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HyperRABMC S/D

  	
   

  	
  2
  mL

  	
   

  	
  mL

  	
   

  	
  [***]

  	
   

  	
  [***]

  (2006-2007 price)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HyperTETMC S/D

  	
   

  	
  250
  U

  	
   

  	
  pce

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Plasbumin® - 5%

  	
   

  	
  50
  mL

  250 mL

  	
   

  	
  25
  gram eqv.

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Plasbumin® - 25%

  	
   

  	
  50
  mL

  100 mL

  	
   

  	
  25
  gram eqv.

  	
   

  	
  [***]

  	
   

  	
  [***]

  

 

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

 

Combined
HQ/CBS First Year Purchase Volumes and Prices :

 

	
  Product

  	
   

  	
  Formats

  	
   

  	
  Unit of

  Measure

  	
   

  	
  HQ

  First

  Year

  Volume

  	
   

  	
  CBS

  First

  Year

  Volume

  	
   

  	
  Combined

  First Year

  Volume

  (HQ and

  CBS)

  	
   

  	
  Combined

  Annual

  Volume

  (HQ and

  CBS)

  	
   

  	
  Price per

  Unit of

  Measure

  ($US)

  
	
  HyperHEP
  BMC S/D

  	
   

  	
  0.5 mL

  5 mL

  	
   

  	
  mL

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***] – [***]

  >[***]

  	
   

  	
  [***]

  [***]

  

 

The Price per Unit of Measure may be adjusted in accordance with
Section 11.2 of the Agreement.

 

***CONFIDENTIAL TREATMENT REQUESTED

 

 

42

 

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

SCHEDULE

 

HQ

 

	
  CENTRE NAME

  	
   

  	
  ADDRESS

  	
   

  	
  MINIMUM PICK UP

  FREQUENCY

  	
   

  
	
  Montréal

  	
   

  	
  4300 rue Garand

  Saint-Laurent (Québec),
  H4R 2A3

  Canada

  	
   

  	
  Once a week

  	
   

  
	
  Québec

  	
   

  	
  1070 avenue des Sciences-de-la-vie

  Québec
  (Québec), G1V 5C3

  Canada

  	
   

  	
  Every two weeks

  	
   

  

 

43

 

SCHEDULE “C” – PRODUCT SPECIFICATIONS

 

	
  Product

  	
   

  	
  Drug Identification Number

  (DIN)

  	
   

  	
  Specifications

  (Product Monograph Date)

  	
   

  
	
  GamaSTANMC S/D

  	
   

  	
  02230579

  	
   

  	
  6-Sep-06

  	
   

  
	
  Gamunex® 10%

  	
   

  	
  02247724

  	
   

  	
  1-Jun-06

  	
   

  
	
  Human Albumin 25%

  	
   

  	
  02223708

  	
   

  	
  30-Jun-06

  	
   

  
	
  HyperHEP BMC S/D

  	
   

  	
  02230738

  	
   

  	
  6-Sep-06

  	
   

  
	
  HyperRABMC S/D

  	
   

  	
  02230700

  	
   

  	
  28-Jun-06

  	
   

  
	
  HyperTETMC S/D

  	
   

  	
  02230697

  	
   

  	
  8-Jun-05

  	
   

  
	
  IGIVnexMC 10%

  	
   

  	
  02277921

  	
   

  	
  4-May-06

  	
   

  
	
  Plasbumin® - 5%

  	
   

  	
  02189100

  	
   

  	
  30-Jun-06

  	
   

  
	
  Plasbumin® - 25%

  	
   

  	
  02189119

  	
   

  	
  30-Jun-06

  	
   

  

 

44

 

SCHEDULE “D” – FRACTIONATION PRODUCTS AND
PRICE FOR FRACTIONATION

PRODUCTS

 

(Plasma volumes and prices)

 

Price Adjustments for Fractionation Products –
Volume of Plasma Picked-Up

 

	
  Product

  	
   

  	
  Formats

  	
   

  	
  [***] –

  [***]

  	
   

  	
  [***] –

  [***]

  	
   

  	
  > [***]

  	
   

  
	
  IGIVnexMC 10%

  	
   

  	
  100 mL and

  200 mL

  	
   

  	
  $[***]

  	
   

  	
  $[***]

  	
   

  	
  $[***]

  	
   

  
	
  Albumin 25%

  	
   

  	
  50 mL and 100 mL

  	
   

  	
  $[***]

  	
   

  	
  $[***]

  	
   

  	
  $[***]

  	
   

  

 

The Price Per Unit of Measure may be adjusted in accordance with Section 11.2
of the Agreement.

 

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

 

***CONFIDENTIAL TREATMENT REQUESTED

 

 

45

 

SCHEDULE “E” – INVENTORY LEVELS

 

In this Schedule “Supplier Inventory Levels” shall mean the volume 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 HQ.
All amounts per week in this Schedule shall be determined by dividing
the annual volume referenced in Section 3.4 of this Agreement by 52 weeks
and multiplied by the number of weeks set out in this Schedule.

 

	
  Product

  	
   

  	
  Formats

  	
   

  	
  Target HQ

  Inventory Level

  (weeks)

  	
   

  	
  Supplier

  Inventory Level

  (weeks)

  	
   

  	
  Shortage Level

  Combined HQ

  and Supplier

  Inventory

  (weeks)

  	
   

  
	
  GamaSTANMC S/D

  	
   

  	
  2 mL

  	
   

  	
  [***] weeks

  	
   

  	
  [***] weeks

  	
   

  	
  [***] weeks

  	
   

  
	
  Gamunex® 10%

  	
   

  	
  25 mL

  50 mL

  100 mL

  200 mL

  	
   

  	
  [***] weeks

  	
   

  	
  [***] weeks

  	
   

  	
  [***] weeks

  	
   

  
	
  Human
  Albumin 25%

  	
   

  	
  50 mL

  100 mL

  	
   

  	
  [***] weeks

  	
   

  	
  [***] weeks

  	
   

  	
  [***] weeks

  	
   

  
	
  HyperHEP
  BMC S/D

  	
   

  	
  0.5 mL

  5 mL

  	
   

  	
  [***] weeks

  	
   

  	
  [***] weeks

  	
   

  	
  [***] weeks

  	
   

  
	
  HyperRABMC S/D

  	
   

  	
  2 mL

  	
   

  	
  [***] weeks

  	
   

  	
  [***] weeks

  	
   

  	
   

  	
   

  
	
  HyperTETMC S/D

  	
   

  	
  250 U

  	
   

  	
  [***] weeks

  	
   

  	
  [***] weeks

  	
   

  	
  [***] weeks

  	
   

  
	
  IGIVnexMC

  	
   

  	
  100 mL

  200 mL

  	
   

  	
  [***] weeks

  	
   

  	
  [***] weeks

  	
   

  	
  [***] weeks

  	
   

  
	
  Plasbumin® - 5%

  	
   

  	
  50 mL

  250 mL

  	
   

  	
  [***] weeks

  	
   

  	
  * [***] weeks

  	
   

  	
  [***] weeks

  	
   

  
	
  Plasbumin® - 25%

  	
   

  	
  50 mL

  100 mL

  	
   

  	
  [***] weeks

  	
   

  	
  * [***] weeks

  	
   

  	
  [***] weeks

  	
   

  

 

·       *  Supplier will keep for the first
Agreement year commencing April 1, 2008, [***] weeks inventory of each
format of Plasbumin® - 5% and Plasbumin® -
25%. The level will increase at the start of the second agreement year to [***]
weeks of inventory of each format.

 

·       For GamaSTANMC S/D and HyperHEP
BMC S/D, Supplier shall keep in a site in Canada,
in addition to the [***] weeks inventory of products released by Supplier and
by Health Canada, a minimum of [***] weeks inventory of un-released products.

