Document:

exv10w9

 

Exhibit 10.9

SUPPLY AGREEMENT

This Agreement made as of the 8th day of May, 2001 among:

	 	 	 	WESTAIM BIOMEDICAL CORP., a corporation incorporated under the laws
of Alberta
	 
	 	 	 	(hereinafter referred to as “Westaim”)

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	 	 	 	SMITH & NEPHEW INC., a corporation incorporated under the laws of
Canada, SMITH & NEPHEW, INC., a corporation incorporated under the
laws of the State of Delaware in the United States of America, and
T.J. SMITH & NEPHEW LIMITED, a corporation formed and organized under the laws of England and
Wales
	 
	 	 	 	(hereinafter collectively referred to as “S&N”)

WHEREAS Westaim, Westaim Biomedical Inc. and S&N have agreed to a license and development
arrangement concerning the development and promotion in a specified field of use of certain
existing and future products based on Westaim’s nanocrystalline silver antimicrobial coating
technology, all as set out in the License and Development Agreement (as defined herein) and will,
inter alia, enter into an asset purchase agreement and a transitional services agreement;

AND WHEREAS Westaim and S&N have agreed that Westaim will manufacture and supply exclusively
within the Field (as defined herein) to S&N and S&N will exclusively purchase from Westaim such
products, all upon the terms and subject to the conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the premises and covenants contained herein and other good and
valuable consideration, the receipt and sufficiency of which is hereby agreed to by the parties,
and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE 1

DEFINITIONS

Section 1.1 Definitions

In this Agreement, unless otherwise provided, the following terms shall have the following
meanings:

	 	1.1.1	 	“Acticoat Absorbent Dressing Product” means the Acticoat absorbent
dressing product (referred to in FDA 510 K number K002896) which has the features

 

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	 	 	 	set out in the Specifications set out in Schedule A and which was marketed and sold by
Westaim under the tradename “Acticoat Absorbent Dressing” immediately prior to the
Effective Date, together with all Improvements thereto which Westaim and S&N agree in
writing to implement;
	 
	 	1.1.2	 	“Acticoat Moisture Control Dressing Product” means the Acticoat moisture control dressing
product (referred to in FDA 510 K number K010447) which has the features set out in the
Specifications set out in Schedule B and which was marketed and sold by Westaim under the
tradename “Acticoat Moisture Control Dressing” immediately prior to the Effective Date,
together with all Improvements thereto which Westaim and S&N agree in writing to implement;
	 
	 	1.1.3	 	“Acticoat Product” means the Acticoat product (referred to in FDA 510 K numbers K955453)
which has the features set out in the Specifications set out in Schedule C and which was
marketed and sold by Westaim under the tradename “Acticoat” or “Acticoat Burn Dressing”
immediately prior to the Effective Date, together with all Improvements thereto which Westaim
and S&N agree in writing to implement;
	 
	 	1.1.4	 	“Acticoat 7 Product” means the Acticoat product (referred to in FDA 510 K number K001519)
which has the features set out in the Specifications set out in Schedule D and which was
marketed and sold by Westaim under the tradename “Acticoat 7” immediately prior to the
Effective Date, together with all Improvements thereto which Westaim and S&N agree in writing
to implement;
	 
	 	1.1.5	 	“Affiliates” means any Person that directly or indirectly controls, is controlled by, or is
under common control with another Person. A Person shall be deemed to “control” another
business entity if it owns, directly or indirectly, more than fifty percent (50%) of the
outstanding voting securities, capital stock, partnership interest or other comparable equity
or ownership interest of such Person. If the laws of the jurisdiction in which such Person
operates prohibit ownership of more than fifty percent (50%), control shall be deemed to exist
at the maximum level of ownership allowed by such jurisdiction;
	 
	 	1.1.6	 	“Agreement” means this supply agreement, together with all schedules hereto and any
amendments to or restatements of this supply agreement;
	 
