Document:

Exhibit 10.31

 

Execution Copy

*** TEXT OMITTED AND SUBMITTED SEPARATELY

PURSUANT TO CONFIDENTIAL TREATMENT REQUEST

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

 

SUPPLY AGREEMENT

 

BY AND BETWEEN

 

BAYER HEALTHCARE LLC

BIOLOGICAL PRODUCTS DIVISION

BERKELEY, CALIFORNIA

 

AND

 

TALECRIS BIOTHERAPEUTICS, INC.

RALEIGH, NORTH CAROLINA

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
   

  	
  TERM OF AGREEMENT

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
  PURCHASE AND SALE OF PPF

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Volume
  Requirements

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.2

  	
   

  	
  Forecasts

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.3

  	
   

  	
  Purchase
  Orders

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.4

  	
   

  	
  Shipments

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.5

  	
   

  	
  Inventory
  Levels

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.6

  	
   

  	
  Cooperation
  of the Parties

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.7

  	
   

  	
  Meetings

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
  QUALITY AND SPECIFICATIONS

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Specifications

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.2

  	
   

  	
  Testing

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.3

  	
   

  	
  Acceptance

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.4

  	
   

  	
  Latent
  Defects

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.5

  	
   

  	
  Deviation
  Report

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.6

  	
   

  	
  Records

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  	
  PRICE AND PRICE ADJUSTMENT

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Price

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.2

  	
   

  	
  Adjustment
  to Price

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.3

  	
   

  	
  Price
  Adjustment Calculation

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
  BILLING AND PAYMENT

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  Payments

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.2

  	
   

  	
  Payment
  Disputes

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
  REGULATORY REQUIREMENTS

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Compliance
  with Regulations

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.2

  	
   

  	
  Audit

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.3

  	
   

  	
  Regulatory
  Filings

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.4

  	
   

  	
  Regulatory
  Approvals

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.5

  	
   

  	
  Onsite
  Personnel

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  	
  NONCONFORMING PRODUCT AND RECALLS

  	
   

  	
  9

  

 

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/ Kieth R. Abrams

  
	
   

  	
  Name:

  	
  Kieth R. Abrams

  
	
   

  	
   

  	
  Title:

  	
  Assistant Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TALECRIS BIOTHERAPEUTICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lawrence D. Stern

  
	
   

  	
  Name:

  	
  Lawrence D. Stern

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  
				

 

26

 

Exhibit Index

to

Supply Agreement

between

Bayer HealthCare LLC and Talecris
Biotherapeutics, Inc.

 

	
  Exhibit A

  	
   

  	
  Required Quantity

  
	
  Exhibit B

  	
   

  	
  PPF Forecast

  
	
  Exhibit C

  	
   

  	
  PPF Storage Specifications

  
	
  Exhibit D

  	
   

  	
  PPF Manufacturing Agreement

  
	
  Exhibit E

  	
   

  	
  PPF Specifications

  
	
  Exhibit F

  	
   

  	
  Price

  

 

 

EXHIBIT A

 

Required Quantity

 

	
  Calendar
  Year

  	
   

  	
  [***]

  	
   

  
	
  2004

  	
   

  	
  [***]

  	
   

  
	
  2005

  	
   

  	
  [***]

  	
   

  
	
  2006 through 2008

  	
   

  	
  [***]

  	
   

  

 

* Such quantities may be adjusted in accordance with Section 2.1

 ***
CONFIDENTIAL TREATMENT REQUESTED

 

 

Execution Copy

 

EXHIBIT B

 

2005 Product Forecast

 

	
  Month

  	
   

  	
  PPF Powder

  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Jan

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Feb

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mar

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Apr

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  May

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jun

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jul

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aug

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sep

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Oct

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Nov

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dec

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  [***]

  	
   

  

 

	
  Approved by 

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
  NewCo

  
	
   

  	
   

  
	
   

  	
   

  
	
  Approved by 

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
  Bayer

  

 

	
  Confidential Evaluation Material Subject to Confidentiality Agreement

  	
  Page 1 of 3

  

 

***CONFIDENTIAL TREATMENT REQUESTED

 

 

EXHIBIT B (Cont'd.)

 

2006 Product Forecast

 

	
  Month

  	
   

  	
  PPF Powder

  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jan

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Feb

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mar

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Apr

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  May

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jun

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jul

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aug

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sep

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Oct

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Nov

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dec

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  [***]

  	
   

  

 

 

	
  Approved by 

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
  NewCo

  
	
   

  	
   

  
	
   

  	
   

  
	
  Approved by 

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
  Bayer

  

 

	
   

  	
  Page 2 of 3

  

 

***CONFIDENTIAL TREATMENT REQUESTED

 

Execution Copy

 

EXHIBIT B (Cont'd.)

 

 

2007 Product Forecast

 

	
  Month

  	
   

  	
  PPF Powder

  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jan

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Feb

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mar

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Apr

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  May

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jun

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jul

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Aug

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sep

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Oct

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Nov

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dec

  	
   

  	
   

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
   

  	
  [***]

  	
   

  

 

	
  Approved by 

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
  NewCo

  
	
   

  	
   

  
	
   

  	
   

  
	
  Approved by 

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
  Bayer

  

 

	
  Confidential Evaluation Material Subject to Confidentiality Agreement

  	
  Page 3 of 3

  

 

***CONFIDENTIAL TREATMENT REQUESTED

 

Execution Copy

 

Exhibit C

PPF Storage Specifications

 

(PPF Powder Specification # 08633609)

 

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

 

	
  Confidential Evaluation Material Subject to Confidentiality Agreement

  	
  Page 1 of 1

  

 

1

 

Execution Copy

Page 1 of 3

Exhibit D

NewCo and Bayer HealthCare LLC, Berkeley

Manufacturing Agreement (PPF Powder)

 

MANUFACTURING AGREEMENT

 

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

 

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

 

NOW THEREFORE, it is agreed as follows:

 

1.               INTENT OF PARTIES

 

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

 

2.               MAINTENANCE OF PROPER
RECORDS

 

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

 

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

 

3.               SPECIFICATIONS

 

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

 

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

 

	
  Confidential Evaluation Material Subject to Confidentiality Agreement

  	
   

  

 

 

 

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

 

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

 

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

 

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

 

4.              TERM

 

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

 

5.              WARNING

 

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

 

 

 

Execution Copy

Page 3 of 3

Exhibit D

NewCo and Bayer Healthcare LLC, Berkeley

Manufacturing Agreement (PPF Powder)

 

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

 

	
  TALECRIS BIOTHERAPEUTICS, INC.

  	
   

  	
  BAYER HEALTHCARE LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
  Responsible Head/Agent

  	
   

  	
   

  	
  Responsible Head/Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BAYER HEALTHCARE LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Responsible Head/Agent

  
							

 

	
  Confidential Evaluation Material Subject to Confidentiality Agreement

  	
   

  

 

 

 

Execution Copy

Exhibit E

 

	
  [LOGO]

  	
  Bayer Corporation

  
	
   

  	
  Pharmaceutical Division

  
	
   

  	
  Berkeley, CA 94710

  

 

	
  SPECIFICATION SHEET

  	
  Material No: 086333609 (Formerly 19-E613RP)

  
	
   

  	
   

  
	
  DISTRIBUTION

  	
  Title: PLASMA PROTEIN FRACTION POWDER

  
	
   

  	
   

  
	
  BERKELEY:

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

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

  D. Miller, QA Compliance, QA Library

  	
  Rev. No.: 003

  
	
   

  	
   

  
	
  CLAYTON:

  	
  S. Hudson

  	
  Date:    NOV 26 2002

  

 

1.               PURPOSE

 

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

 

2.               DESCRIPTION

 

2.1 Description: Plasma Protein Fraction Powder

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

 

3.               [***]

 

[***]

[***]

[***]

[***]

[***]

 

	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  

 

[***]

 

[***]

 

	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  
	
   

  	
  [***]

  	
   

  	
  [***]

  

 

***CONFIDENTIAL TREATMENT REQUESTED

 

1

 

Execution Copy

Page 2 of 3

Exhibit E

 

	
  SPECIFICATION SHEET

  	
  Material No: 08633609 (Formerly 19-E613RP)

  
	
   

  	
   

  
	
   

  	
  Title: PLASMA PROTEIN FRACTION POWDER

  
	
   

  	
   

  
	
   

  	
  Rev. No. :003

  

 

[***]

 

	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  

 

	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  

 

	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  

 

[***]

                        [***]

                        [***]

                        [***]

 

4.               [***]

 

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

 

5.               LABELING AND PACKAGING

 

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

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

 

	
   

  	
  Plasma Protein Fraction (Human) Powder

  
	
   

  	
  Gross Weight

  
	
   

  	
  Net Weight

  
	
   

  	
  Tare Weight

  
	
   

  	
  Lot No.

  
	
   

  	
  Date Manufactured

  

 

6.               [***]

 

[***]

[***]

 

***CONFIDENTIAL TREATMENT REQUESTED

 

2

 

Execution Copy

Page 3 of 3

Exhibit E

 

	
  SPECIFICATION SHEET

  	
  Material No: 08633609 (Formerly 19-E613RP)

  
	
   

  	
   

  
	
   

  	
  Title: PLASMA PROTEIN FRACTION POWDER

  
	
   

  	
   

  
	
   

  	
  Rev. No. :003

  

 

7.               [***]

 

[***]

[***]

[***]

[***]

[***]

[***]

[***]

 

	
   

  	
  APPROVED BY:

  	
  /s/ R. Hein 11/22/02

  	
   

  
	
   

  	
   

  
	
   

  	
  APPROVED BY:

  	
  /s/ D. Miller 11/05/02

  	
   

  
	
   

  	
   

  
	
   

  	
  APPROVED BY:

  	
  /s/ C. Maas 11/26/02

  	
   

  

 

***CONFIDENTIAL TREATMENT REQUESTED

 

3

 

EXHIBIT F

 

Price

 

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

 

***CONFIDENTIAL TREATMENT REQUESTED

 

4Exhibit
10.33

 

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

 

 

 

 

MANUFACTURING
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

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
  CUSTOM
  MANUFACTURING SERVICES

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  2.1

  	
  Volume Requirements

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  2.2

  	
  Manufacturing Services

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  2.3

  	
  Supply of Inputs

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  
	
  2.4

  	
  Product Supply Forecasts

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  2.5

  	
  Manufacturing of the Products

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  
	
  2.6

  	
  Yield

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  
	
  2.7

  	
  Samples

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  2.8

  	
  Testing

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  2.9

  	
  Order and Availability

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  
	
  2.10

  	
  Shipments

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  2.11

  	
  Contract Review and Onsite Personnel

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  2.12

  	
  Bayer Processing

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  2.13

  	
  Risk of Loss

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  2.14

  	
  Debarment

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  2.15

  	
  Cooperation of the Parties

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  2.16

  	
  Records

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  3

  	
  PRICE AND
  PAYMENT

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  3.1

  	
  Charge for Manufacturing Services

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  3.2

  	
  Adjustment to Prices

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  3.3

  	
  Price Adjustment Calculation

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  3.4

  	
  Payments

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  3.5

  	
  Payment Disputes

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  4

  	
  EARLY
  TERMINATION

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  4.1

  	
  Termination for Cause

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  4.2

  	
  Effect of Termination

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  
	
  4.3

  	
  Remedies

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  4.4

  	
  Survival

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  5

  	
  COMPLIANCE

  	
   

  	
  10

  

 

 

 

	
   

  	
   

  	
   

  	
   

  
	
  5.1

  	
  Compliance with Regulations

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  5.2

  	
  Audit

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  5.3

  	
  Regulatory Filings

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  5.4

  	
  Regulatory Approvals

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  6

  	
  NONCONFORMING
  PRODUCT AND RECALLS

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  6.1

  	
  Nonconforming Product

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  6.2

  	
  General Requirements

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  6.3

  	
  Distribution and Use Records

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  6.4

  	
  Adverse Events

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  6.5

  	
  Customer Notification of Adverse Reactions

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  6.6

  	
  Withdrawals and Recalls

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  6.7

  	
  Customer Complaints

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  6.8

  	
  Responsibility

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  6.9

  	
  Deviation Report

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  7

  	
  CONFIDENTIALITY

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  7.1

  	
  Confidentiality Obligations

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  7.2

  	
  Exceptions

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  7.3

  	
  Term of Obligations

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  8

  	
  WARRANTIES
  AND COVENANTS

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  8.1

  	
  General

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  8.2

  	
  Intellectual Property

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  8.3

  	
  Representations and Warranties

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  9

  	
  INDEMNITIES
  AND DAMAGES

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  9.1

  	
  Indemnifications

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  9.2

  	
  Indemnification Process

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  9.3

  	
  Insurance

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  9.4

  	
  Liquidated Damages For Failure To Deliver
  Products

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  9.5

  	
  Insurance Recoveries

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  9.6

  	
  Aggregate Caps

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  10

  	
  DISCLAIMER

  	
   

  	
  23

  
					

 

ii

 

	
  ARTICLE
  11

  	
  FORCE
  MAJEURE

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  12

  	
  MISCELLANEOUS

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  12.1

  	
  Consent to Assignment

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  12.2

  	
  Entire Agreement and Amendments

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  12.3

  	
  Notices

  	
   

  	
  25

  
	
   

  	
   

  	
   

  	
   

  
	
  12.4

  	
  Independent Contractor

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  12.5

  	
  Non-Waiver

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  12.6

  	
  Choice of Law

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  12.7

  	
  Captions

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  12.8

  	
  Severability

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  12.9

  	
  Dispute Resolution

  	
   

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  12.10

  	
  Defined Terms

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  12.11

  	
  Set-Off

  	
   

  	
  28

  

 

iii

 

MANUFACTURING AGREEMENT

 

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

 

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

 

WHEREAS, Purchaser desires to engage Bayer as a custom manufacturer of
Column Eluate and ATM (the “Products”) at its facility located at Berkeley,
California (“Bayer
Facility”) processing Fraction IV-I and PEG Paste (the “Inputs”) supplied by
Purchaser;

 

WHEREAS, Purchaser will, upon receipt of Column Eluate from Bayer,
further process and purify the Column Eluate into an injectable therapeutic
product (“Prolastin”);

 

WHEREAS, Purchaser will engage in the marketing, sale, storage, and
distribution of ATIII and Prolastin; and

 

WHEREAS, Purchaser and Bayer wish to set forth their mutual agreements
and understandings regarding the manufacture of the Products by Bayer on behalf
of Purchaser. -

 

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

This Agreement shall have an initial term commencing on the Effective
Date and terminating on December 31, 2006 (“Initial Term”) unless earlier terminated
as provided in Article 4 below. The Initial Term may be renewed for two one (1)
year periods at the option of Purchaser (each, an “Extended Term”), and
thereafter for one additional one (1) year period upon the terms and conditions
set forth below (“Final
Term”). Purchaser shall give Bayer at least nine (9) months’
written notice prior to the end of the then expiring term as to each of the
Extended Terms, and shall give Bayer at least twelve (12) months’ written
notice prior to the end of the second Extended Term as to a proposed Final
Term. The Initial Term, each Extended Term and the Final Term shall
collectively constitute the “Term”. As promptly as practicable after Purchaser gives
notice of the Final Term, Bayer shall within ninety (90) days of such notice
advise Purchaser of the price calculation, subject to adjustment under Article
3 and subject to reflecting the full costs of operating the facility solely for
the purpose of manufacturing the Products. The Parties shall then engage in
good faith negotiations for a period of three (3) months. If the Parties cannot
reach an agreement to adjust the Price within such three (3) month period, then
Purchaser shall not have the option to extend for such Final Term.