 

***CONFIDENTIAL TREATMENT REQUESTED

 

46

 

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 HQ inventory of that vial size falls below five (5) weeks
coverage, resulting in HQ 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 HQ (“Compensation”). The time period during which Supplier will
compensate HQ (“Compensation Period”) will commence when the HQ inventory falls
below five (5) weeks coverage due to the failure of Supplier to deliver to
HQ as provided for in the applicable Rolling Forecast. The Compensation Period
will end when sufficient product is delivered to HQ 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; and,

 

(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 determined in (b) and this will be
the total amount of Compensation owing by Supplier to HQ.

 

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

 

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

 

47

 

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.     maintain the safety and QA testing program
described in the Supplier’s proposals supporting documentation on Supplier’s
fractionation technology.

 

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

 

4.     continue to be a member of Biotech Canada;

 

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

 

6.     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.

 

Inquiries may be made to Supplier’ medical and scientific affairs
inquiries in the manner as described below.

 

If the inquiry is non-urgent and during normal business hours, the
process shall be to:

 

(i)         Contact
the Supplier extension of the Business Regional Manager that is responsible for
that account and region.

 

If the inquiry is urgent and during normal business hours, the process
shall be to:

 

(i)         Attempt to contact the Business Regional
Manager directly;

(ii)        If delayed, attempt to contact another Business
Regional Manager directly, the responsible market manager, Contract Director or
the QA director;

(iii)       Attempt to contact the vice-president directly.

 

If the inquiry is either urgent or non-urgent outside of business
hours, the process shall be to call after hours number and attempts will be
made by the Supplier customer service team to resolve the issue;

 

7.     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;

 

8.     Implement a comprehensive Business
Continuity/Disaster Recovery (BC/DR) Program including an Influenza Pandemic
Preparedness action plan.

 

48

 

SCHEDULE “H” - VALUE ADDED

 

Research Activities Inside Canada

 

Supplier shall provide collaborative initiatives with practical
applications for improving healthcare in Canada:

 

1.     The Talents
Program, will
support global investigator-led trials conceived by researchers and clinicians
with an interest in using IGIV. This peer-reviewed, 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 determined and organized by
the Supplier. 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.

 

2.     Supplier shall establish a collaborative
educational initiative, called the [***]. The [***] funding for this network
would be provided by Supplier in the amount of [***]. This network would be
established with a national committee in collaboration with CBS and HQ to
discuss current educational needs and identified issues in the clinical
laboratory community, in particular, to address the unique educational needs of
the laboratory specialist, including product quality assurance, assay
methodology, process improvements, and product safety information, could be
assured across Canada.

 

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

 

	
  Value-added funds

  	
   

  	
  2008/09

  	
   

  	
  2009/10

  	
   

  	
  2010/11

  	
   

  	
  2011/12

  	
   

  	
  2012/13

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Talents Program*

  	
   

  	
   

  	
  [***]

  	
   

  	
   

  	
  [***]

  	
   

  	
   

  	
  [***]

  	
   

  	
   

  	
  [***]

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
  US

  	
   

  	
  US

  	
   

  	
  US

  	
   

  	
  US

  	
   

  	
  US

  	
   

  
	
  [***]

  	
   

  	
   

  	
  [***]

  	
   

  	
   

  	
  [***]

  	
   

  	
   

  	
  [***]

  	
   

  	
   

  	
  [***]

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
  CDN

  	
   

  	
  CDN

  	
   

  	
  CDN

  	
   

  	
  CDN

  	
   

  	
  CDN

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Unrestricted Grant

  	
   

  	
   

  	
  [***]

  	
   

  	
   

  	
  [***]

  	
   

  	
   

  	
  [***]

  	
   

  	
   

  	
  [***]

  	
   

  	
   

  	
  [***]

  	
   

  
	
  (in lieu of Partnership Fund)

  	
   

  	
  CDN

  	
   

  	
  CDN

  	
   

  	
  CDN

  	
   

  	
  CDN

  	
   

  	
  CDN

  	
   

  

 

*: Total funds of [***] per year for the Talents Program will
be provided by Supplier to worldwide selected researchers and clinicians by the
Talents Grant Review Committee.

 

***CONFIDENTIAL TREATMENT REQUESTED

 

49

 

Additional Value Added

 

[***]

 

Supplier has established the Canadian [***] to better address the issue
of [***] associated with [***] in Canada to provide guidance and direction in
defining appropriate actions to address the increased reporting of [***] in
Canada. Supplier shall expand the role of the Committee to investigate other
timely Canadian issues, such as [***], in efforts to further enhance Canadian [***].
Supplier shall expend up to and no less than [***] in this matter.

 

Hospital Data Collection Initiative

 

Supplier commits to continue to collect hospital data with enrolled
hospitals for the purpose of understanding IVIG utilization trends and patterns
in hospitals.

 

Maintenance of Current Programs

 

Supplier shall maintain the [***] with the [***] Fellowship to be
awarded at the Montreal Neurological Institute, in the amount of [***], with
the institutional location of the Fellowship to rotate across Canada on an
[***] basis, as determined by the Supplier, so as to better provide an equal
geographical opportunity to cultivate research interests and further the
development of young investigators in neuromuscular research in Canada.

 

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

 

***CONFIDENTIAL TREATMENT REQUESTED

 

 

50

 

SCHEDULE “I” - B19 TESTING SERVICES

 

In this Schedule “I”:

 

“Samples” means the plasma sample which will be collected in a [***] by
HQ 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 B19 Testing Services described in this
Schedule “I” at its Facility located in Raleigh, North Carolina (“Talecris
Facility”), but may perform such testing at another location upon written
notice to HQ.

 

SAMPLES AND PLASMA PROCESSING

 

1.     All Samples provided to Supplier must meet the
specifications, packaging and shipping requirements set forth in this Schedule
I (“Sample Specifications”).

 

Supplier has the right to refuse Samples not meeting specifications as
set out in HQ Standard Operating Procedure (“SOP”) PCS-INS-031 Réception des dons de sang.

 

2.     HQ shall ensure that Samples of each Plasma unit
to be collected by Supplier pursuant to this Agreement are made available for
pickup at the HQ Production Sites and conform to the Sample Specifications.

 

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

 

4.     The Supplier confirm that the Samples are viable
for testing for a period of twelve (12) months in a frozen state based on a
temperature validation study made on the Samples.

 

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 HQ’s failure to meet its obligations under
this Agreement in a timely manner and which are not attributable to any action
or omission of Supplier.

 

6.     In the event that HQ materially alters any of its
SOPs affecting the collection of Samples to be used by Supplier for the
performance of the testing during the Term of this Agreement, HQ 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 HQ shall notify Supplier as soon as reasonably
possible. HQ will work with Supplier to evaluate the consequences of any such
change to the testing. Talecris shall submit to HQ the costs associated with
the change in HQ’s SOP, including the cost of investigation such as additional
validation work or pathogen safety research that may be required. HQ will
notify Supplier if it accepts such costs.

 

***CONFIDENTIAL TREATMENT REQUESTED

 

51

 

LOSS

 

1.     HQ 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 HQ Production 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 HQ’s actions or omission. Any loss of Plasma resulting from the
loss or the damage of the Samples attributable to the Supplier shall be
compensated by the Supplier providing Replacement Fractionation Products
pursuant to Section 8.12 of the Agreement. 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 HQ and CBS.

 

3.     In the event that a minimum of one (1) clamshell
holder of Samples is missing, where HQ admits that the Samples are missing due
to HQ’s act or omission, and HQ cannot locate the Samples within ten (10) Business
Days from the date Supplier notifies HQ of the missing Samples, Supplier will
use its reasonable efforts to find a solution acceptable to HQ 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 pursuant to
Section 8.12 to this Agreement.

 

4.     For any Elevated Manufacturing Pools, a root cause
analysis on these pools will be performed by Supplier and the liability for
such 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 titre units, wrong units interdicted, misreading results, or
system failure, then Supplier shall provide Replacement Fractionation Products
pursuant to Section 8.12 of the 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 (excluding re-processed lots);

 

(ii)       if the destruction of the Elevated Manufacturing
Pool is necessitated because of any action or omission by HQ, including but not
limited to mislabelling, cross-contamination at collection, and Supplier
provides sufficient evidence of this to HQ’s reasonable satisfaction, then HQ
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)      [***]

 

***CONFIDENTIAL TREATMENT REQUESTED

 

52

 

[***]

 

TERM AND TERMINATION

 

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

 

TESTING

 

For each unit of Plasma shipped to Supplier, HQ 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 HQ.