	 	1.1.7	 	“Asset Purchase Agreement” means the asset purchase agreement of even date herewith between
Westaim and Smith & Nephew, Inc., together with all Schedules thereto and any amendments to or
restatements of such asset purchase agreement;
	 
	 	1.1.8	 	“Business Day” means any day except a day that is a Saturday, a Sunday or a statutory
holiday in Alberta;
	 
	 	1.1.9	 	“Claim” has the meaning attributed to that term in Section 9.4;

 

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	 	1.1.10	 	“Confidential Information” has the meaning attributed to that term in Section
8.1;
	 
	 	1.1.11	 	“Distribution Royalties” has the meaning attributed to that term in the License and
Development Agreement;
	 
	 	1.1.12	 	“Effective Date” means 11:59 pm Calgary time on the 8th day of May, 2001, or such other time
and date as the parties to this Agreement may agree upon in writing;
	 
	 	1.1.13	 	“Equipment” means the equipment listed in Schedule E and any New Equipment which
subsequently becomes Equipment as provided in Section 11.11;
	 
	 	1.1.14	 	“Escrow Agreement” means the manufacturing, technology, escrow agreement of even date
herewith among S&N, Westaim, Westaim Biomedical Inc., and Montreal Trust Company of Canada,
together with all schedules thereto and any amendments to or restatements of such
manufacturing technology escrow agreement;
	 
	 	1.1.15	 	“Event Milestone Payments” means payments under Section 6.4 of the License and Development
Agreement;
	 
	 	1.1.16	 	“FDA” means the United States Food and Drug Administration, or any successor organization;
	 
	 	1.1.17	 	“Field” has the meaning attributed to that term in the License and Development Agreement;
	 
	 	1.1.18	 	“First Refusal Free Transfer Period” has the meaning attributed to that term in Section
12.7;
	 
	 	1.1.19	 	“First Refusal Transfer Closing Date” has the meaning attributed to that term in Section
12.7;
	 
	 	1.1.20	 	“First Refusal Transfer Notice” has the meaning attributed to that term in Section 12.7;
	 
	 	1.1.21	 	“First Refusal Transfer Period” has the meaning attributed to that term in Section 12.7;
	 
	 	1.1.22	 	“Fixed Cost Portion of Fully Allocated Cost of Goods” means the portion of Fully Allocated
Cost of Goods (without regard for the proviso in such definition concerning the limitation on
the increase of the Fixed Cost Portion of Fully Allocated Cost of Goods) that does not relate
in any way to: variable costs, including, without limitation, costs relating to raw materials
and any other costs which increase or decrease depending upon the volume of Product produced;
costs not within the control of Westaim or its Affiliates, including

 

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	 	 	 	without limitation the costs of supplies or services provided by third parties; costs
incurred as a result of complying with an order or request of a governmental authority
or regulatory body that relates to manufacturing or the manufacturing facilities; costs
incurred at the request of S&N; and any costs resulting from increases in the amount of
compensation to employees of Westaim or its Affiliates if such increase was a part of a
general increase in the amount of compensation to employees in similar positions within
Westaim;

	 	1.1.23	 	“Force Majeure Event” means the events described in Section 12.1;
	 
	 	1.1.24	 	“Free Transfer Period” has the meaning attributed to that term in Section 12.6;
	 
	 	1.1.25	 	“Fully Allocated Cost of Goods” means with respect to the manufacture and supply of a
particular Product, the aggregate of

	 	1.1.25.1	 	direct material, direct labour and subcontracted costs incurred by Westaim in
connection with the procurement of raw materials or production, manufacture,
processing, labeling, testing, transportation and packaging of such Product, and
	 