 

 

ARTICLE 2 CUSTOM
MANUFACTURING SERVICES

2.1           Volume
Requirements. With respect to each calendar year during the Initial Term,
Bayer shall make available to Purchaser, and Purchaser may purchase from Bayer,
Column Eluate and ATIII in the quantities set forth in Exhibit A, attached hereto and
incorporated herein by reference (which conform to the Product Specifications
(as defined in Section 2.2 below)) (as adjusted herein, the “Column Eluate Required Quantity”
and the “ATIII Required
Quantity”, respectively, and collectively, the “Required Quantity”).
Upon providing a notice of renewal for the Extended Term in accordance with
Article 1, Purchaser shall amend Exhibit A
to set forth the amount of Products that Bayer shall make available to
Purchaser and that Purchaser may purchase from Bayer during the Extended Term;
provided that, the Column Eluate Required Quantity cannot exceed one hundred
twenty percent (120%) of that amount shown on Exhibit A then in effect on the date the notice of renewal
is provided and the ATIII Required Quantity cannot exceed that amount set forth
on Exhibit A in effect as
of the Effective Date. Subject to the other provisions contained herein,
including without limitation, Section 2.4 below, in each. calendar year during
the Term of this Agreement, Purchaser may request in its sole discretion, and
Bayer shall supply, (a) a minimum of seventy-five percent (75%) of the Column
Eluate Required Quantity and a maximum of one hundred fifteen percent (115%) of
the Column Eluate Required Quantity; and (b) a maximum of [***] vials of ATIII (each as determined
after deducting quantities representing Nonconforming Product (as defined in
Section 6.1 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. For each calendar year during the Term, Purchaser shall make available
to Bayer that quantity of Inputs meeting the Input Specifications (each as
defined in Section 2.3 below) necessary for Bayer-to manufacture each Binding
Production Forecast as set forth .in Section 2.4 (“Required Inputs”). In
the event that Purchaser provides less than one hundred percent (100%) of the
Required Inputs, then the Binding Production Forecast shall be adjusted to
reflect the supply of Inputs provided by Purchaser to Bayer. Notwithstanding
the foregoing, in no event shall Purchaser provide in each calendar year of the
Term (other than the Final Term) (a) less than seventy-five percent (75%) of
the Required Inputs and (b) less than [***]
kilograms of Fraction IV-I Paste manufactured by Purchaser at the Purchaser’s
Facility (the “Minimum
Bayer IV-I Paste Requirement”) (each as determined after
deducting quantities representing Nonconforming Inputs (as defined in Section
6.1 below)).

 

2.2           Manufacturing
Services. During the Term of this Agreement, Bayer shall process the Inputs
provided by Purchaser into the Products (the “Manufacturing Services”). The Column
Eluate supplied by Bayer shall meet the specifications set forth in Exhibit B and the ATIII supplied by
Bayer shall meet the specifications set forth in Exhibit C,
each such exhibit as attached hereto and incorporated herein by reference, and
each of which may be amended from time-to-time by mutual written agreement of
the Parties (the “Product
Specifications”). The Product Specifications in effect as of the
date hereof are those that were in effect as of the date of execution of the
Contribution Agreement.

 

2.3           Supply
of Inputs. Subject to the terms and conditions of this Agreement, during
the Term, Purchaser shall supply to Bayer Fraction IV-I Paste meeting the
specifications set forth in Exhibit D
and PEG Paste meeting the specifications set forth in Exhibit E each such exhibit as attached
hereto and incorporated herein by reference, and each of which may be amended
from 

 

***CONFIDENTIAL TREATMENT REQUESTED

 

2

 

time-to-time by mutual written agreement of the Parties, and such other
specifications and requirements as set forth in the Manufacturing Agreements
attached hereto as Exhibits F and G, as applicable (collectively, the “Input Specifications”),
at such times and in such amounts, as is required for Bayer to process and
supply the Products in accordance with the Binding Production Forecasts (as
defined in Section 2.4 below). In providing that volume of Required Inputs
meeting those requirements set forth in Section 2.1 above, unless otherwise
agreed in writing by the Parties, Purchaser shall during each calendar. year of
the Term of this Agreement supply Bayer with Inputs (including the Minimum
Bayer IV-I Paste Requirement) in such amounts as is necessary for Bayer to process
amounts of ATIII and Column Eluate reflected in the Binding Production
Forecasts, Purchaser shall maintain at the Bayer Facility an inventory of
Fraction IV-I Paste manufactured by Purchaser at Purchaser’s Facility, and
meeting the Input Specifications, equal to [***]
kilograms, to be used by Bayer in the production of the Products. The Inputs
supplied by Purchaser shall be deemed at all times to be the property of
Purchaser. Bayer shall be responsible for all Inputs while such Inputs are in
Bayer’s possession at the Bayer Facility. Purchaser shall be responsible for
arranging the shipment of the Inputs from the facility located in Clayton,
North Carolina (“Purchaser’s
Facility”).

 

2.4           Product
Supply Forecasts. Upon the Effective Date, Purchaser shall provide Bayer
with a twelve (12) month rolling forecast of Purchaser’s estimated production
and supply needs for each of the Products by calendar month (the “Production Forecast”).
Such Production Forecast of Purchaser’s future requirements, as may be revised
from time to time, shall be attached hereto as Exhibit A, and incorporated herein by reference. Purchaser
shall provide an updated twelve (12) month rolling Production Forecast on or
about the commencement of each calendar month. The first six (6) months of each
rolling twelve (12) month forecast for Column Eluate shall be binding (the “Column Eluate Binding Production
Forecast”), and the last six (6) months of the Column Eluate
rolling, forecast shall be good faith estimates and shall not be binding on the
Parties. The first six (6) months of each rolling twelve (12) month forecast
for ATIII shall be binding (the “ATIII Binding Production Forecast” and
together with the Column Eluate Binding Production Forecast, the “Binding Production Forecast”),
and the last six (6) months of ATIII rolling forecast shall be good faith
estimates and shall not be binding on the Parties. In each calendar year, the
aggregate Binding Production Forecasts for such period shall equal at least
seventy-five percent (75%) of the Column Eluate Required Quantity and at least
one hundred percent (100%) of the ATIII Required Quantity. In the event that
the actual Products requested by Purchaser (as determined based on Orders (as
defined in Section 2.9 below) placed by Purchaser for Products meeting the
Product Specifications in accordance with Section 2.9 below) are less than
those set forth in a Binding Production Forecast, the Parties agree and
acknowledge that Purchaser nonetheless shall be obligated to pay for the
Products set forth in such Binding Production Forecast at the prices set forth
in Section 3.1, as may be revised from time to time.

 

2.5           Manufacturing
of the Products. Bayer shall manufacture, process, store, distribute, test,
transport, dispose, deliver and otherwise handle the Products and the Inputs at
all times in full compliance with, as applicable, cGMPs (as defined in Section
5.1), other Regulations (as defined in Section 5.1), the Product
Specifications, the Manufacturing Agreement (for manufacturing Fraction IV-I/PEG
Paste into the Column Eluate), attached hereto as Exhibit F and incorporated herein by reference, the
Manufacturing Agreement (for manufacturing Fraction IV-I Paste into ATIII),
attached hereto as Exhibit G
and incorporated herein by reference, and the SOPs (as 

 

***CONFIDENTIAL TREATMENT REQUESTED

 

3

 

defined in Section 2.13). The Manufacturing Agreements for
manufacturing Fraction IV-I/PEG Paste into the Column Eluate and Fraction IV-I
Paste into ATM shall be renewed annually, consistent with the Term of this
Agreement, with each such renewal deemed attached hereto as Exhibit F and Exhibit G, respectively, and
incorporated herein by reference. In the event of a conflict between the
provisions of this Agreement and the provisions of either of the Manufacturing
Agreements, the provisions of this Agreement shall prevail. Bayer shall
maintain all records as are necessary and appropriate to demonstrate compliance
with cGMPs and the Regulations. In no event shall any change to the batch
production records be implemented until Bayer has received written approval
from Purchaser which approval will not be unreasonably withheld. Bayer shall
make no changes in the production equipment, production procedures, or testing
methods existing as of the date of this Agreement. without providing reasonable
notice to Purchaser in advance of the change and obtaining Purchaser’s prior
written consent which consent will not be unreasonably withheld.

 

2.6           Yield.
The standard expected yield of Products based on kilograms and potency of the
Inputs and alpha-1 potency (“Expected Yield”), and the calculation method used to
determine such Expected Yield, shall be set forth on Exhibit H, which shall be attached
hereto and incorporated herein by reference (the “Yield Calculation”). The actual yield of
Column Eluate (“Actual
Yield”) and the Expected Yield shall be reconciled by Bayer
quarterly within thirty (30) days of each January 1, April 1, July 1 and
October 1, and the results thereof shall be promptly reported to Purchaser.
Upon mutual agreement of the Parties, the Expected Yield shall be appropriately
adjusted. As soon as practicable following the Effective Date, the Parties
shall mutually agree upon, in writing, the effect that any variance between
Expected Yield and Yield Calculation may have on price.

 

During any rolling four quarter period of the Term, if the Actual Yield
fails to meet the Expected Yield, then Bayer shall compensate Purchaser for
that amount of Inputs used in the processing attributable to the lower yield,
and if the Actual Yield exceeds the Expected Yield, then Purchaser shall
compensate Bayer for that amount of Inputs used in processing attributable to
the higher yield, in each case at a rate of one hundred fifteen percent (115%)
of the Input Replacement Value (as defined in Section 2.13) per kilogram of
Inputs.

 

[***]

 

Without limiting the foregoing, Purchaser may at its election provide
additional Inputs to Bayer to compensate for any variance between Expected Yield
and Actual Yield so that Products may be processed in amounts meeting the
quantity specified in the Binding Production Forecast; provided, however, that
any election by Purchaser not to provide such additional Inputs shall operate
to waive Purchaser’s rights under Section 9.4.

 

If Purchaser fails to provide Inputs which constitute Required Inputs
and which meet the Input Specifications for any reason (including Force
Majeure), then Bayer shall not be responsible for meeting the Expected Yield
computed pursuant to this Section 2.6 for as long as such failure continues and
for a period of forty-five (45) days after Purchaser resumes providing Inputs
which constitute Required Inputs and which meet Input Specifications. If
Purchaser does not provide Inputs which 

 

***CONFIDENTIAL TREATMENT REQUESTED

 

4

 

constitute Required Inputs and which meet the Input Specifications for
any reason, including Force Majeure, for a consecutive period of six (6)
months, then the Parties shall negotiate in good faith for a period of three
(3) months to amend this Agreement as to direct costs of Bayer as a result of
Inputs that do not constitute Required Inputs or do not meet Input
Specifications. If the Parties are unable to reach agreement to amend this
Agreement during the Initial Term, then the matter shall be resolved in
accordance with Section 12.9. If the Parties are unable to reach agreement to
amend this Agreement during any term after the Initial Term, then Bayer may, at
its sole option, terminate this Agreement for cause pursuant to Section 4.1
hereof.

 

2.7           Samples.
Bayer shall provide to Purchaser adequate samples of ATIII prior to the
shipment of ATIII (“Product
Samples”) and Purchaser shall provide to Bayer adequate samples
of the Inputs along with the shipment of Inputs (“Input Samples,” together with the
‘Product Samples, the “Samples”)
for testing by Purchaser and Bayer, respectively, to determine the Samples’
compliance with the Product Specifications or Input Specifications, as
applicable. Bayer and Purchaser shall supply the other Party with Samples
according to a schedule (as may be amended from time to time) to be mutually
agreed upon by the Parties in writing. Each of Purchaser and Bayer shall use
its commercially reasonable efforts to test the Samples within a period of
twenty (20) days. from such Party’s receipt of such Samples. The Parties shall
use commercially reasonable efforts to expedite the testing of such Samples.
Notwithstanding the foregoing, if after accepting a shipment of Products or
Inputs, Purchaser or Bayer, respectively, subsequently discovers latent defects
(including without limitation, nonconformance with Product Specifications or
Input Specifications, as applicable) attributable to the other Party’s
performance under this Agreement not reasonably discoverable at the time of
delivery, such Party may revoke its acceptance of such shipment of Products or
Inputs, respectively, by giving written notice to the other Party as soon as
practicable after discovering such defects, and in such event, such Products or
Inputs shall be considered Nonconforming Products or Nonconforming Inputs, as
the case may be, and the provisions of Section 6.1 below shall apply.

 

2.8           Testing.
With respect to each shipment of Products to be shipped to Purchaser, Bayer
shall test such Products to ensure compliance with the Product Specifications.
Bayer shall include a certificate of analyses with each shipment of Products
disclosing the results of such testing and showing conformance with the Product
Specifications.

 

2.9           Order
and Availability. Purchaser shall place an order for Products reflecting
the aggregate amount of Products in the initial Binding Production Forecast
once Purchaser has determined, based on applicable test results obtained by it,
that the relevant Product Samples have met the Product Specifications. With
each subsequent Binding Production Forecast, Purchaser shall deliver an order
reflecting the aggregate Column Eluate ordered for the sixth month of the Column
Eluate Binding Production Forecast and the aggregate ATIII ordered for the
sixth month of the ATIII Binding Production Forecast (in each case, an “Order”). The Orders
shall specify delivery dates for the Products. Shipments of Products shall be
scheduled by the Parties consistent with the Orders and the Binding Production
Forecasts. The Parties shall cooperate to ensure that the Products to be
purchased by Purchaser are ordered, and the Inputs to be provided by Purchaser
are provided, in a manner so as to allow Bayer to produce such Products
efficiently, without material swings in volume over. the course of any twelve
(12) month period. The Parties shall cooperate to match the batch size of the
Orders with the Inputs 

 

5

 

provided by Purchaser, taking into consideration, without limitation,
Bayer’s normal production lot size.

 

2.10         Shipments.
Subject to an adequate supply of Required Inputs being supplied by Purchaser
(pursuant to Sections 2.1 and 2.3 herein), Bayer agrees that it shall provide
Products in conformity with the delivery schedule provided by Purchaser to meet
those Orders issued by Purchaser, provided that in no event shall Bayer be
required to provide Products in excess of any Binding Production Forecast.
Unless otherwise agreed by the Parties, provided that Purchaser timely provides
the Inputs and places the Orders, time is of the essence for the delivery of
Products in accordance with the Orders. Bayer shall include copies of
production records with each shipment. Purchaser shall be responsible for
making all necessary shipping arrangements for Inputs and Products. Risk of
loss for the Inputs and Products in transit shall lie with Purchaser. All
Inputs and Products shall be delivered F.O.B. Bayer Facility. All financial
arrangements for shipping and handling of Inputs and Products shall be the
responsibility of Purchaser.