 

TIMING

 

[***]

 

DATA MANAGEMENT / RESULTS

 

All interdicted high titre
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 HQ. Supplier will bear the
costs of the plasma unit destruction. Supplier will not provide individual test
results to HQ.

 

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.

 

***CONFIDENTIAL TREATMENT REQUESTED

 

53

 

SAMPLE
SPECIFICATIONS

 

1.          The Sample shall be collected by HQ 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 HQ 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 HQ SOP CLI-INS-051 Prélèvement des échantillons avec ou sans
don de sang.

 

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

 

5.          The Samples shall be handled following the
temperature specifications as set forth in HQ SOPs LAB-INS-015 Traitement des échantillons and PCS-INS-044 Traitement
des échantillons
destinés
au test du parvovirus B19, 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 HQ Director, Fractionation Products by
telephone and facsimile transmission as stated in subsection 23.4. HQ will have
ten (10) Business Days to retrieve any missing Samples and ship any
missing Samples. Such deviations to be reported back to HQ at the regular
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. HQ 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 are described in HQ SOP LGP-INS-018 Envoi du plasma et des échantillons destinés au
fractionnateur. 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 HQ SOP LGP-INS-018 Envoi du plasma et des échantillons destinés au fractionnateur.

 

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.

 

***CONFIDENTIAL TREATMENT REQUESTED

 

54

 

6.          The
shipping documents that will accompany each Vendor Batch (HQ Lot Number) are
listed in HQ SOP LOP-INS-018 Envoi du plasma
et des échantillons destinés au fractionnateur.

 

7.          If there is an issue with a Vendor Batch (HQ
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).

 

FEES

 

1.     Supplier may invoice HQ for the fees as set out
below.

 

2.     On April 1 of each year during the Term of
this Agreement, Supplier may, in its sole discretion, increase the fees for the
testing up to the maximum of CPI over the previous calendar year. Supplier
shall notify HQ in writing within forty-five (45) days of the start of each
Agreement year of the proposed price change otherwise it shall be deemed that
the current Agreement year prices will remain in effect for an additional year.

 

The total fee for the Testing Services shall be [***] per sample
commencing April 1, 2008.

 

All invoices shall be submitted in duplicate to HQ 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 testing that are
the subject of the invoice:

 

·      Supplier will invoice HQ 1/12th of
the annual estimated cost based on the forecasted total number of Samples (base
from litres forecast) in a Agreement year.

 

·      Supplier 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 regular Fractionation 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.

 

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.
Payment terms will be Net 30 days.

 

***CONFIDENTIAL TREATMENT REQUESTED

 

55

 

SCHEDULE “J” – KEY PERFORMANCE INDICATORS
PROGRAM

 

Extended performance measurement program

 

1.        Objective:

 

The extended performance measurement program has been created to measure
and document HQ’s supplier performance for different aspects related to
Products with the goal of optimizating performance and ensuring maximum
efficiency.

 

2.        Key Performance Indicators (KPI):

 

The extended performance measurement is based on four indicators :

 

a)    Delivery performance (20%)

b)    Product conformance (15%)

c)    Contract – partnership

1.     Regulatory documentation
(15%)

2.     Inventory level (20%)

d)    Customer service (30%)

 

a)    Delivery performance (20%)

 

Delivery performance is based on three criteria:

 

·     Quantity;

·     Delivery date;

·     Documentation.

 

A global result is calculated based on the number of line items
respecting all three criteria

 

Formula : Number of line items respecting
all 3 criteria

Total number of line items

 

HQ has established a delivery objective of 98% or more on the monthly
performance rating for Supplier.

 

The results compiled by criteria are, however, not in direct relation
to the global result.

 

For each measurement criteria, there are three possibilities:

 

·     Respect;

·     Non-respect; or

·     Not received.

 

Respect : The criteria is considered as “in respect” if :

 

·     The criteria is respected;

·     HQ is notified of a change and if HQ is in
acceptance of the change.

 

56

 

Non-respect : The criteria is considered as “non respect” if:

 

·     The criteria is not respected or is erroneous;

·     A change is not notified to HQ;

·     A change is notified to but not accepted by HQ for
a delay within the same month.

 

Not received : The criteria is considered as “not received” if:

 

·     The criteria is not fulfilled in the current
month;

·     A change is notified to but not accepted by HQ and
which in consequence entails a delivery delay to a subsequent month.

 

Note: Any change that is affected within the Binding Forecast and is
accepted by Parties is measured according to the established criteria based on
the updated requirement.

 

Quantity criteria:

 

·      A line item delivered at ± 10% is considered as a
“non-respect” if a change in quantity has not been confirmed to HQ fractionation
department;

·      A pre-shipment notification must be provided to
HQ prior to delivery, confirming the exact quantity/quantities to be shipped.
Upon receipt, should the quantity for any line item differ from the quantity
confirmed, the applicable line item will be considered as a “non-respect”;

·      If the total quantity for a line item will not be
received in a single delivery and if the HQ fractionation department has
accepted the split delivery, a new line item will be created to reflect the
subsequent delivery and will in consequence be measured according to the
updated information.

 

Delivery date criteria:

 

·      Supplier must supply a written pre-shipment
notification confirming the precise delivery date for each line item. If the
actual receipt date differs from the confirmed date, the applicable line item(s) will
be considered as “non-respect”;

·      A line item which is delivered in a month other
then the current month and for which HQ fractionation department has not
accepted the schedule change, the line item will be considered as “not received”.

 

Documentation criteria:

 

·      The documentation criteria includes two types of
documentation :

 

·    Pre-shipment
notification

·    Documentation
at the time of receipt

 

Pre-shipment notification:

 

·      Includes all necessary documentation required for
the receipt and the Quality Assurance release for each line item. These
documents are required by HQ minimum one (1) business day prior to the
receipt. Any documentation containing erroneous information will constitute a ‘non-respect’.

·      Documentation requirements : Pre-shipment
notification

 

·    Lot
release letter issued by Health Canada (if applicable)*

·    Certificate
of analysis*

 

57

 

Note: The lot release letter and the certificate of analysis is
required only prior to the first receipt of any given lot to HQ.

 

Documentation at the time of receipt:

 

·      The packing slip must be included with the
shipment and received by HQ at the time of receipt. If any pertinent
information included therein is erroneous, the documentation criteria will be
considered as ‘non-respect’.

·      For example:

 

·    HQ
purchase order number & line item

·    HQ
item number

·    Quantity

·    Expiry
date

 

b)    Product conformance (15%)

Non-exhaustive list of elements to be measured (when applicable):

 

·      Integrity of packaging

·      Temperature excursion

·      Missing product

·      Labelling or printing issues (lot number, expiry
date)

 

c)    Contract – Partnership 

Regulatory documentation (15%)

 

Timely receipt of documentation pursuant to Section 12.4.
Non-exhaustive list of elements to be measured (when applicable):

 

·      Notice of Supplemental/New drug Submission

·      Notice of compliance

·      Product Monographs

·      Health Canada Exit Notices

·      FDA 483

·      Recall/Withdrawal

·      Warning Letters

 

Inventory level (20%)

 

The respect of the Supplier Inventory level is evaluated for a security
of supply and a customer service (availability of all formats of products)
standpoint.

 

Method of calculation:

 

·      Monthly average of weekly level

·      Should the inventory level of a format fall below
50% of the target level during the month, Supplier will need to inform HQ, on
the first working day following the end month, of the number of days that such
product was under 50%.

·      The inventory performance rating for the month
will be reduced by 2% per working day for each product at less than 50% of the
target level during that month.