	 	1.1.25.2	 	S&N’s proportionate share of indirect costs incurred by Westaim relating to
the manufacturing and manufacturing facilities (“Manufacturing Costs”)
related to such Product including administration and labour (in either
case relating to the manufacturing), depreciation on equipment owned by Westaim, rent,
insurance, utilities, taxes (excluding taxes on income), repairs, maintenance,
cleaning, training, quality control and the like, with such calculation to be made in
accordance with Canadian GAAP. S&N’s proportionate share of such indirect costs
shall be based on the percentage of the aggregate Manufacturing Costs in the
reporting period for which S&N is responsible under this Agreement, being, for
Equipment (other than New Equipment) [***] (or [***] if Westaim has relinquished its [***] reservation of capacity) less
the proportion of Production Capacity (in excess of any such reserve capacity, if
applicable) actually used by Westaim in the reporting period for purposes authorized
by this Agreement, and for New Equipment, the actual usage of such New Equipment by
Westaim in the reporting period for purposes authorized by this Agreement as a
percentage of actual use by Westaim for other purposes.

	 	 	 	provided, however, that for purposes of this Agreement, the Fixed Cost Portion of
Fully Allocated Cost of Goods shall not rise from one calendar year to the next by a
percentage amount that exceeds the greater of [***] and the percentage
increase in the Consumer Price Index, as published by Statistics Canada, from such
calendar year to the next;
	 
	 	1.1.26	 	“Governmental Permits” has the meaning attributed to that term in Section 2.4;

 

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	 	1.1.27	 	“Improvements” has the meaning attributed to that term in the License and
Development Agreement;
	 
	 	1.1.28	 	“Knowledge” means, in the case of S&N the actual knowledge of Stephen Lang, Simon Dawkins,
Jim Irvin, Janine Lepage and Martin Allen after reasonable inquiry, and, in the case of
Westaim, means the actual knowledge of Barry Heck, Scott Gillis and Dominic Vatelero, after
reasonable inquiry;
	 
	 	1.1.29	 	“License and Development Agreement” means the license and development agreement of even date
herewith among Westaim, Westaim Biomedical Inc., T.J. Smith & Nephew Limited and Smith &
Nephew, Inc., together with all schedules thereto and any amendments to or restatements of
such agreement;
	 
	 	1.1.30	 	“Lien” means, with respect to any property, any assignment, mortgage, charge, pledge, lien,
hypothec, conditional sale or title retention agreement, lease, levy, execution, seizure,
attachment, garnishment or other similar encumbrance or security interest in respect of such
property, howsoever arising (including, without limitation, pursuant to applicable law),
whether absolute or contingent, fixed or floating, legal or equitable, perfected or otherwise;
	 
	 	1.1.31	 	“Manufacturing Assets” has the meaning attributed to that term in Section 12.6;
	 
	 	1.1.32	 	“Manufacturing License” has the meaning attributed to that term in Section 4.1.1.1;
	 
	 	1.1.33	 	“Negotiation Period” has the meaning attributed to that term in Section 12.6;
	 
	 	1.1.34	 	“Net Sales” has the meaning attributed to that term in the License and Development
Agreement;
	 
	 	1.1.35	 	“New Equipment” has the meaning attributed to that term in Section 11.11;
	 
	 	1.1.36	 	“New Product” means any new product that the parties agree in writing to add to the scope of
this Agreement, with mutually agreed upon Specifications to be evidenced in writing by the
appending of an additional Schedule to this Agreement;
	 
	 	1.1.37	 	“Offered Purchase Price” has the meaning attributed to that term in Section
12.7;
	 
	 	1.1.38	 	“Offered Purchase Terms” has the meaning attributed to that term in Section 12.7;
	 
	 	1.1.39	 	“Party” means Westaim or S&N, as the case may be, and “Parties” means Westaim and S&N;
	 
	 	1.1.40	 	“Percentage Manufacturing Profit” means [***] of

 

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	 	 	 	Net Sales for all Products until the earlier of: (i) May 8, 2004, and (ii) the
first day of the calendar quarter immediately following four consecutive calendar
quarters during which Net Sales equaled at least [***], in the aggregate, whereupon “Percentage Manufacturing Profit” means
[***] of Net Sales for all Products;

	 	1.1.41	 	“Person” means an individual, corporation, company, cooperative, partnership, trust,
unincorporated association, entity with juridical personality or a governmental
authority or body, and pronouns which refer to a Person have a similarly extended meaning;
	 