 

2.11         Contract
Review and Onsite Personnel. Commencing as soon as practicable following
the Effective Date and thereafter on or about the first day of each month
during the Term, the manufacturing representative of each Party shall hold
contract review meetings, in person or via telephone, to discuss yields,
Product delivery schedules, quality issues, and other issues pertinent to this
Agreement. At least three (3) business days prior to each monthly meeting, each
Party shall deliver to the other Party a written report regarding the issues to
be discussed at such meeting. In addition to the monthly meetings, a senior
manager of each Party shall meet (either in person or via telephone) on a
quarterly basis and hold informal discussions on a weekly basis regarding each
Party’s progress with respect to this Agreement. At the expense of Purchaser,
Purchaser shall be entitled, in its sole discretion, to have a designated
employee (which designated employee may be different persons from time to time)
of Purchaser present at the Bayer Facility for the purposes of monitoring the
Manufacturing Services and quality control of the Products. Such designated
employee shall (a) have access to all areas of the Bayer Facility relating to
Manufacturing Services, (b) comply with all safety and health laws,
regulations, policies and procedures applicable to personnel of Bayer at the
Bayer Facility and (c) remain an employee of Purchaser and continue to receive
all compensation and benefits directly from Purchaser or its affiliates.
Notwithstanding anything to the contrary in the foregoing, the presence of a
Purchaser designated employee at the Bayer Facility and any action taken by
such employee in no way impairs or waives any right or remedy Purchaser may
otherwise have pursuant to the terms of this Agreement.

 

2.12         Bayer
Processing. Bayer shall process the Inputs on a first in-first out basis to
the extent possible.

 

2.13         Risk
of Loss. The Parties agree that Purchaser shall bear the risk of loss for
Inputs until the shipment is received in acceptable condition in accordance
with Purchaser’s Standard Operating Procedures (as in effect as of the Effective
Date and amended from time to time upon mutual agreement, and any replacements
or successors thereto, “SOPs”)
from the common carrier at the Bayer Facility. The risk of loss for the Inputs
shall be borne by Bayer after the shipment of the Inputs is delivered to
Bayer’s Facility by the common carrier and until delivery of Products is
tendered to Purchaser through the placement of the Products in the care,
custody 

 

6

 

and control of a common carrier under contract to Purchaser for
transporting to the Purchaser’s Facility or such other location designated by
Purchaser. Unless the Parties enter into a separate agreement obligating Bayer
to provide storage for the Products, Purchaser shall bear the risk of loss for
the Products after the Products are placed in the custody of the common carrier
at the Bayer Facility. In the event of the loss of any Inputs provided by
Purchaser for the production of the Products while in Bayer’s possession, which
is non-recoverable by rework or which results in the loss of the Products in
process or to be processed from such lost Inputs (a “Catastrophic Loss”),
Bayer shall compensate Purchaser for the damages attributable to the
Catastrophic Loss equal to [***]
per kilogram as adjusted pursuant to Section 3.2 hereof (the “Input Replacement Value”)
of the Inputs, for the Inputs so lost. Any Catastrophic Loss shall not be used
in the determination of Actual Yields.

 

2.14         Debarment.
Bayer 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 at 21 USC 335a(a) or (b). Bayer agrees to notify
Purchaser promptly in the event any person providing services to Bayer under
the scope of this Agreement is debarred or becomes subject to debarment.

 

2.15         Cooperation
of the Parties. Purchaser shall inform Bayer promptly of any problems that
could reasonably be expected to prevent Purchaser from providing timely
deliveries of the Inputs to Bayer for process in accordance with this Article
2. Similarly, Bayer shall inform Purchaser promptly of any problems that could
reasonably be expected to prevent Bayer from processing the Inputs for the
production of the Products. The Parties shall cooperate in resolving such
problems relating to the manufacture and supply of the Products under this
Agreement. In recognition of the fact that Purchaser’s business is dynamic and
evolving based on market demand, regulatory approvals and other factors, Bayer
shall in good faith, but subject to the terms of this Agreement, use
commercially reasonable efforts to seek to accommodate any reasonable request
by Purchaser to manufacture quantities of Products in excess of Bayer’s
obligations hereunder; provided, however, that Bayer 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 the Bayer Facility and the Purchaser’s
Facility, which coordination could include making temporary changes to the
Binding Production Forecast. For purposes of clarification, this Section 2.15
does not diminish or expand the Parties’ respective obligations to supply and
purchase Products in accordance with any Binding Production Forecast set forth
in Section 2.4.

 

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

 

ARTICLE 3 PRICE AND PAYMENT

3.1           Charge
for Manufacturing Services. During the Term of this Agreement, Purchaser
shall pay the applicable price for the Products set forth in Exhibit I, attached hereto and
incorporated herein by reference, as may be adjusted from time to time pursuant
to Section 3.2. The price of 

 

***CONFIDENTIAL TREATMENT REQUESTED

 

7

 

the Products shall be F.O.B. Bayer Facility. All payments hereunder
shall be made in U.S. dollars.

 

3.2           Adjustment
to Prices. (i) The prices for the Products provided by Bayer to Purchaser
shall be adjusted annually on October 1 or as soon thereafter as possible with
respect to the Products to be provided in each immediately following calendar
year during the Term based on the assumption that the Term commences during
calendar year 2004.  In each case, such
adjustment to the prices (“Price Adjustments”)
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.

 

(ii)           The
price shall be further subject to adjustment in accordance with Sections 5.4
and 8.1.

 

3.3           Price
Adjustment Calculation. On October 1st of each calendar year or
as soon thereafter as possible, Bayer shall provide for Purchaser’s review and
approval the computation of the Price Adjustment (as determined in accordance
with Section 3.2(i) 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.

 

3.4           Payments.
Bayer shall deliver to Purchaser at the address set forth in Section 12.3 an
invoice for shipments of Products to Purchaser as, the same is shipped. Each
invoice shall reflect the actual quantity of the Products shipped and the price
thereof as computed in accordance with Section 3.1, The amount invoiced by
Bayer and payable by Purchaser during each Binding Production Forecast period
will not be less than that charge associated with the Binding Production
Forecast as computed in accordance with Section 3.1, unless the actual amount
of Products delivered is less than the Binding Production Forecast due to
Bayer’s failure to perform its obligations under this Agreement. Within thirty
(30) days following receipt of each invoice, Purchaser shall pay to Bayer the
amount specified in such invoice.

 

3.5           Payment
Disputes. All billing and payment disputes between the Parties shall be
resolved in accordance with Section 12.9 below.

 

ARTICLE 4 EARLY TERMINATION

4.1           Termination
for Cause. If either Party commits a substantial violation of any material
provision of the Agreement (which means (i) in the case of Purchaser,
nonpayment of amounts owing to Bayer in accordance with Section 3.4, failure to
supply Inputs as provided in Section 2.6, or any other material breach by
Purchaser of any representation, warranty, covenant or performance obligation
under this Agreement and (ii) in the case of Bayer, any material breach of any
representation, warranty, covenant or performance obligation under this
Agreement (other than breach of its obligation to deliver Products under this
Agreement, any such breach to be governed exclusively under Section 9.4
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 

 

8

 

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 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.

 

Other Termination Provisions. By Bayer if
Purchaser or by Purchaser 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 in the foregoing, no Party
shall take or cause to be taken any action relating to the voluntary
liquidation or dissolution of such Party.

 

4.2           Effect
of Termination. In the event of termination of this Agreement, (i) Purchaser
shall immediately cease delivery of all Inputs under this Agreement, (ii) Bayer
shall promptly cease production of the Products and shall deliver any Products
manufactured prior to the effective date of termination but not yet delivered,
(iii) Bayer shall prepare and submit to Purchaser an invoice for all Products
shipped by Bayer to Purchaser which at the time of the effective date of
termination were not paid for by Purchaser, and (iv) Bayer shall return to
Purchaser all Inputs that are in Bayer’s possession or en route to Bayer at the
time of such termination which return shall be at the sole cost and expense of
the Party whose breach of this Agreement resulted in the termination of the
Agreement. Purchaser shall within thirty (30) days following receipt of the
invoice referred to in subclause (iii) of this Section 4.3 pay the full amount
of such invoice and all other sums owed to Bayer; provided, however, that if
the aggregate total of the Orders placed by Purchaser prior to the effective
date of such termination does not meet the Required Quantity for the then
current calendar year and in the event that Bayer terminates this Agreement in 

 

9

 

accordance with Section 4.1 due to Purchaser’s breach hereof, Purchaser
shall be obligated to pay amounts associated with the Products to be delivered
under the then current Binding Production Forecast and, at Purchaser’s sole
discretion, Bayer shall be obligated to deliver such Products.

 

4.3           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 4. 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 limited to the remedy of specific
performance.

 

4.4           Survival.
In the event of any termination or expiration of this Agreement, each of the
provisions of Articles 6, 7, 8, 9, 10, 11, 12 and Sections 2.5, 2.6, 2.7, 2.8,
2.10, 2.13, 2.14, 2.16, 3.5, 4.1, 4.3, 4.4, 4.5, 5.1, 5.3 and 5.4 shall survive
as long as any such provision remains applicable, provided that Article 9 shall
survive indefinitely, unless a shorter period for survival is provided in any
such Article or Section.

 

ARTICLE 5 COMPLIANCE

5.1           Compliance
with Regulations. In the performance of its obligations under this
Agreement, each Party 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, current Good Manufacturing Practices (“cGMPs”) as defined in
national and international 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, the “Regulations”). Each Party shall comply
with all Regulations that become effective after the Effective Date within the
timeframes required by such Regulation or applicable Regulatory Authority.
Bayer shall not amend or replace any SOPs related to the Manufacturing Services
without providing reasonable notice to Purchaser in advance of the change and
obtaining Purchaser’s prior written consent. Purchaser shall not amend or
replace any SOPs related to the Inputs without providing reasonable notice to
Bayer in advance of the change and obtaining Bayer’s prior written consent.
Each Party 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 Purchaser’s proposed change would
adversely affect Bayer’s performance of the Manufacturing Services.
Notwithstanding the foregoing, until the second anniversary of the Effective
Date, Purchaser 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 or failure was in existence at the
time of Closing (as defined in the Contribution Agreement); provided, however,
that all other obligations of Purchaser 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, processing, distribution or sale of the
Products 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 authority to grant or deny the 

 

10

 

necessary Regulatory Approvals or to regulate the manner of means by
which the Products are manufactured, processed, distributed, or sold.

 

5.2           Audit.
(i) Each Party 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 the other Party’s facilities, SOPs,
production, operations, testing, storage and books and records to confirm
compliance with Section 5.1 and the other Party’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 such other Party. Each Party
shall use its commercially reasonable efforts to accommodate any reasonable
request made by the other Party to inspect such facility. Each Party shall
respond in writing to the other Party regarding any items of noncompliance
identified by the other Party during such inspections or audits within fifteen
(15) days of the other Party’s notice thereof and shall develop a plan,
reasonably satisfactory to the other Party, to remedy any such items of
noncompliance within sixty (60) days of notice thereof, and shall remedy such
items of noncompliance as set forth in such plan, the failure of which shall
entitle the other Party to terminate this Agreement in accordance with Section
4.1 hereof.

 

5.3           Regulatory
Filings. Each Party shall promptly accommodate all requests made by any
Regulatory Authority (as defined in Section 5.1) to audit such Party’s
facilities. Both Parties shall have the right to review, during the Term and
for a period of five (5) years thereafter, all audit findings or notices of
Regulatory Authorities as such may, directly or indirectly, bear upon the
Inputs, the Products or each Party’s obligations under this Agreement. Each
Party shall develop. and provide to the other Party a plan, reasonably
satisfactory to the other Party, to remedy, and shall remedy, any deficiencies
identified as a result of a regulatory inspection in the timeframes provided in
the applicable inspection report or the applicable Regulations. Bayer shall
promptly notify Purchaser (i) after Bayer becomes aware of any Regulatory
Authority inspection of the Bayer Facility and (ii) after Bayer receives notice
from a Regulatory Authority of any observation or regulatory action, such as a
warning letter. Bayer shall promptly provide a copy of any audit finding with
Bayer’s corrective action response to Purchaser for items that, directly or
indirectly, relate to the Manufacturing Services or any of Bayer’s obligations
under this Agreement. Purchaser shall notify Bayer (i) at the time Purchaser
becomes aware of any Regulatory Authority inspection of the Purchaser’s
Facility and (ii) at the time Purchaser receives notice from any Regulatory
Authority of any observation or regulatory action, such as a warning letter.
Purchaser shall promptly provide a copy of any audit finding with Purchaser’s
corrective action response to Bayer for items that, directly or indirectly,
relate to the Inputs or the Products or any of Purchaser’s obligations under
this Agreement.

 

5.4           Regulatory
Approvals. Bayer is solely responsible for obtaining and maintaining all
necessary Regulatory Approvals from all Regulatory Authorities necessary for
the performance of the Manufacturing Services at the Bayer Facility. Purchaser
is solely responsible for obtaining and maintaining all Regulatory Approvals
necessary to further process, distribute or sell the Products. Each Party shall
upon request and as reasonably necessary provide all documents or information
requested by the other Party to support the other Party’s efforts to obtain,
maintain, or defend Regulatory Approvals to manufacture, further 

 

11

 

process, distribute or sell the Products and/or will modify its
operations or facilities as required to permit the other Party to obtain,
maintain, or defend necessary Regulatory Approvals to manufacture, further
process, distribute and sell the Products; provided if the modifications to
operations or facilities requested by a Party are modifications which would
require the other Party to change the manner of operations existing as of the
date of this Agreement or to add facilities not in place as of the date of this
Agreement, such Party will reimburse the other Party’s reasonable direct costs
in making such modifications and the Parties shall engage in good faith negotiations
to adjust the price set forth in Section 3.1 to reflect the increase or
decrease of ongoing costs of processing the Products hereunder resulting from
any such modifications; provided further that if the Parties cannot reach an
agreement to adjust the price pursuant to this Section 5.4 despite such good
faith negotiations, (i) if the requested modifications will affect only the
Product operations of such Party at either the Bayer Facility or the
Purchaser’s Facility, as applicable, the matter shall be resolved in accordance
with Section 12.9, or (ii) if the requested modifications will, in the sole
discretion of the affected Party, adversely affect in any material manner other
operations of such Party at either the Bayer Facility or the Purchaser’s Facility,
as applicable, separate from the Product operations of such Party at either the
Bayer Facility or the Purchaser’s Facility, as applicable, such Party shall not
be required to make any such modifications until the Parties reach such
agreement; provided further such Party will have no obligation to reimburse the
other Party for any maintenance, repair or replacement of existing facilities
or for the substitution of their equivalent or for any increases in costs
associated with the other Party’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 as of the date of this Agreement.