 

d)    Customer service (30%)

Timely response: Non-exhaustive list of elements to be measured (when
applicable): 10%

 

58

 

·      Specific questions about product(s)

·      Questions of a general nature

·      Request for documentation or missing information

·      Complaints

·      Adverse event reporting

·      SAP management by the Supplier

 

Quality of information: Non-exhaustive list of elements to be measured
(when applicable): 10%

 

·      Information received is clear and complete

·      Information received meets the request of HQ

·      Information received is accurate

 

Quality of support / service: non-exhaustive list of elements to be
measured (when applicable): 10%

 

·      Accessibility of appropriate personnel

·      Pro activity

·      Responsiveness to HQ requests

 

3.        Evaluation

 

·      HQ evaluates each indicator/criterion on a scale
from 20 % to 100% (with the exception of delivery performance and inventory
level)

 

·    100%
: Perfect performance

·    95%
:   Good, consistent

·    80%
:   Acceptable Effort, but should be more
steadfast

·    60%
:   Poor, negligent

·    20%
:   Unacceptable

 

·      Each indicator/criterion is attributed a
weighting (%).

 

HQ has determined an annual target of 96% for overall Supplier
performance. An overall performance of is considered as:

 

Excellent performance: 96% +

 

The performance of the supplier largely and constantly exceeds all the criteria sets out in the
stable products key performance indicators program.

 

Good performance: 90% - 95%

 

The supplier’s performance is good based on the criteria set out in
stable products key performance indicators program. However, efforts are
expected in order to improve results on a few criteria.

 

Improvements are required: Less than 90%:

 

The performance of the supplier is not meeting the objective(s) of
the stable products key performance indicators program. Improvements are
required on several criteria of the program.

 

4.        Reporting:

 

·      On a monthly basis, HQ will identify any
incidents that were documented during the preceding month.

·      Supplier is encouraged to instate corrective
action in order to improve performance rating for appropriate
indicator/criterion.

·      A preliminary report will be presented to
Supplier after the first 6 months.

·      A final report will be presented to Supplier at
year end.

 

59Exhibit 10.31

 

Execution Copy

*** TEXT OMITTED AND SUBMITTED SEPARATELY

PURSUANT TO CONFIDENTIAL TREATMENT REQUEST

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

 

SUPPLY AGREEMENT

 

BY AND BETWEEN

 

BAYER HEALTHCARE LLC

BIOLOGICAL PRODUCTS DIVISION

BERKELEY, CALIFORNIA

 

AND

 

TALECRIS BIOTHERAPEUTICS, INC.

RALEIGH, NORTH CAROLINA

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
   

  	
  TERM OF AGREEMENT

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
  PURCHASE AND SALE OF PPF

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Volume
  Requirements

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.2

  	
   

  	
  Forecasts

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.3

  	
   

  	
  Purchase
  Orders

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.4

  	
   

  	
  Shipments

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.5

  	
   

  	
  Inventory
  Levels

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.6

  	
   

  	
  Cooperation
  of the Parties

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.7

  	
   

  	
  Meetings

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
  QUALITY AND SPECIFICATIONS

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Specifications

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.2

  	
   

  	
  Testing

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.3

  	
   

  	
  Acceptance

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.4

  	
   

  	
  Latent
  Defects

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.5

  	
   

  	
  Deviation
  Report

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.6

  	
   

  	
  Records

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  	
  PRICE AND PRICE ADJUSTMENT

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Price

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.2

  	
   

  	
  Adjustment
  to Price

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.3

  	
   

  	
  Price
  Adjustment Calculation

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
  BILLING AND PAYMENT

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Payments

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2

  	
   

  	
  Payment
  Disputes

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
  REGULATORY REQUIREMENTS

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Compliance
  with Regulations

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.2

  	
   

  	
  Audit

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.3

  	
   

  	
  Regulatory
  Filings

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.4

  	
   

  	
  Regulatory
  Approvals

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.5

  	
   

  	
  Onsite
  Personnel

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  	
  NONCONFORMING PRODUCT AND RECALLS

  	
   

  	
  9

  

 

i

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
  7.1

  	
   

  	
  Nonconforming
  Product

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.2

  	
   

  	
  General
  Requirements

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.3

  	
   

  	
  Distribution
  and Use Records

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.4

  	
   

  	
  Adverse
  Events

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.5

  	
   

  	
  Customer
  Notification of Adverse Reactions

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.6

  	
   

  	
  Withdrawals
  and Recalls

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.7

  	
   

  	
  Complaints

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.8

  	
   

  	
  Responsibility

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  	
  FORCE MAJEURE

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  	
  REPRESENTATIONS AND WARRANTIES AND DISCLAIMER

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  Regulatory
  Requirements

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.2

  	
   

  	
  Debarment

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.3

  	
   

  	
  Compliance

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.4

  	
   

  	
  Intellectual
  Property

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.5

  	
   

  	
  Representations
  and Warranties

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.6

  	
   

  	
  Disclaimer

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  	
  TERMINATION

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.1

  	
   

  	
  Termination
  for Cause

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.2

  	
   

  	
  Termination
  for Supplier’s Force Majeure

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.3

  	
   

  	
  Other
  Termination Provisions

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.4

  	
   

  	
  Termination
  Without Cause

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.5

  	
   

  	
  Effect of
  Termination

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.6

  	
   

  	
  Remedies

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.7

  	
   

  	
  Special
  Assistance

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.8

  	
   

  	
  Survival

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
   

  	
  INDEMNITIES AND DAMAGES

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.1

  	
   

  	
  Indemnifications

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.2

  	
   

  	
  Indemnification
  Process

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.3

  	
   

  	
  Insurance

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.4

  	
   

  	
  Liquidated
  Damages And Other Damages For Failure To Deliver PPF

  	
   

  	
  18

  

 

ii

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
  11.5

  	
   

  	
  Insurance
  Recoveries

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
   

  	
  CONFIDENTIALITY

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.1

  	
   

  	
  Confidentiality
  Obligations

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.2

  	
   

  	
  Exceptions

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.3

  	
   

  	
  Term of
  Obligations

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.1

  	
   

  	
  Consent to
  Assignment

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.2

  	
   

  	
  Entire
  Agreement and Amendments

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.3

  	
   

  	
  Notices

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.4

  	
   

  	
  Independent
  Contractor

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.5

  	
   

  	
  Non-Waiver

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.6

  	
   

  	
  Choice of
  Law

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.7

  	
   

  	
  Captions

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.8

  	
   

  	
  Severability

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.9

  	
   

  	
  Dispute
  Resolution

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.10

  	
   

  	
  Defined
  Terms

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.11

  	
   

  	
  Set-Off

  	
   

  	
  25

  

 

iii

 

SUPPLY AGREEMENT

 

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

 

WITNESSETH

 

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

 

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

 

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

 

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

 

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

 

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

 

NOW, THEREFORE, for
and in consideration of the premises and the mutual covenants contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties hereto do hereby agree as follows:

 

ARTICLE
1  TERM OF
AGREEMENT

 

This Agreement shall have an initial term
commencing on the Effective Date and terminating on December 31, 2008 (“Initial Term”) unless
earlier terminated as provided in Article 10 below. The Initial Term may be
renewed for two consecutive two (2) year periods at the option of Bayer,
provided that Bayer gives Supplier at least one (1) year’s written notice prior
to the end of each expiring term of its intent to renew (each an “Extended Term,” and
along with the Initial Term, the “Term”).

 

1

 

ARTICLE
2  PURCHASE
AND SALE OF PPF

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

*** CONFIDENTIAL TREATMENT REQUESTED

 

3

 

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

 

2.7        Meetings. Unless
otherwise mutually agreed, the manufacturing representative of each Party shall
meet (either in person or via conference call) no less than monthly to discuss
the forecasts delivered by Bayer pursuant to this Agreement and other matters
relevant to the supply of PPF hereunder. In addition, the senior manager of
each Party shall meet (either in person or via conference call) on a quarterly
basis to discuss matters relevant to the supply of PPF hereunder. At least
three (3) business days prior to each meeting, each Party shall deliver to the
other Party a written report regarding the issues to be discussed at such
meeting.