	 	1.1.42	 	“Production Capacity” means the manufacturing capacity of the Equipment, reduced to take
into account all down times including scheduled and unscheduled maintenance;
	 
	 	1.1.43	 	“Products” means the Acticoat Product, the Acticoat 7 Product, the Acticoat Absorbent
Dressing Product, the Acticoat Moisture Control Dressing Product, and includes any inventory
of such Products existing as at the Effective Date, and any New Product and “Product” means
any one of the Products;
	 
	 	1.1.44	 	“Purchase Option” has the meaning attributed to that term in Section 12.7;
	 
	 	1.1.45	 	“Qualifying Offer” has the meaning attributed to that term in Section 12.7;
	 
	 	1.1.46	 	“Regulatory Authority” means, with respect to a particular Product, those government
agencies or authorities responsible for the approval of such Product in the United States,
Canada and the European Union (taken as a whole, not individual member countries);
	 
	 	1.1.47	 	“Rejection Date” has the meaning attributed to that term in Section 2.2.3;
	 
	 	1.1.48	 	“Rejection Notice” has the meaning attributed to that term in Section 2.2.3;
	 
	 	1.1.49	 	“S&N Indemnities” has the meaning attributed to that term in Section 9.1;
	 
	 	1.1.50	 	“S&N Offer” has the meaning attributed to that term in Section 12.6;
	 
	 	1.1.51	 	“S&N Production Capacity” has the meaning attributed to that term in Section 11.3;
	 
	 	1.1.52	 	“S&N Purchase Price” has the meaning attributed to that term in Section 12.6;
	 
	 	1.1.53	 	“S&N Purchase Terms” has the meaning attributed to that term in Section 12.6;
	 
	 	1.1.54	 	“Sales Milestone Payments” means payments made to Westaim under Section 6.5 of the License
and Development Agreement;
	 
	 	1.1.55	 	“Sales Report” has the meaning attributed to that term in Section 3.2;

 

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	 	1.1.56	 	“Specifications” means, with respect to a particular Product, the
specifications in relation to such Product set forth in the applicable Schedule
for that Product to this Agreement or, with respect to a New Product, as agreed
upon in writing by Westaim and S&N, as such specifications may be amended from
time to time by the written agreement of Westaim and S&N;
	 
	 	1.1.57	 	“Survival Period” has the meaning attributed to that term in Section 12.9;
	 
	 	1.1.58	 	“Term” means the term of this Agreement as specified in Section 10.1;
	 
	 	1.1.59	 	“Territory” means, subject to Sections 1.1.16.13 and 1.1.16.14 of the License and
Development Agreement, all countries of the world;
	 
	 	1.1.60	 	“Transfer Closing Date” has the meaning attributed to that term in Section 12.6;
	 
	 	1.1.61	 	“Transfer Notice” has the meaning attributed to that term in Section 12.6;
	 
	 	1.1.62	 	“Transfer Period” has the meaning attributed to that term in Section 12.6;
	 
	 	1.1.63	 	“Transition Services Agreement” means the transition services agreement of even date
herewith among Westaim and Smith & Nephew Inc. and Smith & Nephew, Inc., together with
all schedules thereto and any amendments to or restatements of such transition services
agreement;
	 
	 	1.1.64	 	“Westaim Manufacturing Technology” means, with respect to a particular Product in the
Field, the proprietary technology relating to the manufacture of such Product owned by
Westaim or licensed in by Westaim with the right to sublicense in the manner
contemplated by this Agreement and which is necessary in connection with the manufacture
of such Product;
	 
	 	1.1.65	 	“Westaim Know-How” has the meaning attributed to that term in the License and
Development Agreement;
	 
	 	1.1.66	 	“Westaim Indemnities” has the meaning attributed to that term in Section 9.2;
	 
	 	1.1.67	 	“Westaim Patent Rights” has the meaning attributed to that term in the License and
Development Agreement; and
	 
	 	1.1.68	 	“Westaim Production Capacity” has the meaning attributed to that term in Section
11.3.