 

ARTICLE 6 NONCONFORMING
PRODUCT AND RECALLS

6.1           Nonconforming
Product. (i) Purchaser shall provide Bayer with the identification number
of any plasma unit that was pooled and manufactured into a batch or lot of
Nonconforming Inputs delivered to Bayer. In the event that Purchaser provides
Inputs that do not meet the Regulations or do not conform to the Input
Specifications, or contain latent defects, or that have not been manufactured,
processed, distributed, transported, disposed, stored, tested or otherwise
handled in accordance with applicable SOPs, the Input Specifications, cGMPs and
the Regulations (“Nonconforming
Inputs”), Purchaser shall remain obligated to pay Bayer for
those Manufacturing Services performed by Bayer with such Nonconforming Inputs
prior to such later time, if any, as Purchaser notifies Bayer that such Inputs
are Nonconforming Inputs or Purchaser achieves the Required Quantity. To the
extent Nonconforming Inputs have been processed, then Purchaser will reimburse
Bayer based on the percentage of processing completed. Nonconforming Inputs
shall, at the option of Purchaser, be destroyed by Bayer (and a certificate of
destruction shall be promptly provided by Bayer to Purchaser) or returned to
Purchaser. Purchaser shall reimburse Bayer for the reasonable costs of
destruction or return of all Nonconforming Inputs. At Purchaser’s sole
election, Purchaser may provide additional Inputs to Bayer for processing into
Products to replace Non-Conforming Inputs so as to achieve the Required
Quantity.

 

(ii)           In
the event that Bayer supplies Products that do not meet the Regulations or do
not conform to the Product Specifications, or contain latent defects, or that
have not been manufactured, processed, distributed, transported, disposed,
stored, tested or otherwise handled in accordance with applicable SOPs, the
Product Specifications, cGMPs and the Regulations, (“Nonconforming Products”)
and such Nonconforming Products are not attributable to Nonconforming Inputs,
then (i) Bayer shall, at no cost to Purchaser, and as soon as reasonably 

 

12

 

feasible, replace such Nonconforming Product with an equivalent amount
of conforming Product to the extent Purchaser elects to provide additional
Inputs to Bayer and (ii) such Nonconforming Products shall at the option of
Purchaser be destroyed by Bayer (and a certificate of destruction shall be
promptly provided by Bayer to Purchaser) or returned to Purchaser. Bayer shall
reimburse Purchaser for the reasonable costs of destruction or return of all
Nonconforming Products plus the Input Replacement Value of any additional
Inputs provided by Purchaser.

 

(iii)          In
the event that the Parties are unable to agree as to whether Nonconforming
Inputs resulted in a Nonconforming Product, then a mutually selected
independent third party laboratory shall perform testing and provide results
thereof to the Parties within thirty (30) days of receiving the Inputs and
Products for testing for purposes of making such determination. The Parties
shall share equally the costs of such testing.

 

6.2           General
Requirements. Purchaser shall maintain accurate records of the quantities
of the Inputs shipped to Bayer and Bayer shall maintain accurate records of all
Products derived from such Inputs.

 

6.3           Distribution and Use
Records.

(i)             Purchaser 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 the Inputs 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.

(ii)            Records of the use of
each lot of the Inputs delivered to Bayer shall be maintained by Bayer for a
period of not less than fifteen (15) years from the date of delivery. Such
records shall be maintained such that the use of each lot of the Inputs can be
rapidly and unequivocally accounted for and the Products into which such Inputs
were processed, identified and made available to Purchaser within fourteen (14)
days from the date of request. Purchaser shall assist Bayer in identifying,
tracking and controlling the use of any Inputs identified in post-donation
information as contaminated or otherwise unsuitable for processing into
Products.

(iii)           Records regarding the
testing, storage, distribution and disposal of the Products shall be maintained
by Purchaser for such period required by the Regulations.

6.4           Adverse
Events. Purchaser shall record and investigate all reports of adverse
events in which Products manufactured from the Inputs have been implicated. If
Purchaser determines that a Product has caused adverse reactions as a result of
such Product being manufactured from Inputs, Purchaser shall immediately notify
all Regulatory Authorities as required by the Regulations. Purchaser shall
promptly notify Bayer of any such adverse events and shall provide Bayer with
copies of all documents provided by Purchaser to Regulatory Authorities with
respect thereto.

 

6.5           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 the Products, Purchaser obtains preliminary evidence indicating
that, according to indications and dosage, the Inputs used in the manufacture
of the Products may have caused such specific 

 

13

 

adverse reaction, each Purchaser customer that received any such
Products shall be notified by Purchaser 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. Purchaser shall promptly
provide Bayer 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.

 

6.6           Withdrawals
and Recalls. Purchaser shall make all contacts with 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
Bayer believes a recall or withdrawal of a Product may be necessary or appropriate,
Bayer shall promptly notify Purchaser in writing. In the event that Purchaser
initiates a recall or Product withdrawal, Purchaser shall promptly notify
Bayer.

 

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

 

6.8           Responsibility.
In the event that any market withdrawal, recall or third party return of any
Product results from Bayer’s supply of Nonconforming Product, then Bayer shall
assume the claims and costs associated with such withdrawal, recall or return
and the destruction of implicated Products to the extent attributable to
Bayer’s Nonconforming Product. Notwithstanding the foregoing, Bayer shall not
be liable for any market withdrawals, recalls or third party returns caused by
Nonconforming Inputs supplied by Purchaser.

 

6.9           Deviation
Report. (i) If during the manufacture, processing, storage, distribution,
testing, transport, disposal or other handling of the Products by Bayer there
arises a result that is classified as either a Type I Incident or a Type II
Incident (as defined below), then Bayer 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 Purchaser such Deviation Report
prior to Bayer’s delivery of the Products which is the subject of such report.
If Purchaser rejects a shipment of the Products based on a Deviation Report, it
shall promptly notify Bayer, such Products shall be considered Nonconforming
Products and the provisions of Section 6.1 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 II Incidents include clean steam exceeding action
level for LAL and Presterile in-process bioburden exceeding action level.

 

(ii)           If
during the manufacture, processing, storage, distribution, testing, transport,
disposal or other handling of the Inputs by Purchaser there arises a result
that is classified as either a Type I Incident or a Type II Incident, then
Purchaser shall prepare within seven (7) days following the discovery of such
deviation a Deviation Report and promptly send to Bayer such Deviation Report
prior to Purchaser’s delivery of the Inputs which is the subject of such
report. If Bayer 

 

14

 

rejects a shipment of the Inputs based on a Deviation Report, it shall
promptly notify Purchaser, such Inputs shall be considered Nonconforming Inputs
and the provisions of Section 6.1 shall apply.

 

ARTICLE 7 CONFIDENTIALITY

7.1           Confidentiality
Obligations. All information provided by one Party to the other Party in
connection with this Agreement (including without limitation, the Product
Specifications and Input Specifications and forecasts provided by Purchaser)
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 7.2(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.

 

7.2           Exceptions.
The covenants of the receiving Party contained in Section 7.1 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.

 

7.3           Term
of Obligations. This Article 7 shall survive termination of this Agreement
for a period of five (5) years.

 

ARTICLE 8 WARRANTIES AND
COVENANTS

8.1           General.
(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 the Inputs by Bayer until delivery to and processing at the Bayer
Facility (i) conformed to the SOPs relating to the Inputs, the Input
Specifications, cGMPs and the Regulations and (ii) were free from defects in
materials and 

 

15

 

workmanship and were not adulterated or misbranded within the meaning
of applicable Regulations.

 

(ii) Purchaser represents and warrants that the manufacture,
processing, testing, distribution, transport, storage, disposal and other
handling of the Inputs by Purchaser until delivery to and processing by Bayer
shall (i) conform to the SOPs relating to the Inputs, the Input 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
applicable Regulations. Purchaser shall deliver a certificate of analyses with
each shipment of the Inputs specifying the results of its testing and analysis
to show conformance with the Input Specifications. Similarly, Bayer represents
and warrants that the Manufacturing Services until the Products are delivered
to and processed by Purchaser shall (i) conform to the SOPs relating to the
Manufacturing Services, the Product Specifications, cGMPs and other Regulations
and (ii) be free from defects in materials and workmanship and shall not be.
adulterated or misbranded within the meaning of applicable Regulations. Either
Party shall be entitled to request the other Party to change the Input
Specifications or Product Specifications, as applicable, or SOPs where, in such
Party’s sole discretion, such change would benefit the production of the
Products and the other Party shall use commercially reasonable efforts to
accommodate such change; provided that the Party making such request will
reimburse the other Party the reasonable direct costs the other Party 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 3.1 to reflect the
increase or decrease of ongoing costs of processing the Products hereunder resulting
from any such change; provided further that if the Parties cannot reach
agreement to adjust the price pursuant to this Section 8.1 despite such good
faith negotiations, then (i) if the requested modifications will affect only
the Product operations of such Party at either the Bayer Facility or the
Purchaser’s Facility, as applicable, the matter shall be resolved in accordance
with Section 12.9, or (ii) if the requested modifications will, in the sole
discretion of the affected Party, adversely affect in any material manner other
operations of such Party at either the Bayer Facility or the Purchaser’s
Facility, as applicable, separate from the Product operations of such Party at
either the Bayer Facility or the Purchaser’s Facility, as applicable, such
Party shall not be required to make any such modifications until the Parties
reach such agreement.

 

8.2           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 the Inputs 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 the Inputs.

 

(ii) During the Term of this Agreement, Purchaser represents and
warrants that the manufacture, processing, testing, distribution, transport,
storage, disposal and other handling of the Inputs 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 Purchaser 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, Purchaser agrees to maintain at its sole cost and 

 

16

 

expense all licenses to third party intellectual property necessary or
appropriate for the manufacture, processing, testing, distribution, transport,
storage, disposal and other handling of the Inputs. Purchaser grants to Bayer a
fully paid, non-exclusive right and license to use Purchaser’s intellectual
property listed on Exhibit J
attached hereto and incorporated herein by reference solely for the purpose of
performing the Manufacturing Services, during the term of this Agreement. The
grant of this license in such intellectual property in no way provides Bayer
any rights in or authorization to use any other intellectual property of
Purchaser.

 

8.3           Representations and
Warranties.

(a)           Bayer
hereby represents and warrants to Purchaser 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 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.

 

17

(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 he obtained by Bayer for the consummation of the
transactions contemplated by this Agreement.

 

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

(i)             Due Organization,
Good Standing and Power. Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the state of Delaware.
Purchaser 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. Purchaser 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 Purchaser or on the
consummation of the transactions contemplated hereunder. Purchaser 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
Purchaser 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 Purchaser and
do not require the approval of the stockholders of Purchaser. This Agreement
has been duly executed and delivered by Purchaser and constitutes the legal,
valid and binding obligation of Purchaser 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 Purchaser 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 Purchaser or (ii) violate any Applicable Law or any permit, order,
award, injunction, decree or judgment of any Governmental Authority applicable
to or binding upon Purchaser or to which any of its properties or assets is
subject.

(iv)          No Consents. The
execution, delivery and performance of this Agreement by Purchaser and the
consummation of the transactions contemplated by this Agreement do not require
any Governmental Approval. No consent (other than Governmental 

 

18

 

Approvals) will be
required to be obtained by Purchaser for the consummation of the transactions
contemplated by this Agreement.

ARTICLE 9 INDEMNITIES AND
DAMAGES

9.1           Indemnifications.
Purchaser 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 the Purchaser Group (as defined below); provided that any
Claims for failure to deliver Inputs in accordance with the terms of this
Agreement shall be deemed a material breach. Bayer hereby agrees to save,
defend and hold Purchaser 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 “Purchaser Group”) harmless from and
against any and all Claims asserted by a person or entity other than a member
of the Purchaser Group arising from any material breach of obligations under
this Agreement by the Bayer Group; provided that failure to deliver Products in
accordance with the terms of this Agreement shall be governed exclusively under
Section 9.4 hereof Where a Claim arises directly or indirectly from acts or
omissions of both (i) the Purchaser Group and (ii) the Bayer Group, the obligation
of the Purchaser 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.

 

9.2           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 

 

19

 

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).

 

9.3           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, each Party
shall maintain, at its 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. Each Party shall have its insurance carrier
furnish to the other Party 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 the other Party shall be given
thirty (30) days written notice of all cancellation, non-renewal or material
changes in policy. Each Party shall be named as an additional insured on all insurance
policies obtained by the other Party in accordance with this Section 9.3. Each
Party also agrees to waive and will require its insurers to waive all rights of
subrogation against the other Party, its directors, officers and employees on
all of the foregoing coverages.

 

9.4           Liquidated
Damages For Failure To Deliver Products. (a)  The Parties acknowledge that the anticipated
damages to Purchaser in the event of a failure by Bayer to deliver the Products
to Purchaser for a prolonged period of time is incapable of accurate estimation
as of the Effective Date.

 

(b)           Subject
to the last sentence of this subsection (b), in the event at the conclusion of
any month Bayer has failed to deliver during the immediately preceding rolling
twelve (12) months an amount of Column Eluate which conforms to the Product
Specifications aggregating at least seventy-five
percent (75%) of the Orders for the immediately preceding rolling twelve
(12) months (“Column
Eluate Threshold Deliveries”) and such failure is not the result
of Force Majeure or Purchaser’s failure to deliver Inputs meeting the Input
Specifications to Bayer in accordance with this Agreement (each, a “Column Eluate Triggering Event”),
then Bayer shall promptly pay Purchaser liquidated damages as follows:

 

 

20

 

For each month following a Column Eluate Triggering Event Bayer fails
to make Column Eluate Threshold Deliveries, Bayer shall initially pay $250,000;

 

After Bayer has failed to make Column Eluate Threshold Deliveries for
two consecutive months following a Column Eluate Triggering Event, Bayer shall
thereafter pay $500,000 per
month for each following consecutive month in which Bayer fails to make Column
Eluate Threshold Deliveries; and

 

After Bayer has failed to make Column Eluate Threshold Deliveries for
five consecutive months following a Column Eluate Triggering Event, Bayer shall
pay $1 million per month for each additional consecutive month in
which Bayer fails to make Column Eluate 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 9.4(b)
shall not arise before the first day of the thirteenth month after the
Commencement Date.

 

(c)           In
no event shall the aggregate amount of liquidated damages payable by Bayer for
all such incidences to Purchaser pursuant to subsection (b) above exceed $15 million (the “Column Eluate Cap”).
From January 1, 2007 through December 31, 2008, the Column Eluate Cap shall be
reduced to an amount equal to $7.5
million minus the aggregate liquidated damages payable by Bayer pursuant
to subsection (b) above from the Effective Date through December 31, 2006, but
not less than zero. No liquidated damages shall be payable by Bayer pursuant to
subsection (b) after December 31, 2008.

 

(d)           Subject
to the last sentence of this subsection (d), in the event at the conclusion of
any month Bayer has failed to deliver during the immediately preceding rolling
twelve (12) months an amount of ATIII which conforms to the Product
Specifications aggregating at least seventy-five percent (75%) of the Orders
for the immediately preceding rolling twelve (12) months (“ATIII Threshold Deliveries”
and together with the Column Eluate Threshold Deliveries, the “Threshold Deliveries”)
and such failure is not the result of Force Majeure or Purchaser’s failure to
deliver Inputs meeting the Input Specifications to Bayer in accordance with
this Agreement (each, a “ATIII
Triggering Event”), Bayer shall pay Purchaser liquidated damages
as follows:

 

For each month following an ATIII Triggering Event Bayer fails to make
ATIII Threshold Deliveries, Bayer shall initially pay $37,500;

 

After Bayer has failed to make ATIII Threshold Deliveries for two
consecutive months following an ATIII Triggering Event, Bayer shall thereafter
pay $75,000 per month for each
following consecutive month in which Bayer fails to make ATIII Threshold Deliveries;
and

 

After Bayer has failed to make ATIII Threshold Deliveries for five
consecutive months following an ATIII Triggering Event, Bayer shall pay $150,000 per month for each additional
consecutive month in which Bayer fails to make ATIII Threshold Deliveries.