 

ARTICLE
3  QUALITY
AND SPECIFICATIONS

 

3.1        Specifications. Supplier
shall manufacture, process, store, distribute, test, transport, dispose and
otherwise handle PPF at all times in compliance with cGMPs (as defined in
Section 6.1) and other applicable Regulations (as defined in Section 6.1
below), the Manufacturing Agreement (attached hereto as Exhibit D  and incorporated herein by
reference), the specifications (attached hereto as Exhibit E and incorporated herein by
reference) (the “Specifications”)
and the SOPs as defined in Section 6.2. The Manufacturing Agreement shall be
renewed annually, consistent with the Term of this Agreement, with each such
renewal deemed attached hereto as Exhibit D
and incorporated herein by reference. In the event of a conflict between the
provisions of this Agreement and the provisions of the Manufacturing Agreement,
the provisions of this Agreement shall prevail. Neither Party shall make
changes to the batch production records or the Specifications without the prior
written approval of the other Party which approval will not be unreasonably
withheld. Supplier shall make no changes in the SOPs, production equipment,
production procedures, or testing methods existing as of the date of this
Agreement without providing reasonable notice to Bayer in advance of the change
and obtaining Bayer’s prior written consent. Bayer shall use commercially
reasonable efforts to provide such consent as soon as reasonably practicable
with the understanding that Bayer is under no obligation to provide any such
consent if the proposed change would substantially and adversely affect or
reduce Bayer’s production of Kogenate. Supplier shall maintain all records as
are necessary and appropriate to demonstrate compliance with the Regulations. Bayer
shall be entitled to request Supplier to change the Specifications and the SOPs
as defined in Section 6.2 where, in Bayer’s sole discretion, such change would
benefit Bayer’s production of Kogenate and Supplier shall use commercially
reasonable efforts to accommodate such change;

 

4

 

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

 

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

 

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

 

3.4        Latent Defects. If after
accepting a shipment of PPF, Bayer subsequently discovers latent material
defects (including without limitation, nonconformance to the Specifications)
not reasonably discoverable during the acceptance period set forth in Section
3.3, Bayer may revoke its acceptance of such shipment of PPF by giving written
notice and disclosing the nature of any defects to Supplier as soon as
practicable after discovering such defects. In such event, such PPF shall be
considered a Nonconforming Product to the extent latent material defects in
fact are present and the provisions of Section 7.1 below shall apply.

 

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

 

5

 

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

 

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

 

ARTICLE
4  PRICE
AND PRICE ADJUSTMENT

 

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

 

4.2           Adjustment to Price.

 

(a)           Annual.
The Price shall be adjusted annually by Supplier on October 1 or as soon
thereafter as possible with respect to PPF sold in each subsequent calendar
year during the Term based on the assumption that the Term commences during
calendar year 2004. Such adjustment to Price (the “Price Adjustment”)
shall reflect the change in the CPI-U. For purposes of the foregoing, “CPI-U” shall mean the
unadjusted percentage change for the previous twelve-month period ending on
September 30 of each calendar year, as published in the Consumer Price Index
for all urban consumers by the U.S. Department of Labor, Bureau of Labor
Statistics. For the avoidance of doubt, the first such Price Adjustment shall
become effective January 1, 2005.

 

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

 

4.3           Price Adjustment Calculation. On October 1st of each calendar year or as soon thereafter as
possible, Supplier shall provide for Bayer’s review and approval the
computation of the Price Adjustment (as determined in accordance with Section
4.2 above) to be applied in the following calendar year, and the methodology
used in making such computation. Such adjustment shall be final and binding in
the absence of manifest error.

 

ARTICLE
5  BILLING
AND PAYMENT

 

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

 

6

 

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

 

ARTICLE
6  REGULATORY
REQUIREMENTS

 

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

 

6.2           Audit. Bayer shall have the
right, on reasonable written advance notice (to the extent practicable, not
less than one (1) week advance notice), and during normal business hours, to
inspect and audit Supplier’s facilities, Standard Operating Procedures (as in
effect as of the Effective Date and amended from time to time upon mutual
agreement of the Parties, and any replacement or successor thereof, “SOPs”), production,
operations, testing, storage and books and records to confirm compliance with
Section 6.1 and Supplier’s compliance with the terms and conditions of this
Agreement, provided that such inspection or audit does not unreasonably
interfere with the conduct of business of Supplier. Supplier shall use its
commercially reasonable efforts to accommodate any reasonable request made by
Bayer to inspect such facility. Supplier shall respond in writing to Bayer
regarding any items of noncompliance identified by Bayer during such
inspections or audits within fifteen (15) days of Bayer’s notice thereof and
shall develop a plan, reasonably satisfactory to Bayer, to remedy any such
items of noncompliance within sixty (60) days of notice thereof and shall
remedy such items of 

 

7

 

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

 

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

 

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

 

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

 

8

 

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

 

ARTICLE
7  NONCONFORMING
PRODUCT AND RECALLS

 

7.1           Nonconforming Product. In the event that Supplier
provides PPF that does not meet the Regulations or does not conform to the
Specifications, or contains latent defects, or that has not been manufactured,
processed, stored, distributed, tested, transported, disposed of or otherwise
handled in accordance with applicable SOPs, the Specifications, cGMPs and the
Regulations (“Nonconforming
Product”), Supplier will at no cost to Bayer, and as soon as
reasonably feasible, replace such Nonconforming Product with an equivalent
amount of conforming PPF. Bayer shall destroy all Nonconforming Product and
promptly provide a certificate of destruction to Supplier. Supplier shall
reimburse Bayer for the reasonable costs of such destruction. In addition to
those obligations set forth above, Supplier shall provide Bayer with the
identification number of any plasma unit that was pooled and manufactured into
a batch or lot of Nonconforming Product delivered to Bayer.

 

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

 

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

 

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

 

9

 

7.5           Customer Notification of Adverse Reactions. In the event
that during the course of a preliminary investigation related to a report of
any serious adverse reaction associated with Kogenate® or other Product, Bayer obtains preliminary
evidence indicating that, according to indications and dosage, the PPF used in
the manufacture of such Product may have caused such specific adverse reaction,
each Bayer customer that received any such Product shall be notified by Bayer
and cautioned that any unused containers of the suspect lots should be withheld
from use, pending the outcome of more definitive investigations and evaluations,
with a copy of such notice to the applicable Regulatory Authority if required. Bayer
shall promptly provide Supplier with a copy of such notice. Any and all of the
foregoing actions will be executed with the concurrence of all relevant
Regulatory Authority, to the extent required by law.

 

7.6           Withdrawals and Recalls. Bayer shall
make all contacts with the relevant Regulatory Authority and shall be
responsible for coordinating all activities in connection with any recall or
withdrawal of any Product. In the event that Supplier believes a recall or
withdrawal of a Product may be necessary or appropriate, Supplier shall
promptly notify Bayer in writing. In the event that Bayer initiates a recall or
withdrawal of a Product, Bayer shall promptly notify Supplier.

 

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

 

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

 

ARTICLE
8  FORCE
MAJEURE

 

For the
purpose of this Agreement, “Force Majeure” shall mean only (i) acts of God, acts of
the public enemy, insurrections, riots, sabotage, strike, work-stoppage or
other labor dispute and natural disasters; (ii) explosions, fires, flood
damage, or loss of electric power not resulting from the negligence of the
Party invoking Force Majeure; (iii) regulatory actions not attributable to any
violation of law after the date hereof on the part of Supplier or Bayer, as the
case may be, unless, in the case of Supplier, Supplier is required as a result
of any statute, law, regulation, ordinance, rule, judgment, code, order, decree
or other requirement of a Regulatory Authority (“Applicable Law”), not initiated by
Supplier, to cease or materially curtail production primarily based upon (x)
violation of any Applicable Law which violation was in existence on the
Effective Date or (y) any condition in existence on the Effective Date or any
condition alleged in writing to have been in existence on or prior to the
Effective Date by a Regulatory Authority which condition remained outstanding
on the Effective Date and which condition constituted a violation or alleged
violation of Applicable Law or impacts the 
safety or efficacy of PPF; and (iv) in the case of Supplier, events,
circumstances, conditions and actions outside of the control of Supplier that
materially and adversely affect the plasma-derived products industry generally,
including interruptions of supply of raw plasma due to viral outbreaks,
eruption of new viruses and similar events that are reasonably likely to be
subject to action by any Regulatory Authority; 

 

10

 

any of (i), (ii), (iii) or (iv) of which, in
the case of the Supplier, prevents the Supplier from performing its obligations
under this Agreement, or, any of (i), (ii) or (iii) of which, in the case of
Bayer, prevents Bayer from producing Kogenate or performing its obligations under
this Agreement; provided that nothing in clause (iii) or (iv) shall excuse
Supplier from complying with cGMPs or excuse Supplier from remedying those
matters which were capable of remedy by Supplier through the application of
commercially reasonable efforts prior to the occurrence of the events
identified in (iii) or (iv) preventing Supplier from performing under the
Agreement. Notwithstanding anything in this Agreement to the contrary, except
Section 10.7, Article 12 and Article 13, the Party experiencing the Force
Majeure shall be excused from the performance of each of its obligations under
this Agreement upon a Force Majeure, but only to the extent performance of any
such obligation is necessarily prevented, hindered or delayed thereby and only
during the continuance of any such Force Majeure, and shall have no liability
for damages arising from non-performance of any obligation excused by a Force
Majeure. Furthermore, if Bayer terminates this Agreement pursuant to Section
10.2, there shall be no further damages arising from any non-performance
excused by a Force Majeure. The Party suffering such Force Majeure shall invoke
this provision by promptly notifying the other Party in writing of the nature
and estimated duration of the suspension period, as well as the extent to which
it will be unable to fulfill its obligations under the Agreement. Each Party
shall be relieved of performance of its obligations under this Agreement during
the time when it is prevented from performing by the failure of the other Party
to perform its obligations or because of any event of Force Majeure.

 

ARTICLE
9  REPRESENTATIONS
AND WARRANTIES AND DISCLAIMER

 

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

 

9.2           Debarment. Supplier certifies it will
not use in any capacity the services of any person, including any firm or
individual, that has been debarred or is subject to debarment under the Generic
Drug Enforcement Act of 1992, amending the Food Drug and Cosmetic Act of 21
U.S.C. 335a (a) or (b). Supplier agrees to notify Bayer promptly in the event
any person providing services to Supplier under the scope of this Agreement is
debarred or becomes subject to debarment.

 

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

 

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

 

11

 

processing by Bayer shall (i)
conform to applicable SOPs, the Specifications, cGMPs and the Regulations, and
(ii) be free from defects in materials and workmanship and shall not be
adulterated or misbranded within the meaning of the applicable Regulations.

 

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

 

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

 

9.5                                 Representations
and Warranties.

 

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

 

(i)            Due
Organization, Good Standing and Power. Bayer is a limited liability company
duly organized, validly existing and in good standing under the laws of the
state of Delaware. Bayer has all requisite corporate or other power and
authority to own or lease and to operate its assets and to conduct the business
now being conducted by it. Bayer is duly authorized, qualified or licensed to
do business as a foreign corporation or other organization in good standing in
each of the jurisdictions in which its ownership of property or the conduct of
its business requires such authorization, qualification or licensing, except
where the failure to have such authorization, qualification or licensing could
not reasonably be expected to have a material adverse effect on Bayer or on the
consummation of the transactions contemplated hereunder. Bayer has all
requisite corporate power and authority under Applicable Law and its Charter
Documents to enter into this Agreement and to perform its obligations hereunder
and to consummate the transactions contemplated hereby.

 

(ii)           Authorization
and Validity of Agreement. The execution and delivery of this Agreement by Bayer
and the consummation by it of the transactions contemplated hereby have been
duly authorized and approved by all necessary corporate action under Applicable
Law and the relevant Charter Documents on the part of Bayer and do not require
the approval of the stockholders of Bayer. This Agreement has been duly
executed and delivered by Bayer and constitutes the legal, valid and binding
obligation of 

 

12

 

Bayer enforceable against it in accordance with its terms, except as
that enforceability may be (i) limited by any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors’ rights generally, (ii) subject to general principles
of equity (regardless of whether that enforceability is considered in a
proceeding in equity or at law) and (iii) limited by general principles of Applicable
Law regarding the enforceability of arbitral awards and judicial decisions.

 

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

 

(iv)          No
Consents. The execution, delivery and performance of this Agreement by Bayer
and the consummation of the transactions contemplated by this Agreement do not
require any Governmental Approval. No consent (other than Governmental
Approvals) will be required to be obtained by Bayer for the consummation of the
transactions contemplated by this Agreement.

 

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

 

(i)            Due
Organization, Good Standing and Power. Supplier is a corporation duly
organized, validly existing and in good standing under the laws of the state of
Delaware. Supplier has all requisite corporate or other power and authority to
own or lease and to operate its assets and to conduct the business now being
conducted by it. Supplier is duly authorized, qualified or licensed to do
business as a foreign corporation or other organization in good standing in
each of the jurisdictions in which its ownership of property or the conduct of
its business requires such authorization, qualification or licensing, except
where the failure to have such authorization, qualification or licensing could
not reasonably be expected to have a material adverse effect on Supplier or on
the consummation of the transactions contemplated hereunder. Supplier has all
requisite corporate power and authority under Applicable Law and its Charter
Documents to enter into this Agreement and to perform its obligations hereunder
and to consummate the transactions contemplated hereby.

 

(ii)           Authorization
and Validity of Agreement. The execution and delivery of this Agreement by Supplier
and the consummation by it of the transactions contemplated hereby have been
duly authorized and approved by all necessary corporate action under Applicable
Law and the relevant Charter Documents on the part of Supplier and do not
require the approval of the stockholders of Supplier. This Agreement has been
duly executed and delivered by Supplier and constitutes the legal, valid and
binding obligation of Supplier enforceable against it in accordance with its
terms, except as that enforceability may be (i) limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors’ rights generally, (ii) subject to general
principles of equity (regardless of whether that enforceability is considered
in a proceeding in equity or at law) and (iii) limited by

 

13

 

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

 

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

 

(iv)          No
Consents. The execution, delivery and performance of this Agreement by Supplier
and the consummation of the transactions contemplated by this Agreement do not
require any Governmental Approval. No consent (other than Governmental
Approvals) will be required to be obtained by Supplier for the consummation of
the transactions contemplated by this Agreement.

 

9.6           Disclaimer. SUPPLIER MAKES NO
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, OTHER THAN THOSE EXPRESSLY
MADE IN THIS AGREEMENT. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING,
WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE, ARE HEREBY DISCLAIMED.

 

ARTICLE
10  TERMINATION

 

10.1         Termination for Cause. If either Party commits a
substantial violation of any material provision of the Agreement (which means
(i) in the case of Bayer, nonpayment of amounts owing to Supplier in accordance
with Section 5.1 or any other material breach of any representation, warranty,
covenant or performance obligations under this Agreement by Bayer and (ii) in
the case of Supplier, any material breach of any representation, warranty,
covenant or performance obligation under this Agreement (other than breach of its
obligation to deliver PPF under this Agreement, any such breach to be governed
exclusively under Section 11.4 hereof)), the other Party may, without prejudice
to any other right or remedy, and after giving the breaching Party sixty (60)
days’ written notice of the breach, terminate the Agreement. This Agreement
shall not be so terminated if the breaching Party has cured the breach, or
submitted a plan for curing the breach reasonably acceptable to the
non-breaching Party within sixty (60) days after the non-breaching Party’s
notice. If the breaching Party fails to cure the breach as set forth in the
aforementioned plan in accordance with the deadlines set forth therein, the
non-breaching Party may terminate this Agreement without further notice. The
non-breaching Party shall have the right to recover all direct damages and
losses arising as a result of any such material breach, including lost profits
but not including consequential damages, provided that any such recovery shall
be reduced by the amount that such non-breaching Party actually recovers under
any insurance it maintains.