 

 

21

 

The first rolling twelve (12) months shall commence on the Commencement
Date. Any liability for payment of damages specifically under this Section
9.4(d) shall not arise before the first day of the thirteenth month after the
Commencement Date.

 

(e)           In
no event shall the. aggregate amount of liquidated damages payable by Bayer for
all such incidences to Purchaser pursuant to subsection (d) above exceed $1.75 million (the “ATIII Cap”). From
January 1, 2007 through December 31, 2008, the ATIII Cap shall be reduced to an
amount equal to $875,000 minus
the aggregate liquidated damages payable by Bayer pursuant to subsection (d)
above from the Effective Date through December 31, 2006, but not less than
zero. No liquidated damages shall be payable by Bayer pursuant to subsection
(d) after December 31, 2008.

 

(f)            If
the liquidated damages provision provided for in this Section 9.4 is deemed
unenforceable for any reason by a court of competent jurisdiction, Bayer shall
pay an amount to Purchaser equal to the direct damages or losses incurred by
Purchaser, including without limitation all lost profits, costs of cover and
delivery penalties but excluding consequential damages as a result of Bayer’s
failure to deliver Products, subject to the Column Eluate Cap and the ATIII
Cap, as applicable.

 

(g)           For
the avoidance of doubt, the requirement to pay liquidated damages in this
Section 9.4 only applies where there has been a failure of Bayer to make
Threshold Deliveries and nothing in this Section 9.4 shall be construed as
relieving Bayer of liability for its failure to deliver Products which conform
to the Product Specifications in the amounts required by Sections 2.1, 2.4 or
2.9 and/or meeting the requirements set forth in Section 2.5 in circumstances
(other than Force Majeure) where Bayer has made Threshold Deliveries, but has
not made full deliveries of the Products in full compliance with an Order
presented in accordance with Section 2.9 (“Circumstance of Under-Delivery”) to the
extent provided in this Section 9.4(g). In the event at the conclusion of any
month Bayer has failed to deliver during the immediately preceding rolling
three (3) months Products which conform to the Product Specifications in an
amount aggregating one hundred percent (100%) of the Orders for the immediately
preceding. rolling three (3) months and Purchaser suffers direct damages as a
result thereof, Purchaser may notify Bayer to that effect, in which case Bayer
shall have three additional months within which to deliver such Products. If
Bayer does in fact deliver such Products within such period, then no damages
shall apply for such Circumstances of Under-Delivery. If Bayer does not deliver
such Products within such period, then Bayer shall be liable to Purchaser for
all direct damages or losses Purchaser suffers, including without limitation
all lost profits, cost 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 Bayer from this Agreement for such calendar year
(calculated as though it had complied with its delivery obligations in such
calendar year based on actual Orders plus the rolling forecast issued the month
prior to the 3-month period of underdelivery, as to those months for which
Orders had not yet been issued), provided that any such recovery shall
be reduced by (i) any amounts previously paid pursuant to Section 9.4(b) and
(d) and (ii) any amount that Purchaser actually recovers under any insurance it
maintains.

 

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

 

22

 

(h)           The
rights and remedies of Purchaser provided in this Section 9.4 shall be
Purchaser’s exclusive remedy for recovery of monetary damages with respect to
Bayer’s failure to deliver Products in amounts required by this Agreement.
Purchaser shall have such non-monetary rights and remedies provided under this
Agreement or under law or in equity for Bayer’s failure to deliver Products in
amounts required by this Agreement, but only limited to the remedy of specific
performance.

 

9.5           Insurance
Recoveries. If and to the extent the indemnifying party has acquired
insurance in compliance with Section 9.3, and to the extent such coverage is
inadequate to cover all Claims asserted against Purchaser and Bayer and if and
to the extent Purchaser or Bayer, as the case may be, has its own policy of
insurance purporting to provide coverage for Claims against Purchaser or Bayer,
as the case may be, Purchaser or Bayer, as the case may be, shall not be
entitled to indemnification from the indemnifying party for such Claims under Section
9.1 until Purchaser or Bayer, as the case may be, has utilized all commercially
reasonable means to recover such loss under its policy of insurance.

 

9.6           Aggregate
Caps. In no event shall Bayer have liability under this Section 9.4 for
non-delivery of Products greater than $11
million in the case of ATM or $23
million in the case of Column Eluate.

 

ARTICLE 10 DISCLAIMER

EACH PARTY 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 11 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
Purchaser or Bayer, as the case may be, unless, in the case of Purchaser,
Purchaser 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 Purchaser, 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 the Products; and (iv) in the case of Purchaser, events,
circumstances, conditions and actions outside of the control of Purchaser 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 

 

 

23

 

action by any Regulatory Authority; any of (i), (ii), (iii) or (iv) of
which, in the case of the Purchaser, prevents the Purchaser from performing its
obligations under this Agreement, or, any of (i), (ii) or (iii) of which, in
the case of Bayer, prevents Bayer from performing its obligations under this
Agreement; provided that nothing in clause (iii) or (iv) shall excuse Purchaser
from complying with cGMPs or excuse Purchaser from remedying those matters
which were capable of remedy by Purchaser through the application of
commercially reasonable efforts prior to the occurrence of the events
identified in (iii) or (iv) preventing Purchaser from performing under the
Agreement. Notwithstanding anything in this Agreement to the contrary, except
Article 7 and Article 12, 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. 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 this 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 12 MISCELLANEOUS

12.1         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 of its obligations under this Agreement).
Notwithstanding the foregoing, Purchaser may assign this Agreement and any or
all rights or obligations hereunder to (i) any affiliate of Purchaser provided
that any such affiliate becomes a party to this Agreement, (ii) any lender of
Purchaser as collateral security or (iii) any successor in interest to
Purchaser, provided that any such successor becomes a party to this Agreement;
provided that no assignment under (i), (ii) or (iii) above shall relieve
Purchaser 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 the Bayer Facility 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 obligations hereunder. Any purported
assignment in contravention of this Section 12.1 shall be void.

 

12.2         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 Purchaser and Bayer, whether
oral or written, relating to the subject matter hereof. 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 

 

24

 

signed by all of the Parties. In the event that this Agreement
conflicts with any Order, invoice or other written document, the terms and
conditions of this Agreement shall apply.

 

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

 

	
  If to Bayer:

  	
   

  
	
   

  	
   

  
	
   

  	
  Bayer HealthCare LLC

  
	
   

  	
  Biological Products Division

  
	
   

  	
  800 Dwight Way

  
	
   

  	
  P.O. Box 1986

  
	
   

  	
  Berkeley, CA 94710

  
	
   

  	
  Attention: Contracts 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

  
	
   

  	
   

  
	
  If to Purchaser:

  	
   

  
	
   

  	
   

  
	
   

  	
  Talecris Biotherapeutics, Inc.

  
	
   

  	
  P.O. Box 13887

  
	
   

  	
  79 TW Alexander Drive

  
	
   

  	
  4101 Research Commons

  
	
   

  	
  Research Triangle Park

  
	
   

  	
  Raleigh, NC 27709

  
	
   

  	
  Fax: (919) 316-6669

  
	
   

  	
   

  

 

25

 

	
  With a copy to:

  	
   

  
	
   

  	
   

  
	
   

  	
  Alison S. Ressler, Esq.

  
	
   

  	
  Sullivan & Cromwell LLP

  
	
   

  	
  1888 Century Park East

  
	
   

  	
  Suite 2100

  
	
   

  	
  Los Angeles, CA 90067

  
	
   

  	
  Fax: (310) 712-8800

  
	
   

  	
   

  
	
   

  	
  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 12.3.

 

12.4         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. Bayer shall
maintain its status as an independent contractor engaged in the selling of
Products to Purchaser.

 

12.5         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.

 

12.6         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.

 

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

 

12.8         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.

 

12.9         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 

 

26

 

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 Parties 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 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 Purchaser: Chief Executive Officer, 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 12.9.

 

(b)           Binding
Arbitration. In any event, if the dispute, other than with respect to
Section 3.2(ii) or Article 4, is not resolved in accordance with Section
12.9(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 

 

27

 

dispute to protect their respective rights pending the
outcome of arbitration. The Parties bind themselves to carry out the awards of
the arbitrator. The fees and expenses of the arbitrators, the fees and expenses
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 12.9(a) any
dispute arising under Section 3.2(ii) 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.

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

 

12.11       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)

 

28

 

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

  
					

 

 

29

 

Execution Copy

 

Exhibit Index

to

Manufacturing Agreement

between

Bayer HealthCare LLC and Talecris
Biotherapeutics, Inc.

 

	
  Exhibit A

  	
   

  	
  Column Eluate Required Quantity and ATIII Required Quantity

  
	
  Exhibit B

  	
   

  	
  Column Eluate Specifications

  
	
  Exhibit C

  	
   

  	
  ATIII Specifications

  
	
  Exhibit D

  	
   

  	
  Fraction IV-I Paste Specifications

  
	
  Exhibit E

  	
   

  	
  PEG Paste Specifications

  
	
  Exhibit F

  	
   

  	
  Manufacturing Agreement for Column Eluate

  
	
  Exhibit G

  	
   

  	
  Manufacturing Agreement for ATIII

  
	
  Exhibit H

  	
   

  	
  Expected Yield Calculation

  
	
  Exhibit I

  	
   

  	
  Price

  
	
  Exhibit J

  	
   

  	
  Purchaser Intellectual Property to be Licensed

  

 

Execution Copy

 

EXHIBIT A

 

2005 Product Forecast

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Intermediate

  	
   

  	
  Final

  	
   

  
	
   

  	
   

  	
  Input IV1

  	
   

  	
   

  	
   

  	
  Product

  	
   

  	
  Product

  	
   

  
	
   

  	
   

  	
  Paste

  	
   

  	
  Product

  	
   

  	
  Eluate

  	
   

  	
  ATIII

  	
   

  
	
  Month

  	
   

  	
  (kgs)

  	
   

  	
  Harvested

  	
   

  	
  (kgs)

  	
   

  	
  (vials)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jan

  	
   

  	
  [***]

  	
   

  	
  Eluate and ATIII

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Feb

  	
   

  	
  [***]

  	
   

  	
  Eluate and ATIII

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Mar

  	
   

  	
  [***]

  	
   

  	
  Eluate and ATIII

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Apr

  	
   

  	
  [***]

  	
   

  	
  Eluate only

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  May

  	
   

  	
  [***]

  	
   

  	
  Eluate and ATIII

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Jun

  	
   

  	
  [***]

  	
   

  	
  Eluate only

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Jul

  	
   

  	
  [***]

  	
   

  	
  Eluate only

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Aug

  	
   

  	
  [***]

  	
   

  	
  Eluate and ATIII

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Sep

  	
   

  	
  [***]

  	
   

  	
  Eluate and ATIII

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Oct

  	
   

  	
  [***]

  	
   

  	
  Eluate only

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Nov

  	
   

  	
  [***]

  	
   

  	
  Eluate only

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Dec

  	
   

  	
  [***]

  	
   

  	
  Eluate only

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Total

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  

 

 

	
  Approved by

  	
   

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
   

  	
  Purchaser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Approved by

  	
   

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
   

  	
  Bayer

  

 

* To be updated within 30 days of closing

 

***CONFIDENTIAL TREATMENT REQUESTED

 

Confidential Evaluation Material Subject to
Confidentiality Agreement

 

Execution Copy

 

EXHIBIT A(Cont’d.)

 

2006 Product Forecast

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Intermediate

  	
   

  	
  Final

  	
   

  
	
   

  	
   

  	
  Input IV1

  	
   

  	
   

  	
   

  	
  Product

  	
   

  	
  Product

  	
   

  
	
   

  	
   

  	
  Paste

  	
   

  	
  Product

  	
   

  	
  Eluate

  	
   

  	
  ATIII

  	
   

  
	
  Month

  	
   

  	
  (kgs)

  	
   

  	
  Harvested

  	
   

  	
  (kgs)

  	
   

  	
  (vials)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jan

  	
   

  	
  [***]

  	
   

  	
  Eluate only

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Feb

  	
   

  	
  [***]

  	
   

  	
  Eluate and ATIII

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Mar

  	
   

  	
  [***]

  	
   

  	
  Eluate and ATIII

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Apr

  	
   

  	
  [***]

  	
   

  	
  Eluate and ATIII

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  May

  	
   

  	
  [***]

  	
   

  	
  Eluate and ATIII

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Jun

  	
   

  	
  [***]

  	
   

  	
  Eluate and ATIII

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Jul

  	
   

  	
  [***]

  	
   

  	
  Eluate only

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Aug

  	
   

  	
  [***]

  	
   

  	
  Eluate and ATIII

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Sep

  	
   

  	
  [***]

  	
   

  	
  Eluate only

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Oct

  	
   

  	
  [***]

  	
   

  	
  Eluate only

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Nov

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Dec

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  Total

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  

 

 

	
  Approved by

  	
   

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
   

  	
  Purchaser

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Approved by

  	
   

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
   

  	
  Bayer

  

 

* To be updated within 30 days of closing

 

***CONFIDENTIAL TREATMENT REQUESTED

 

Confidential Evaluation Material Subject to
Confidentiality Agreement

 

 

	
  Exhibit B

  	
   

  	
  Execution Copy

  

 

	
  

  	
  BIOLOGICAL
  PRODUCTS PURCHASE SPECIFICATION

  	
  SAP
  MATERIAL #:

  	
  08633072

  08658989

  
	
   

  	
   

  	
  REVISION:
  NEW

  
	
   

  	
  TITLE: 

  	
  ALPHA-1 COLUMN ELUATE PROCESSED AT BAYER HEALTHCARE’S BERKELEY, CA FACILITY

  	
  PAGE 1 of 5

  
					

 

	
  /s/ Authorized Signatory

  	
   

  	
  11-16-04

  	
   

  	
  /s/ Authorized Signatory

  	
   

  	
  11-16-2004

  
	
  Document Owner

  	
   

  	
  Date

  	
   

  	
  Quality Manager

  	
   

  	
  Date

  

 

	
  Supercedes:

  	
   

  	
   

  	
   

  	
   

  	
  Date Effective: 

  	
   

  	
  Nov 16 2004

  

 

1.              PURPOSE

 

1.1                     [***]

 

2.              REFERENCE(S)

 

2.1.                  Guidance for
Industry, “Cooperative Manufacturing Arrangements for Licensed Biologics”
August 1999.

 

2.2.                  21 CFR 600 and 200 (appropriate
sections).

 

2.3.                  CS-000-BE-021, “Quality
Review and Release of Intermediate Materials Processed at Bayer Berkeley and
Shipped to Bayer Clayton.”

 

3.              DEFINITIONS

 

3.1.                  Fraction IV-1
Paste – Refers to a paste fraction obtained by processing U.S. collected source
plasma using an FDA approved method that conforms to the process flow specifications
as stated in the Bayer PLA/BLA.