 

10.2         Termination for Supplier’s Force Majeure. Bayer may
terminate this Agreement in its sole discretion upon thirty (30) days’ prior
written notice in the event of any failure or inability of Supplier extending
beyond ninety (90) days to provide supply hereunder (other than from inventory)
due to Force Majeure. In the event of termination under this Section 10.2,
Supplier

 

14

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

 

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

 

(i)            admits in writing that it is unable
to pay its debts as they become due;

 

(ii)           starts a proceeding, or indicates its
acquiescence to a proceeding started by another, relating to it under any
bankruptcy, reorganization, rearrangement, insolvency, readjustment of debt,
dissolution, liquidation or similar law;

 

(iii)          makes an assignment for the benefit of
creditors;

 

(iv)          consents to the appointment of a
receiver, trustee or liquidator for a substantial part of its property;

 

(v)           files, or has filed against it, a
petition in bankruptcy, reorganization, rearrangement or insolvency which, if
filed against it, is not dissolved or dismissed within ninety (90) days after
filing; or

 

(vi)          has entered against it an order by a
court of competent jurisdiction appointing a receiver, trustee or liquidator
for it or a substantial part of its property, or approving its dissolution or
termination, and if not consented to or acquiesced in by such Party, such order
is not vacated or set aside or stayed within ninety (90) days.

 

Notwithstanding anything to the contrary herein, no Party shall take or
cause to be taken any action relating to the voluntary liquidation or
dissolution of such Party.

 

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

 

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

 

15

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

 

10.6         Remedies. The rights of a Party to
this Agreement to recover monetary damages from the other Party to this
Agreement with respect to termination of this Agreement are exclusively set
forth in this Article 10. Each Party shall have such non-monetary rights and
remedies provided under this Agreement or under law or in equity for breaches
of this Agreement, but only limited to the remedy of specific performance.

 

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

 

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

 

ARTICLE
11  INDEMNITIES
AND DAMAGES

 

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

 

16

 

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

 

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

 

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

 

17

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

18

 

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

 

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

 

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

 

19

 

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

 

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

 

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

 

ARTICLE
12  CONFIDENTIALITY

 

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

 

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

 

20

 

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

 

ARTICLE
13  MISCELLANEOUS

 

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

 

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

 

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

 

21

 

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

 

(a)                                  If to Bayer:

 

Bayer HealthCare LLC

Biological Products Division

800 Dwight Way

P.O. Box 1986

Berkeley, CA 94710

Attention:  Contract Manager

 

With a copy to:

 

Bayer HealthCare LLC

400 Morgan Lane

West Haven, CT  06516-4175

Attention:  General Counsel

 

Marilyn Mooney

Fulbright & Jaworski L.L.P.

801 Pennsylvania Avenue, N.W.

Washington, D.C. 20004

 

(b)                                 If to Supplier:

 

Talecris Biotherapeutics, Inc.

P.O. Box 13887

79 TW Alexander Drive

4101 Research Commons

Research Triangle Park

Raleigh, NC  27709

Fax:  (919) 316-6669

 

With copies to:

 

Alison S. Ressler, Esq.

Sullivan & Cromwell LLP

1888 Century Park East

Suite 2100

Los Angeles, CA  90067

Fax:  (310) 712-8800

 

and

 

22

 

Raymond B. Grochowski, Esq.

Latham & Watkins LLP

555 11th Street, N.W.

Suite 1000

Washington, D.C. 20004

Fax:  (202) 637-2201

 

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

 

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

 

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

 

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

 

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

 

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

 

13.9         Dispute Resolution.

 

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

 

23

 

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

 

For Bayer:                                       Executive
Vice President, Bayer HealthCare LLC 

and President, Biological Product Division

 

With a copy to:

 

Bayer HealthCare LLC

400 Morgan Lane

West Haven, CT  06516-4175

Attention:  General Counsel

 

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

 

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

 

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

 

24

 

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

 

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

 

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

 

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

 

{Remainder of this page has been intentionally left blank}

 

25

 

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

 

	
   

  	
  BAYER HEALTHCARE LLC

  
	
   

  	
  Biological Products Division – Berkeley
  Facility

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joseph A. Akers

  
	
   

  	
  Name:

  	
  Joseph A. Akers

  
	
   

  	
  Title:

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BAYER HEALTHCARE LLC

  
	
   

  	
  Biological Products Division – Berkeley
  Facility

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Keith R. Abrams

  
	
   

  	
  Name:

  	
  Keith R. Abrams

  
	
   

  	
  Title:

  	
  Assistant Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TALECRIS BIOTHERAPEUTICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lawrence D. Stern

  
	
   

  	
  Name:

  	
  Lawrence D. Stern

  
	
   

  	
  Title:

  	
  Executive Chairman, President and Chief Executive Officer

  

 

26

 

Exhibit Index

to

Supply Agreement

between

Bayer HealthCare LLC and Talecris
Biotherapeutics, Inc.

 

	
  Exhibit A

  	
   

  	
  Required Quantity

  
	
  Exhibit B

  	
   

  	
  PPF Forecast

  
	
  Exhibit C

  	
   

  	
  PPF Storage Specifications

  
	
  Exhibit D

  	
   

  	
  PPF Manufacturing Agreement

  
	
  Exhibit E

  	
   

  	
  PPF Specifications

  
	
  Exhibit F

  	
   

  	
  Price

  

 

 

EXHIBIT A

 

Required Quantity

 

	
  Calendar
  Year

  	
   

  	
  [***]

  	
   

  
	
  2004

  	
   

  	
  [***]

  	
   

  
	
  2005

  	
   

  	
  [***]

  	
   

  
	
  2006 through 2008

  	
   

  	
  [***]

  	
   

  

 

* Such quantities may be adjusted in accordance with Section 2.1

 ***
CONFIDENTIAL TREATMENT REQUESTED

 

 

Execution Copy

 

EXHIBIT B

 

2005 Product Forecast

 

	
  Month

  	
   

  	
  PPF Powder

  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Jan

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Feb

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mar

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Apr

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  May

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jun

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jul

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aug

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sep

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Oct

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Nov

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dec

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  [***]

  	
   

  

 

	
  Approved by 

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
  NewCo

  
	
   

  	
   

  
	
   

  	
   

  
	
  Approved by 

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
  Bayer

  

 

	
  Confidential Evaluation Material Subject to Confidentiality Agreement

  	
  Page 1 of 3

  

 

***CONFIDENTIAL TREATMENT REQUESTED

 

 

EXHIBIT B (Cont'd.)

 

2006 Product Forecast

 

	
  Month

  	
   

  	
  PPF Powder

  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jan

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Feb

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mar

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Apr

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  May

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jun

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jul

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aug

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sep

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Oct

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Nov

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dec

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  [***]

  	
   

  

 

 

	
  Approved by 

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
  NewCo

  
	
   

  	
   

  
	
   

  	
   

  
	
  Approved by 

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
  Bayer

  

 

	
   

  	
  Page 2 of 3

  

 

***CONFIDENTIAL TREATMENT REQUESTED

 

Execution Copy

 

EXHIBIT B (Cont'd.)

 

 

2007 Product Forecast

 

	
  Month

  	
   

  	
  PPF Powder

  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jan

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Feb

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mar

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Apr

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  May

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jun

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jul

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aug

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sep

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Oct

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Nov

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dec

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
  [***]

  	
   

  

 

	
  Approved by 

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
  NewCo

  
	
   

  	
   

  
	
   

  	
   

  
	
  Approved by 

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
  Bayer

  

 

	
  Confidential Evaluation Material Subject to Confidentiality Agreement

  	
  Page 3 of 3

  

 

***CONFIDENTIAL TREATMENT REQUESTED

 

Execution Copy

 

Exhibit C

PPF Storage Specifications

 

(PPF Powder Specification # 08633609)

 

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

 

	
  Confidential Evaluation Material Subject to Confidentiality Agreement

  	
  Page 1 of 1

  

 

1

 

Execution Copy

Page 1 of 3

Exhibit D

NewCo and Bayer HealthCare LLC, Berkeley

Manufacturing Agreement (PPF Powder)

 

MANUFACTURING AGREEMENT

 

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

 

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

 

NOW THEREFORE, it is agreed as follows:

 

1.               INTENT OF PARTIES

 

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

 

2.               MAINTENANCE OF PROPER RECORDS

 

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

 

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

 

3.               SPECIFICATIONS

 

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

 

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

 

	
  Confidential Evaluation Material Subject to Confidentiality Agreement

  	
   

  

 

 

 

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

 

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

 

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

 

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

 

4.              TERM

 

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

 

5.              WARNING

 

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

 

 

 

Execution Copy

Page 3 of 3

Exhibit D

NewCo and Bayer Healthcare LLC, Berkeley

Manufacturing Agreement (PPF Powder)

 

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

 

	
  TALECRIS BIOTHERAPEUTICS, INC.

  	
   

  	
  BAYER HEALTHCARE LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Responsible Head/Agent

  	
   

  	
   

  	
  Responsible Head/Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BAYER HEALTHCARE LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Responsible Head/Agent

  
							

 

	
  Confidential Evaluation Material Subject to Confidentiality Agreement

  	
   

  

 

 

 

Execution Copy

Exhibit E

 

	
  [LOGO]

  	
  Bayer Corporation

  
	
   

  	
  Pharmaceutical Division

  
	
   

  	
  Berkeley, CA 94710

  

 

	
  SPECIFICATION SHEET

  	
  Material No: 086333609 (Formerly 19-E613RP)

  
	
   

  	
   

  
	
  DISTRIBUTION

  	
  Title: PLASMA PROTEIN FRACTION POWDER

  
	
   

  	
   

  
	
  BERKELEY:

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

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

  D. Miller, QA Compliance, QA Library

  	
  Rev. No.: 003

  
	
   

  	
   

  
	
  CLAYTON:

  	
  S. Hudson

  	
  Date:    NOV 26 2002

  

 

1.               PURPOSE

 

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

 

2.               DESCRIPTION

 

2.1 Description: Plasma Protein Fraction Powder

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

 

3.               REQUIREMENTS

 

3.1         Plasma Screening - The
PPF powder must be manufactured from human plasma that meets the following
requirements:

3.1.1                        [***]
of the plasma must be collected from [***] licensed and approved centers. These
centers must also be [***] approved.

3.1.2                        [***]
of the plasma must be held for [***] prior to pooling.

3.1.3                        [***]
of the plasma must be [***] and [***].

3.1.4                        Plasma
Collection Test Requirements [***]

 

	
  Test

  	
   

  	
  Requirement

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  Non-reactive

  	
   

  
	
  [***]

  	
   

  	
  Negative

  	
   

  
	
  [***]

  	
   

  	
  Negative

  	
   

  
	
  [***]

  	
   

  	
  Non-reactive

  	
   

  
	
  [***]

  	
   

  	
  Negative

  	
   

  
	
  [***]

  	
   

  	
  Negative

  	
   

  
	
  [***]

  	
   

  	
  Negative

  	
   

  
	
  [***]

  	
   

  	
  Non-elevated

  	
   

  

 

	
  [***]

  	
   

  

 

3.1.5                            Plasma
Pool Test Requirements

 

	
  Test

  	
   

  	
  Requirement

  	
   

  
	
  [***]

  	
   

  	
  Negative

  	
   

  
	
  [***]

  	
   

  	
  Negative

  	
   

  
	
  [***]

  	
   

  	
  Non-reactive

  	
   

  
	
  [***]

  	
   

  	
  Negative

  	
   

  

 

***CONFIDENTIAL TREATMENT REQUESTED

 

1

 

Execution Copy

Page 2 of 3

Exhibit E

 

	
  SPECIFICATION SHEET

  	
  Material No: 08633609 (Formerly 19-E613RP)

  
	
   

  	
   

  
	
   

  	
  Title: PLASMA PROTEIN FRACTION POWDER

  
	
   

  	
   

  
	
   

  	
  Rev. No. :003

  

 

3.2 Powder Requirements 

 

	
  Test

  	
   

  	
  Requirement

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  

 

	
  Test

  	
   

  	
  Action Level

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  

 

	
  Manufacturing Parameter

  	
   

  	
  Action Level

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  

 

Notes:

1.               The
[***] level is determined by [***] monitoring equipment in [***] Manufacturing
and is recorded in the [***]. The test for [***] is not performed by [***].

2.               IMPORTANT:
If the action level for [***] is exceeded, the [***] Plant must perform an
action level excursion investigation. The investigation must be completed and
dispositioned prior to shipping the lot of PPF powder to the [***] Plant. A
copy of the Action Level Report must be provided along with the manufacturer
certifications described in section 4.1.

3.               Documentation
of the [***] must be provided.

 

4.               MANUFACTURER CERTIFICATION

 

4.1   For each lot delivered to Bayer, the
manufacturer must certify to the following requirements:

 

·      [***]
of the plasma was collected from [***] licensed and approved centers. These
centers must also be [***] approved.

·      [***]
of the plasma was held for [***] prior to pooling

·      [***]
of the plasma was [***] and [***]

·      [***]
of the plasma (i.e., [***] of individual donations) was tested for [***], and
[***], by [***] and found negative or non-elevated as specified in section
3.1.4.

·      Number
of unique plasma donors involved in the pools used to manufacture the lot of
powder

·      Results
for the tests specified in sections 3.1.4, 3.1.5, and 3.2

·      Lookback
information

·      Documents
any Discrepancy Events Reports issued to the lot

·      [***]
Action Level Report (if applicable)

 

5.               LABELING AND PACKAGING

 

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

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

 

	
   

  	
  Plasma Protein Fraction (Human) Powder

  
	
   

  	
  Gross Weight

  
	
   

  	
  Net Weight

  
	
   

  	
  Tare Weight

  
	
   

  	
  Lot No.

  
	
   

  	
  Date Manufactured

  

 

6.               SHIPPING

 

6.1                                 The
powder must be shipped in a temperature controlled truck at -20°C.

6.2                                 An
electronic temperature recording device such as a Temptale must be included
with each shipment.

 

***CONFIDENTIAL TREATMENT REQUESTED

 

2

 

Execution Copy

Page 3 of 3

Exhibit E

 

	
  SPECIFICATION SHEET

  	
  Material No: 08633609 (Formerly 19-E613RP)

  
	
   

  	
   

  
	
   

  	
  Title: PLASMA PROTEIN FRACTION POWDER

  
	
   

  	
   

  
	
   

  	
  Rev. No. :003

  

 

7.                                       INSPECTION

 

7.1                                 [***]
shall institute whatever sampling and testing deemed appropriate to confirm
vendor conformance with this purchase specification and may reject all or part
of a shipment of material based upon the results of this evaluation.

7.2                                 Critical
– [***] makes the lot discrepant

7.2.1        Failure
to provide Certificate of Analysis.

7.2.2        Failure
to meet the requirements specified in sections 3.1 and 3.2.

7.2.3        Temperature
recording device not included with shipment.

7.2.4        Shipping
temperature exceeded -20°C.

7.2.5        Poly
bags or plastic totes improperly identified.

 

	
   

  	
  APPROVED BY:

  	
  /s/ R. Hein 11/22/02

  	
   

  
	
   

  	
   

  
	
   

  	
  APPROVED BY:

  	
  /s/ D. Miller 11/05/02

  	
   

  
	
   

  	
   

  
	
   

  	
  APPROVED BY:

  	
  /s/ C. Maas 11/26/02

  	
   

  

 

***CONFIDENTIAL TREATMENT REQUESTED

 

3

 

EXHIBIT F

 

Price

 

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

 

***CONFIDENTIAL TREATMENT REQUESTED

 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}]]