 

3.2.                  [***] – Refers
to a paste fraction obtained by further processing Fraction IV-1 Paste using an
FDA approved method that conforms to the process flow specifications as stated
in the Bayer PLA/BLA.

 

3.3.                  Alpha-1 Column
Eluate – Refers to a solution obtained by applying PEG Paste to a
chromatography column and subsequently eluting the purified protein from the
column by an FDA approved method that conforms to the process flow
specifications as stated in the Bayer PLA/BLA.

 

3.4.                  Date of
separation – The date of separation is the date the fraction is separated from
the other fractions, it is synonymous with the date of manufacture.

 

3.5.                  NLT – not less
than.

 

3.6.                  NMT – not more
than.

 

CONFIDENTIAL

 

This material is the property of Bayer Corp. The information is
confidential and is to be used only in connection with matters authorized by
Bayer Corp. and no part of it is to be disclosed to others without prior
written permission from Bayer Corp.

 

Confidential Evaluation Material Subject to Confidentiality Agreement

 

***CONFIDENTIAL TREATMENT REQUESTED

 

1 of 11

 

	
  Exhibit B

  	
   

  	
  Execution Copy

  

 

	
  

  	
  BIOLOGICAL
  PRODUCTS PURCHASE SPECIFICATION

  	
  SAP
  MATERIAL #:

  	
  08633072

  08658989

  
	
   

  	
   

  	
  REVISION:
  NEW

  
	
   

  	
  TITLE: 

  	
  ALPHA-1 COLUMN ELUATE PROCESSED AT BAYER HEALTHCARE’S BERKELEY, CA FACILITY

  	
  PAGE 2 of 5

  
					

 

4.            GENERAL REQUIREMENTS

 

4.1.                  Acceptable
manufacturer/location: Bayer HealthCare, Berkeley, CA facility.

 

4.2.                  The Alpha-1
Column Eluate must be processed from IV-1 Paste or [***] shipped to the Bayer
Berkeley facility from approved fractionation facilities, currently the Bayer
facility in NC and the Precision facility in Melville, NY.

 

4.3.                  Manufacturing
documents for Column Eluate paste shall be maintained on file for NLT 15 years
or the duration of the shelf life of the product plus one year, whichever is
longer, and shall be made available upon request by Bayer Clayton during
Berkeley escorted audits.

 

4.4.                  Bayer shall have
the right to audit Berkeley’s manufacturing facility and receiving area on an
annual basis provided a written request is given to Berkeley to make
appropriate arrangement for the requested audit. Such audit will be contingent
upon a mutually agreeable time for both parties. If a “for cause” audit is
requested by Bayer, Clayton shall provide Berkeley a written request justifying
Clayton’s cause and reason for said audit. Such audit will be contingent upon a
mutually agreeable time for both parties and will be accomplished in a
reasonable time period.

 

4.5.                  Berkeley shall
notify Bayer Clayton QO Release Manager, Clayton in the event that as a result
of a regulatory audit there are documented findings at Berkeley that would
possibly impact product intended for sale to Clayton or already shipped to
Clayton. In such event, Clayton would be notified in writing by Berkeley.

 

4.6.                  Any product
already shipped to Clayton determined not to meet specifications (i. e.
discrepant) requires phone notification to the Clayton QO Release Manager
within 24 hours of detection, followed by written notification within 48 hours.
Clayton requires a discrepancy investigation which must detail Berkeley’s “Cause
and Corrective Action” information (sent within 30 working days).

 

4.7.                  Berkeley will notify
Clayton upon submission to the FDA of licensure changes specific to testing
laboratories, methodologies and test kits used to test product that is
manufactured by Berkeley for Clayton. Accordingly, Berkeley will notify Clayton
prior to any changes specific to the Column Eluate process that requires
validation in the manufacturing process. All notifications must be in writing.
Paste will not be shipped prior to Clayton’s written acknowledgement of the
change.

 

4.8.                  Associated
Berkeley documentation B-QAP 536A and either BS-000-AH-010 or BS-000-AH-051
will accompany the shipment.

 

4.9.                  The Column
Eluate must be processed according to Bayer Berkeley, CA procedures, the Bayer
PLA/BLA and CBER/FDA approved PLA/BLA Amendments. This includes conformance
with all temperature requirements. Reprocessed Column Eluate or Column Eluate containing
reprocessed material is not acceptable.

 

5.              SPECIAL REQUIREMENTS

 

5.1.                  Manufacturer
Certification – For each batch of Column Eluate shipped to the Clayton
facility, the manufacturer shall provide, prior to shipment of released Column
Eluate, a document that

 

CONFIDENTIAL

 

This material is the property of Bayer Corp.
The information is confidential and is to be used only in connection with
matters authorized by Bayer Corp. and no part of it is to be disclosed to
others without prior written permission from Bayer Corp.

 

Confidential Evaluation Material Subject to
Confidentiality Agreement

 

***CONFIDENTIAL TREATMENT REQUESTED

 

2 of 11

 

	
  Exhibit B

  	
   

  	
  Execution Copy

  

 

	
  

  	
  BIOLOGICAL
  PRODUCTS PURCHASE SPECIFICATION

  	
  SAP
  MATERIAL #:

  	
  08633072

  08658989

  
	
   

  	
   

  	
  REVISION:
  NEW

  
	
   

  	
  TITLE: 

  	
  ALPHA-1 COLUMN ELUATE PROCESSED AT BAYER HEALTHCARE’S BERKELEY, CA FACILITY

  	
  PAGE 3 of 5

  
					

 

certifies the required criteria. See Attachment 1 for example. This
certificate shall be mailed overnight and/or faxed to the QO Release Manager at
the following address:

 

Bayer – Clayton

Attn. QO Release Manager

QO Plasma – E810

8368 US Hwy. 70 W

Clayton NC 27520

Fax: 919-359-7096

 

5.1.1.       All
Associated IV-1 Paste and [***] was shipped and stored at temperatures of - 20°
C or colder.

 

5.1.2.       The
requirements in Section 6, Testing Requirements, have been met.

 

5.1.3.       The
Column Eluate was processed according to the approved Bayer PLA/BLA. There were
no manufacturing deviations or discrepancies for this batch that could
adversely affect the safety, purity, quality or potency of the Column Eluate
batch.

 

5.1.4.       The
Column Eluate was processed in a manner minimizing microbial load and endotoxin
level. It is not acceptable to ship Column Eluate if any coliform is detected.

 

5.1.5.       The
Column Eluate certificate will contain the date of separation and the
associated IV-1/PEG Paste batches that were combined to create the Column
Eluate. Date of separation is the date of manufacture.

 

5.1.6.       Statement
indicating the actual manufacturing facility (i.e. Bayer HealthCare, Berkeley,
CA).

 

5.1.7.       The
Column Eluate batch has not been reworked for any reason. Reprocessed paste or
paste containing reprocessed material is not acceptable.

 

Note:                  The
completed Column Eluate certification will accompany the shipment.

 

5.1.8.       Viral
inactivation certification. Any deviations to the viral inactivation process
will be reported on the certification, along with final Berkeley disposition.

 

5.2.                    There should be a direct
correlation to the amount of IV-1 Paste or PEG Paste shipped to the Berkeley
facility and the amount of Column Eluate returned to the Clayton facility. No
product should be destroyed without the written approval from Clayton’s Supply
Chain Manager.

 

5.3.                    Dating Period – The product dating
for Column Eluate is [***] months from date of separation. At least 4 months of
shelf life must remain at the time of receipt of Column Eluate by the Clayton
facility. If two months do not remain on shelf life approval to ship must be
obtained from Clayton’s Supply Chain Manager prior to shipment. Each container
of Column Eluate must be labeled and documented with the required information.
Reference (Attachment 2) for required information.

 

6.              TESTING REQUIREMENTS

 

6.1.                    The Clayton facility will be
responsible for all plasma unit and manufacturing pool testing.

 

CONFIDENTIAL

 

This material is the property of Bayer Corp.
The information is confidential and is to be used only in connection with
matters authorized by Bayer Corp. and no part of it is to be disclosed to
others without prior written permission from Bayer Corp.

 

Confidential Evaluation Material Subject to
Confidentiality Agreement

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

3 of 11

 

	
  Exhibit B

  	
   

  	
  Execution Copy

  

 

	
  

  	
  BIOLOGICAL
  PRODUCTS PURCHASE SPECIFICATION

  	
  SAP
  MATERIAL #:

  	
  08633072

  08658989

  
	
   

  	
   

  	
  REVISION:
  NEW

  
	
   

  	
  TITLE: 

  	
  ALPHA-1 COLUMN ELUATE PROCESSED AT BAYER HEALTHCARE’S BERKELEY, CA FACILITY

  	
  PAGE 4 of 5

  
					

 

6.2.                    The Column Eluate will be tested at
the Berkeley facility and certified for the following characteristics:

 

	
  Process Step

  	
   

  	
  Characteristic

  	
   

  	
  Specification

  
	
  Concentrated Column Eluate

  	
   

  	
  Potency

  	
   

  	
  [***]

  
	
  Concentrated Column Eluate

  	
   

  	
  Purity:

  	
   

  	
   

  
	
   

  	
   

  	
  Albumin

  	
   

  	
  [***]

  
	
   

  	
   

  	
  Alpah-1 Globulin

  	
   

  	
  [***]

  
	
  Concentrated Column Eluate

  	
   

  	
  Recovery of column process

  	
   

  	
  [***]

  
	
   

  	
   

  	
  Microbial Load

  	
   

  	
  [***]

  

 

Note: If a discrete Concentrated Column Eluate batch has a bioburden
level greater than [***], written notification to the Clayton Supply Chain
Mangaer must be made so that a Clayton Quality evaluation of the batch and investigation
may be assessed to determine further suitability. Quality assessment will be
documented.

 

6.3.                    Column Eluate samples – Berkeley
must send by overnight courier in a manner designed to maintain proper
temperature one 50 gram and two 100 gram samples of Column Eluate to:

 

Bayer – Clayton

Attn. QO Plasma Manager

QO Plasma – B543

8368 US Hwy. 70 W

Clayton NC 27520

Fax: 919-359-4562

 

The samples must be in Clayton QO approved containers, Kendall
Healthcare product catalog number 888-920-7109.

 

7.              STORAGE AND SHIPPING
REQUIREMENTS

 

7.1.                    Berkeley should not ship the Column
Eluate until receiving written authorization from Clayton Supply Chain. The
authorization to ship Column Eluate should be sent via fax to Berkeley.

 

7.2.                    This authorization to ship should
be within the dating period described in paragraph 5.3 and will be given to
Berkeley’s Material Management.

 

7.3.                    Packaging – Column Eluate shall be
packaged and double bagged using polyethylene tote liners. Each tote liner
shall be securely closed with a cable tie. The liners shall be overpacked in
plastic totes whose lid is secured with a cable tie. Each tote should be NMT 20
kg.

 

7.3.1.      The polyethylene bag and plastic
totes shall be labeled with the following information:

 

Material number

Material name

Batch number

Gross weight

Net weight

 

CONFIDENTIAL

 

This material is the property of Bayer Corp.
The information is confidential and is to be used only in connection with
matters authorized by Bayer Corp. and no part of it is to be disclosed to
others without prior written permission from Bayer Corp.

 

Confidential Evaluation Material Subject to
Confidentially Agreement

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

4 of 11

 

	
  Exhibit B

  	
   

  	
  Execution Copy

  

 

	
  

  	
  BIOLOGICAL
  PRODUCTS PURCHASE SPECIFICATION

  	
  SAP
  MATERIAL #:

  	
  08633072

  08658989

  
	
   

  	
   

  	
  REVISION:
  NEW

  
	
   

  	
  TITLE: 

  	
  ALPHA-1 COLUMN ELUATE PROCESSED AT BAYER HEALTHCARE’S BERKELEY, CA FACILITY

  	
  PAGE 5 of 5

  
					

 

Tare weight

Date manufactured

Expiration date

Container Number

 

7.4.                    Storage and Shipping Temperature –
The eluate must be stored and shipped at -20° C or colder. The temperature of
each shipment must be monitored using a refrigerated truck equipped with a
temperature-recording device. Bayer Clayton will retain the intermediate
shipment temperature monitoring data.

 

7.5.                    Prior to shipment, Berkeley must
assure that:

 

7.5.1.                     The packaging is as specified in
paragraph 7.3.

 

7.5.2.                     All Column Eluate was stored at
-20° C or colder.

 

7.5.3.                     The truck temperature is checked
and confirmed to be -25° C or colder prior to loading.

 

7.5.4.                     The truck continuous recording
device is operating properly.

 

7.5.5.                     Material stored to be shipped must
maintain at -20° C or colder until actual loading of the truck.

 

8.              INSPECTION

 

8.1.                    Clayton’s Bayer QO will be
responsible for reviewing all incoming Column Eluate and associated paperwork
to ensure that material has met all established guidelines and standards.

 

8.2.                    Physical inspection requires
material to be free of foreign debris and packed/labeled as outlined in this
purchase specification.

 

9.              ATTACHMENTS

 

9.1.                    Attachment 1 – Example Certificate
of Analysis

 

9.2.                    Attachment 2 – Example of Column
Eluate Label

 

9.3.                    Attachment 3 – Berkeley Column
Eluate flow diagram

 

CONFIDENTIAL

 

This material is the property of Bayer Corp.
The information is confidential and is to be used only in connection with
matters authorized by Bayer Corp. and no part of it is to be disclosed to
others without prior written permission from Bayer Corp.

 

Confidential Evaluation Material Subject to
Confidentially Agreement

 

5 of 11

 

	
  Exhibit B

  	
   

  	
  Execution Copy

  

 

	
  

  	
  BIOLOGICAL
  PRODUCTS PURCHASE SPECIFICATION

  	
  SAP
  MATERIAL #:

  	
  08633072

  08658989

  
	
   

  	
   

  	
  REVISION:
  NEW

  
	
   

  	
  TITLE: 

  	
  ALPHA-1 COLUMN ELUATE PROCESSED AT BAYER HEALTHCARE’S BERKELEY, CA FACILITY

  	
  PAGE 1 of 4

  ATTACHMENT 1

  
					

 

EXAMPLE OF CERTIFICATE OF ANALYSIS

 

	
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CONFIDENTIAL

 

This material is the property of Bayer Corp.
The information is confidential and is to be used only in connection with
matters authorized by Bayer Corp. and no part of it is to be disclosed to
others without prior written permission from Bayer Corp.

 

Confidential Evaluation
Material Subject to Confidentially Agreement

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

6 of 11

 

	
  Exhibit B

  	
   

  	
  Execution Copy

  

 

	
  

  	
  BIOLOGICAL PRODUCTS
  PURCHASE SPECIFICATION

  	
  SAP
  MATERIAL #:

  	
  08633072

  08658989

  
	
   

  	
   

  	
  REVISION:
  NEW

  
	
   

  	
  TITLE: 

  	
  ALPHA-1 COLUMN ELUATE PROCESSED AT BAYER HEALTHCARE’S BERKELEY, CA FACILITY

  	
  PAGE 2 of 4

  ATTACHMENT 1

  
					

 

	
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CONFIDENTIAL

 

This material is the property of Bayer Corp.
The information is confidential and is to be used only in connection with
matters authorized by Bayer Corp. and no part of it is to be disclosed to
others without prior written permission from Bayer Corp.

 

Confidential Evaluation
Material Subject to Confidentially Agreement

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

7 of 11

 

	
  Exhibit B

  	
   

  	
  Execution Copy

  

 

	
  

  	
  BIOLOGICAL
  PRODUCTS PURCHASE SPECIFICATION

  	
  SAP
  MATERIAL #:

  	
  08633072

  08658989

  
	
   

  	
   

  	
  REVISION:
  NEW

  
	
   

  	
  TITLE: 

  	
  ALPHA-1 COLUMN ELUATE PROCESSED AT BAYER HEALTHCARE’S BERKELEY, CA 

  FACILITY

  	
  PAGE 3 of 4

  ATTACHMENT 1

  
					

 

	
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  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

CONFIDENTIAL

 

This material is the property of Bayer Corp. The information is
confidential and is to be used only in connection with matters authorized by
Bayer Corp. and no part of it is to be disclosed to others without prior
written permission from Bayer Corp.

 

Confidential Evaluation Material Subject to
Confidentially Agreement

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

8 of 11

 

	
  Exhibit B

  	
   

  	
  Execution Copy

  

 

	
  

  	
  BIOLOGICAL
  PRODUCTS PURCHASE SPECIFICATION

  	
  SAP
  MATERIAL #:

  	
  08633072

  08658989

  
	
   

  	
   

  	
  REVISION:
  NEW

  
	
   

  	
  TITLE: 

  	
  ALPHA-1 COLUMN ELUATE PROCESSED AT 

  BAYER HEALTHCARE’S BERKELEY, CA 

  FACILITY

  	
  PAGE 4 of 4

  ATTACHMENT 1

  
					

 

	
  [***]

  	
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       [***]

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    [***]

  	
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[***]

 

	
  [***]

  	
  [***]

  	
   

  
	
   

  	
  [***]

  

 

CONFIDENTIAL

 

This material is the property of Bayer Corp. The information is
confidential and is to be used only in connection with matters authorized by
Bayer Corp. and no part of it is to be disclosed to others without prior
written permission from Bayer Corp.

 

Confidential Evaluation Material Subject to
Confidentially Agreement

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

9 of 11

 

	
  Exhibit B

  	
   

  	
  Execution Copy

  

 

	
  

  	
  BIOLOGICAL
  PRODUCTS PURCHASE SPECIFICATION

  	
  SAP
  MATERIAL #:

  	
  08633072

  08658989

  
	
   

  	
   

  	
  REVISION:
  NEW

  
	
   

  	
  TITLE: 

  	
  ALPHA-1 COLUMN ELUATE PROCESSED AT BAYER HEALTHCARE’S BERKELEY, CA FACILITY

  	
  PAGE 1 of 1

  ATTACHMENT 2

  
					

 

EXAMPLE OF COLUMN ELUATE LABEL

 

	
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  [***]

  	
   

  	
   

  

 

[***]

[***]

[***]

 

CONFIDENTIAL

 

This material is the property of Bayer Corp. The information is
confidential and is to be used only in connection with matters authorized by
Bayer Corp. and no part of it is to be disclosed to others without prior
written permission from Bayer Corp.

 

Confidential Evaluation Material Subject to
Confidentiality Agreement

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

10 of 11

 

	
  Exhibit B

  	
   

  	
  Execution Copy

  

 

	
  

  	
  BIOLOGICAL
  PRODUCTS PURCHASE SPECIFICATION

  	
  SAP
  MATERIAL #:

  	
  08633072

  08658989

  
	
   

  	
   

  	
  REVISION:
  NEW

  
	
   

  	
  TITLE: 

  	
  ALPHA-1 COLUMN ELUATE PROCESSED AT BAYER HEALTHCARE’S BERKELEY, CA FACILITY

  	
  PAGE 1 of 1

  ATTACHMENT 3

  
					

 

BERKELEY COLUMN ELUATE PROCESS FLOW DIAGRAM

 

[***]

[***]

[***]

[***]

[***]

[***]

[***]

 

 

CONFIDENTIAL

 

This material is the property of Bayer Corp. The information is
confidential and is to be used only in connection with matters authorized by
Bayer Corp. and no part of it is to be disclosed to others without prior
written permission from Bayer Corp.

 

Confidential Evaluation Material Subject to
Confidentiality Agreement

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

11 of
11

 

	
  Exhibit C

  	
   

  	
  Execution Copy

  

 

	
  Revised February 11, 1994

  	
   

  	
  5-1

  
	
  AT-III (H)

  	
   

  	
   

  

 

SPECIFICATIONS FOR ANTITHROMBIN III (HUMAN)

 

	
  Test

  	
   

  	
  Specification

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  AT-III

  	
   

  	
  [***]

  	
   

  
	
  2.

  	
   

  	
  Protein

  	
   

  	
  [***]

  	
   

  
	
  3.

  	
   

  	
  Specific
  Activity

  	
   

  	
  [***]

  	
   

  
	
  4.

  	
   

  	
  Moisture

  	
   

  	
  [***]

  	
   

  
	
  5.

  	
   

  	
  pH

  	
   

  	
  [***]

  	
   

  
	
  6.

  	
   

  	
  Sodium

  	
   

  	
  [***]

  	
   

  
	
  7.

  	
   

  	
  Chloride

  	
   

  	
  [***]

  	
   

  
	
  8.

  	
   

  	
  Solubility

  	
   

  	
  [***]

  	
   

  
	
  9.

  	
   

  	
  Visual

  	
   

  	
  [***]

  	
   

  
	
  10.

  	
   

  	
  EIA for
  HBsAg 

  	
   

  	
  [***]

  	
   

  
	
  11.

  	
   

  	
  Pyrogen

  	
   

  	
  21 CFR
  610.13 Pass

  	
   

  
	
  12.

  	
   

  	
  Safety

  	
   

  	
  21 CFR
  610.11 Pass

  	
   

  
	
  13.

  	
   

  	
  Sterility

  	
   

  	
  21 CFR
  610.12 Pass

  	
   

  
	
  14.

  	
   

  	
  Identity
  test for packaged final container, Immunoprecipitation method

  	
   

  	
  [***]

  	
   

  
	
  15.

  	
   

  	
  Alanine

  	
   

  	
  [***]

  	
   

  
	
  16.

  	
   

  	
  Heparin

  	
   

  	
  [***]

  	
   

  
	
  17.

  	
   

  	
  Vacuum (for
  final container sealed under vacuum)

  	
   

  	
  [***]

  	
   

  
	
  18.

  	
   

  	
  Molecular
  Weight Distribution

  	
   

  	
  [***]

  	
   

  

 

	
  DRAFT

  	
  CONFIDENTIAL

  	
  DRAFT

  

 

THIS MATERIAL IS THE PROPERTY OF MILES INC. THE INFORMATION IS
CONFIDENTIAL AND IS TO BE USED ONLY IN CONNECTION WITH MATTERS AUTHORIZED BY MILES
INC. AND NO PART OF IT IS TO BE DISCLOSED TO OTHERS WITHOUT PRIOR WRITTEN
PERMISSION FROM MILES INC.

 

Confidential Evaluation Material Subject to
Confidentiality Agreement

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

1 of 1

 

	
   

  	
  Exhibit D

  	
  Execution Copy

  

 

	
  

  	
  Bayer Corporation

  Pharmaceutical Division

  Berkeley, CA 94710

  	
  Page 1 of 2

  

 

	
  SPECIFICATION SHEET

  	
   

  	
  Material No:

  	
  08633498

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Legacy
  Catalog No. 19A601K)

  	
   

  
	
  DISTRIBUTION:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BERKELEY: 

  	
  L. Cianella(3), L.Hilbig, R. Hein,

  	
   

  	
  Title:   FRACTION IV-1 PASTE (HUMAN)

  	
   

  
	
   

  	
  L. Keily, QA
  Compliance, QA Library

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Rev. No.:

  	
  002

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CLAYTON:

  	
  S. Hudson

  	
   

  	
  Date: 

  	
  NOV 26 2002

  	
   

  
								

 

1.     PURPOSE

Fraction IV-1 paste is used for manufacturing Alpha1-Proteinase
Inhibitor (Human). Berkeley QA will inspect and release the paste as they do
for other raw materials.

 

2.     DESCRIPITION

2.1     Description:            Fraction IV-1 Paste from the process used
in the manufacture of Alpha1-Proteinase Inhibitor (Human)

2.2     Manufacturer:        Bayer Corp., Clayton, North Carolina

 

3.     [***]

[***]

[***]

[***]

 

	
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[***]

[***]

[***]

 

[***]

 

	
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  [***]

  	
   

  	
  [***]

  	
   

  

 

Confidential Evaluation Material Subject to
Confidentiality Agreement

 

***         Confidential TREATMENT REQUESTED

 

 

	
   

  	
  Exhibit D

  	
  Execution Copy

  

 

	
  

  	
  Bayer Corporation

  Pharmaceutical Division

  Berkeley, CA 94710

  	
  Page 2 of 2

  

 

	
  SPECIFICATION SHEET

  	
   

  	
  Material No:

  	
  08633498

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Legacy
  Catalog No. 19A601K)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:   FRACTION IV-1 PASTE (HUMAN)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Rev. No.:

  	
  002

  	
   

  
								

 

4.     [***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

 

5.     LABELING AND PACKAGING

5.1            The paste 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.

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

 

Material Name

Gross Weight

Net Weight

Tare Weight

Lot No.

Date Manufactured

Expiration Date

 

6.     [***]

[***]

 

7.     [***]

 

[***]

 

[***]

[***]

[***]

[***]

[***]

 

	
   

  	
   

  	
  APPROVED BY:

  	
  /s/ R. Hein 

  	
  11/21/02

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPROVED BY:

  	
  /s/ E. Helgeson 

  	
  11/25/02

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  APPROVED BY:

  	
  /s/ C.Maas 

  	
  11/26/02

  	
   

  

 

Confidential Evaluation Material Subject to
Confidentiality Agreement

 

***         Confidential TREATMENT REQUESTED

 

 

	
   

  	
  Exhibit D

  	
  Execution Copy

  

 

	
  

  	
  Bayer HealthCare

  Biological Products Division

  	
  Bayer Healthcare LLC

  Quality Assurance

  Berkeley, California

  	
  Page 1 of 3

  

 

	
  SPECIFICATION SHEET

  	
   

  	
  Material No:

  	
  08632688

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DISTRIBUTION:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BERKELEY: 

  	
  A. Ewing, J.
  Glover, C. Gurecki,

  	
   

  	
  Title:   Fraction IV-1 Paste (Human)

  	
   

  
	
   

  	
  E. Helgeson,
  D. Iseyama (3),

  	
   

  	
   

  	
  (Processed
  by Precision Pharma Services, Inc.)

  	
   

  
	
   

  	
  M. Steichen,
  S. Tiu, A. Warford,

  	
   

  	
   

  	
   

  
	
   

  	
  QA
  Compliance, QA Library

  	
   

  	
  Rev. No.:

  	
  003

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CLAYTON:

  	
  S. Hudson

  	
   

  	
  Date: 

  	
  NOV 17 2004

  	
   

  
									

 

1.     PURPOSE

To provide specifications for the receipt of Fraction IV-1 Paste
manufactured by Precision Pharma Services, Inc. from plasma provided by Bayer.
Fraction IV-1 paste is used for manufacturing Alpha1-Proteinase
Inhibitor (Human). Berkeley Quality will inspect and release the paste as they
do for other raw materials.

 

2.     REFERENCE

2.1     Bayer (Clayton) purchase specification 08633056,
Fraction IV-1 Paste Processed by Precision Pharma Services, Inc. Melville, New
York.

 

3.     DESCRIPTION

3.1     Fraction IV-1 Paste refers to a paste fraction
obtained by processing plasma using the FDA approved method for by Precision
Pharma Services, Inc, according to their approved PLA and the Process Flow
Specification.

3.2     The Fraction IV-1 paste is to be manufactured from
source plasma initially received by Bayer and provided to by Precision Pharma
Services, Inc.

3.3     The Fraction IV-1 Paste shall be shipped to
Clayton, NC upon Bayer QA approval and at the request of Bayer Materials
Management. Bayer (Clayton) will ship portions of the IV-1 Paste to Bayer
(Berkeley) to support manufacturing requirements.

 

4.     [***]

[***]

[***]

[***]

[***]

 

	
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  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  

[***]

[***]

[***]

 

Confidential Evaluation Material Subject to
Confidentiality Agreement

 

***         Confidential TREATMENT REQUESTED

 

 

	
   

  	
  Exhibit D

  	
  Execution Copy

  

 

	
  

  	
  Bayer HealthCare

  Biological Products Division

  	
  Bayer Healthcare LLC

  Quality Assurance

  Berkeley, California

  	
  Page 2 of 3

  

 

	
  SPECIFICATION SHEET

  	
   

  	
  Material No:

  	
  08632688

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:   Fraction IV-1 Paste (Human)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Processed
  by Precision Pharma Services, Inc.)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Rev. No.:

  	
  003

  	
   

  
									

 

[***]

 

[***]

 

	
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  [***]

  	
   

  
	
  [***]

  	
   

  	
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  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  

 

5.     [***]

[***]

[***]

[***]

[***]

[***]

[***]

[***]

 

6.     LABELING AND PACKAGING

6.1            The Paste 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.

6.2            The Poly bags and
plastic totes shall be identified with the following information:

 

Material Name

Gross Weight

Net Weight

Tare Weight

Batch No.

Date Manufactured

Expiration Date

 

7.     [***]

[***]

[***]

[***]

 

Confidential Evaluation Material Subject to
Confidentiality Agreement

 

***         Confidential TREATMENT REQUESTED

 

 

 

	
   

  	
  Exhibit D

  	
  Execution Copy

  

 

	
  

  	
  Bayer HealthCare

  Biological Products Division

  	
  Bayer Healthcare LLC

  Quality Assurance

  Berkeley, California

  	
  Page 3 of 3

  

 

	
  SPECIFICATION SHEET

  	
   

  	
  Material No:

  	
  08632688

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:   Fraction IV-1 Paste (Human)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Processed
  by Precision Pharma Services, Inc.)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Rev. No.:

  	
  003

  	
   

  
									

 

8.     [***]

[***]

[***]

[***]

[***]

[***]

[***]

 

	
  APPROVED BY:

  	
   

  	
  /s/ J.Glover 

  	
  DATE: 

  	
  9/17/04

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  APPROVED BY:

  	
   

  	
  /s/ L. Kelly 

  	
  DATE: 

  	
  10-7-04

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  APPROVED BY: 

  	
   

  	
  /s/ Ben Schwartz

  	
  DATE:

  	
  10-12-04

  

 

Confidential Evaluation Material Subject to
Confidentiality Agreement

 

***         Confidential TREATMENT REQUESTED

 

 

	
  Exhibit E

  	
   

  	
  Execution Copy

  

 

	
  

  	
  Bayer HealthCare

  Biological Products Division

  	
  Bayer Healthcare LLC

  Quality Assurance

  Berkeley, California

  	
  Page 1 of 3

  

 

	
  SPECIFICATION SHEET

  	
   

  	
  Catalog No.:

  	
  08633501-19A601P

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DISTRIBUTION:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BERKELEY: 

  	
  L. Cianeila
  (3), A. Ewing, J. Glover,

  	
   

  	
  Title:   ALPHA - 1 (PEG) INTERMEDIATE PASTE

  	
   

  
	
   

  	
  C. Gurecki, E. Helgeson, L.
  Hilbig,

  	
   

  	
   

  	
  (Manufactured from Bayer
  IV-1 Paste)

  	
   

  
	
   

  	
  M. Steichen, A. Warford,

  	
   

  	
   

  	
   

  
	
   

  	
  QA Compliance, QA Library

  	
   

  	
  Rev. No.:

  	
  002

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CLAYTON:

  	
  S. Hudson

  	
   

  	
  Date: 

  	
   

  	
   

  
									

 

1.     PURPOSE

Alpha-1
Intermediate Paste is used for manufacturing Alpha1-Proteinase
Inhibitor (Human). Berkeley QA will inspect and release the paste as they do
for other raw materials.

 

2.     DESCRIPTION

2.1      Description:       Alpha-1 Intermediate Paste is from the process
used in the manufacture of Alpha1 Proteinase Inhibitor (Human)

 

2.2      Manufacturer:    Bayer Corp.,
Clayton, North Carolina

 

3.     [***]

[***]

 

[***]

[***]

 

	
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[***]

 

	
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  [***]

  	
   

  	
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  [***]

  	
   

  	
  [***]

  	
   

  

 

Confidential Evaluation Material Subject to
Confidentiality Agreement

 

***         Confidential TREATMENT REQUESTED

 

 

	
  Exhibit E

  	
   

  	
  Execution Copy

  

 

	
  

  	
  Bayer HealthCare

  Biological Products Division

  	
  Bayer Healthcare LLC

  Quality Assurance

  Berkeley, California

  	
  Page 2 of 3

  

 

	
  SPECIFICATION SHEET

  	
   

  	
  Catalog No.:

  	
  08633501-19A601P

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:   ALPHA - 1 (PEG) INTERMEDIATE PASTE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Manufactured from Bayer
  IV-1 Paste)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Rev. No.:

  	
  002

  	
   

  
									

 

[***]

 

	
  [***]

  	
   

  	
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  [***]

  	
   

  	
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  [***]

  	
   

  	
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  [***]

  	
   

  

[***]

 

4.     [***]

[***]

[***]

[***]

[***]

[***]

[***]

 

5.     LABELING AND PACKAGING

5.1       The paste shall be double bagged using
polyethylene bags (tote box liner 08655114-850046000). 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.

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

 

Material
Number

Material Name

Batch
No.

Gross Weight

Net Weight

Tare Weight

Date Manufactured

Expiration Date

 

6.     [***]

            [***]

 

Confidential Evaluation Material Subject to
Confidentiality Agreement

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

 

	
  Exhibit E

  	
   

  	
  Execution Copy

  

 

	
  

  	
  Bayer HealthCare

  Biological Products Division

  	
  Bayer Healthcare LLC

  Quality Assurance

  Berkeley, California

  	
  PAGE 3 of 3

  

 

	
  SPECIFICATION SHEET

  	
   

  	
  Catalog No.:

  	
  08633501-19A601P

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:   ALPHA - 1 (PEG) INTERMEDIATE PASTE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Manufactured from Bayer
  IV-1 Paste)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Rev. No.:

  	
  002

  	
   

  
									

 

7.     [***]

[***]

[***]

[***]

[***]

[***]

[***]

 

	
  APPROVED BY:

  	
   

  	
  /s/ J. Glover

  	
  DATE: 

  	
  8/7/03

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  APPROVED BY:

  	
   

  	
  /s/ E. Helgeson

  	
  DATE: 

  	
  8/7/03

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  APPROVED BY: 

  	
   

  	
  /s/ C. Maas

  	
  DATE:

  	
   8/7/03

  	
   

  

 

Confidential Evaluation Material Subject to
Confidentiality Agreement

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

 

 

	
  Exhibit F

  	
   

  	
  Execution Copy

  

 

	
  NewCo
  and Bayer HealthCare LLC, Berkeley

  	
  Page 1 of 3

  
	
  Manufacturing
  Agreement (Paste to Column Eluate)

  	
   

  

 

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 Fraction IV-1/PEG Paste (Paste) that is further
manufactured into column eluate at Bayer and returned to NewCo, 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 Paste hereunder from
the NewCo Clayton manufacturing facility and/or the final shipment of column
eluate from the Bayer Berkeley manufacturing facility, 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 Paste, from the process used in
the manufacture of Albumin (Human), to Bayer. Said material will be furnished
as paste in bulk containers and will be labeled to indicate that further
manufacturing, processing, or repacking is intended. Bayer will further
manufacture the Paste into column eluate and return the column eluate to NewCo
for further manufacturing, processing, or repacking into final container
product. Paste 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. Paste shall meet the specifications
attached hereto as Exhibit A (Paste Specifications), which Paste Specifications
may be amended from time-to-time by mutual written agreement of the parties.

 

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

 

 

	
  Exhibit F

  	
   

  	
  Execution Copy

  

 

	
  NewCo
  and Bayer HealthCare LLC, Berkeley

  	
  Page 2 of 3

  
	
  Manufacturing
  Agreement (Paste to Column Eluate)

  	
   

  

 

 

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 Paste 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 105 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 Albumin (Human).
NewCo grants permission to Bayer to reference the NewCo Biologics License for
the description of the manufacturing facility and the details for the Albumin
(Human) manufacturing process as it relates to the manufacturing of Paste.

 

Bayer
will receive and further manufacture Paste into column eluate. Manufacturing
will be performed according to Current Good Manufacturing Practices and in
accordance with the Bayer Biologics License Application (formerly known as the
Establishment License and the Product License Application for Albumin (Human).
Bayer grants permission to NewCo to reference the Bayer Biologics License for
the description of the manufacturing facility and the details for the Albumin
(Human) manufacturing process as it relates to the manufacturing of column
eluate. Column eluate shall meet the specifications attached hereto as Exhibit
B (Column Eluate Specifications), which Column Eluate Specifications may be
amended from time-to-time by mutual written agreement of the parties.

 

The
Paste and column eluate will be stored and shipped at -20oC or colder. Shipping
temperature will be verified for each shipment in accordance to the Paste
Specifications or the Column Eluate Specifications, as applicable.

 

NewCo
shall include a certificate of analyses with each shipment of Paste specifying
the results of its testing and analyses to show conformance with the Paste
Specifications. Bayer shall include a certificate of analyses with each
shipment of column eluate disclosing the results of its testing and showing
conformance with the Column Eluate Specifications.

 

NewCo
represents and warrants that the Paste provided to Bayer hereunder is not
adulterated or misbranded within the meaning of the Federal Food, Drug, and
Cosmetic Act. Bayer represents and warrants that the column eluate provided to
NewCo 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 Paste from the process used by NewCo in the
manufacture of Albumin (Human) shipped in bulk quantities to Bayer for further
manufacture and to all column eluate from the process used by Bayer in the
manufacture of Albumin (Human) shipped in bulk quantities to NewCo for further
manufacture. This Agreement is effective from the Effective Date and will be
renewed annually.

 

5.             WARNING

 

Paste
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
Paste 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

 

Confidential Evaluation Material Subject to
Confidentiality Agreement

 

 

	
  Exhibit
  F

  	
   

  	
  Execution Copy

  
	
   

  	
   

  	
   

  
	
  NewCo and
  Bayer HealthCare LLC, Berkeley

  	
   

  	
   

  
	
  Manufacturing
  Agreement (Paste to Column Eluate)

  	
   

  	
  Page 3 of 3

  

 

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.

 

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

 

 

	
  Exhibit
  G

  	
   

  	
  Execution Copy

  
	
   

  	
   

  	
   

  
	
  NewCo and
  Bayer HealthCare LLC, Berkeley

  	
   

  	
   

  
	
  Manufacturing
  Agreement (Paste to Antithrombin-III)

  	
   

  	
  Page 1 of 3

  

 

MANUFACTURING AGREEMENT

 

This Manufacturing Agreement (Agreement) is between Talecris
Biotherapeutics, Inc. (f/k/a NPS Bio Therapeutics, 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 Fraction IV-1 Paste (Paste) that is
further manufactured into Antithrombin-III (AT-III) at Bayer and returned to
NewCo, 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 Paste
hereunder from the NewCo Clayton manufacturing facility and/or the final
shipment of AT-III from the Bayer Berkeley manufacturing facility, 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 Paste, from the
process used in the manufacture of Albumin (Human), to Bayer. Said material
will be furnished as paste in bulk containers and will be labeled to indicate
that further manufacturing, processing, or repacking is intended. Bayer will
further manufacture the Paste into AT-III and return the AT-III to NewCo for
further manufacturing, processing or repacking into final container product.
Paste 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. Paste shall meet the
specifications attached hereto as Exhibit A (Paste Specifications), which Paste
Specifications may be amended from time-to-time by mutual written agreement of
the parties.

 

Confidential Evaluation Material Subject to
Confidentiality Agreement

 

 

	
  Exhibit
  G

  	
   

  	
  Execution Copy

  
	
   

  	
   

  	
   

  
	
  NewCo and
  Bayer HealthCare LLC, Berkeley

  	
   

  	
   

  
	
  Manufacturing
  Agreement (Paste to Antithrombin-III)

  	
   

  	
  Page 2 of 3

  

 

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), 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 Paste 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 Albumin (Human). NewCo grants permission to Bayer to reference
the NewCo Biologics License for the description of the manufacturing facility
and the details for the Albumin (Human) manufacturing process as it relates to
the manufacturing of Paste.

 

Bayer will receive and further manufacture Paste into AT-III.
Manufacturing will be performed according to Current Good Manufacturing
Practices and in accordance with the Bayer Biologics License Application
(formerly known as the Establishment License and the Product License
Application for AT-III (Human). Bayer grants permission to NewCo to reference
the Bayer Biologics License for the description of the manufacturing facility
and the details for the AT-III (Human) manufacturing process as it relates to
the manufacturing of AT-III. AT-III shall meet the specifications attached
hereto as Exhibit B (AT-III Specifications), which AT-III Specifications may be
amended from time-to-time by mutual written agreement of the parties.

 

The Paste and AT-III will be stored and shipped at -20° or colder.
Shipping temperature will be verified for each shipment in accordance to the
Paste Specifications or the AT-III Specifications, as applicable.

 

NewCo shall include a certificate of analyses with each shipment of
Paste specifying the results of its testing and analyses to show conformance
with the Paste Specifications. Bayer shall include a certificate of analyses
with each shipment of AT-III disclosing the results of its testing and showing
conformance with the AT-III Specifications.

 

NewCo represents and warrants that the Paste provided to Bayer
hereunder is not adulterated or misbranded within the meaning of the Federal
Food, Drug, and Cosmetic Act. Bayer represents and warrants that the AT-III
provided to New Co 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 Paste from the process used by NewCo
in the manufacture of Albumin (Human) shipped in bulk quantities to Bayer for
further manufacture and to all AT-III from the process used by Bayer in the
manufacture of Albumin (Human) shipped in bulk quantities to NewCo for further
manufacturing and/or labeling. This Agreement is effective from the Effective
Date and will be renewed annually.

 

Confidential Evaluation Material Subject to
Confidentiality Agreement

 

 

	
  Exhibit
  G

  	
   

  	
  Execution Copy

  
	
   

  	
   

  	
   

  
	
  NewCo and
  Bayer HealthCare LLC, Berkeley

  	
   

  	
   

  
	
  Manufacturing
  Agreement (Paste to Antithrombin-III)

  	
   

  	
  Page 3 of 3

  

 

5.             WARNING

 

Paste 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 Paste 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.

 

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 H

Expected Yield Calculation

 

Yields will be calculated based on two steps:

 

Step # 1: Absolute Weight

For every 1KG of IV-I paste input from Clayton, target weight returned
from Berkeley will equal [***] Column Eluate.

 

Step # 2 Potency

Target potency will be equal to [***] of step yield of IV-I paste to
column eluate.

 

Example:

IV-I Paste Input from Clayton = [***] of Plasma of Alpha 1 in IV-I
Paste

 

Column Eluate Output =[***] x [***] = [***] of Plasma in Column Eluate

 

Confidential Evaluation Material Subject to
Confidentiality Agreement

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

Page 1 of 1

 

Execution Copy

 

EXHIBIT I

 

PRICE

 

For calendar year 2004, [***] of Intermediate Product Eluate and [***]
of ATIII.

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

 

Execution Copy

 

Exhibit J

 

Purchaser’s Intellectual Property

 

	
  Patent

  	
   

  	
  Country Code

  	
   

  	
  Patent 

  Number

  	
   

  	
  Application

   Number

  	
   

  	
  Expiration Date

  	
   

  
	
  METHOD OF PREPARING ALPHA-1-

  	
   

  	
  US

  	
   

  	
  4656254

  	
   

  	
  803184

  	
   

  	
  Expires 12/02/05

  	
   

  
	
  PROTEINASE INHIBITOR AND 

  	
   

  	
  AU

  	
   

  	
  591734

  	
   

  	
  65888/86

  	
   

  	
  Expires 12/02/06

  	
   

  
	
  ANTITHROMBIN III - 

  	
   

  	
  CA

  	
   

  	
  1298032

  	
   

  	
  524266

  	
   

  	
  Expires 03/24/09

  	
   

  
	
  PROLASTIN® Alpha-1 PI

  	
   

  	
  EP

  	
   

  	
  0224811

  	
   

  	
  86116125.5

  	
   

  	
  Expires 11/21/06

  	
   

  
	
   

  	
   

  	
  JP

  	
   

  	
  2030723

  	
   

  	
  284445/86

  	
   

  	
  Expires 12/01/06

  	
   

  

 

	
  Patent

  	
   

  	
  Country

  Code

  	
   

  	
  Patent 

  Number

  	
   

  	
  Application 

  Number

  	
   

  	
  Expiration Date

  	
   

  
	
  VIRAL INACTIVATION AND 

  	
   

  	
  US

  	
   

  	
  4749783

  	
   

  	
  884446

  	
   

  	
  Expires 07/11/06

  	
   

  
	
  PURIFICATION OF ACTIVE PROTEINS-

  	
   

  	
  AU

  	
   

  	
  589868

  	
   

  	
  74975/87

  	
   

  	
  Expires 06/30/07

  	
   

  
	
  THROMBATE® AT-III(1)

  	
   

  	
  CA

  	
   

  	
  1,341,269

  	
   

  	
  541758

  	
   

  	
  Expires 07/10/18

  	
   

  
	
   

  	
   

  	
  SG

  	
   

  	
  252392

  	
   

  	
  9790283-7

  	
   

  	
  Expires 06/27/07

  	
   

  

 

(1) Subject to the Retained Intellectual Property License per the Joint
Contribution Agreement.

 

Confidential Evaluation Material Subject to
Confidentiality Agreement

 

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