Section 1.2 Number and Gender

Words importing the singular number only in this Agreement shall include the plural number and vice
versa and words importing one gender only in this Agreement shall include all genders and words
importing Persons in this Agreement shall include individuals, partnerships, corporations and any
other entities, legal or otherwise.

 

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Section 1.3 Sections and Headings

The division of this Agreement into Articles, Sections and Subsections and the insertion of
headings are for convenience of reference only and shall not affect the interpretation of this
Agreement. The terms “this Agreement”, “hereof, “hereunder” and similar expressions refer to this
Agreement and not to any particular Article, Section, Subsection, Schedule or other portion
hereof. Unless otherwise indicated, any reference in this Agreement to an Article, Section,
Subsection or Schedule refers to the specified Article, Section, Subsection or Schedule to this
Agreement.

Section 1.4 Schedules

The following schedules attached to this Agreement shall form part of this Agreement:

Schedule A — Acticoat Absorbent Dressing Product Specifications

Schedule B — Acticoat Moisture Control Dressing Product Specifications

Schedule C — Acticoat Product Specifications

Schedule D — Acticoat 7 Product Specifications

Schedule E — Equipment

Section 1.5 Effective Date

This Agreement shall commence as of the Effective Date.

Section 1.6 Calendar Quarter

Wherever calendar quarter is used in this Agreement in connection with a matter that pertains to
S&N’s financial reporting, S&N shall be entitled to interpret the provision to refer to the period
used in its quarterly reporting practice.

Section 1.7 Legislation

Any reference in this Agreement to legislation or a statute includes, unless otherwise indicated,
rules and regulations passed or in force as at the date of this Agreement and any amendments to
such rules or regulations from time to time, and any legislation or regulations substantially
replacing the same.

Section 1.8 Time of Essence

In this Agreement, time is of the essence.

 

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ARTICLE 2

MANUFACTURING AND SUPPLY OBLIGATIONS

Section 2.1 Supply of Product

Subject to the terms and conditions of this Agreement, S&N hereby appoints Westaim as S&N’s
exclusive supplier of Products in the Territory and Westaim agrees to supply Products in the
Territory exclusively to S&N, and Westaim undertakes and agrees to sell to S&N, and S&N agrees to
purchase from Westaim, such quantities of Products as are ordered by S&N from time to time. S&N
shall order all of its requirements for Products exclusively from Westaim. Westaim shall not sell
Products to any Person other than S&N or an Affiliate of S&N without the express written consent
of S&N.

Section 2.2 Forecasting; Purchase Orders; QA and QC

Unless otherwise agreed to in writing by Westaim and S&N, the supply by Westaim to S&N of a
particular Product shall be on the following terms and conditions:

	 	2.2.1	 	Westaim agrees to supply to S&N and S&N agrees to purchase exclusively
from Westaim such quantities of such Product as S&N shall request monthly by written
purchase order, all in accordance with the terms of this Agreement. S&N shall, on a
monthly basis during the Term (except during any period in which S&N is exercising its
rights under the Manufacturing License in accordance with Article 4), provide Westaim
with a twelve (12) month non-binding rolling forecast of S&N’s estimated requirements
for the Product. Such twelve (12) month non-binding rolling forecast shall be provided
to Westaim no later than five (5) Business Days preceding the beginning of each
calendar month and shall cover the twelve (12) month period commencing with the
calendar month next following such calendar month (e.g., on or before September 21,
2001, S&N is required to provide Westaim with an updated twelve (12) month rolling
non-binding forecast for the period November 1, 2001 to October 31, 2002). S&N shall
on a monthly basis request a supply of the Product from Westaim by way of written
purchase order. The purchase order for a particular month shall be delivered to
Westaim no later than five (5) Business Days preceding the beginning of the particular
month. The minimum amount of the Product ordered by S&N for any particular month shall
be [***] of the requirements last estimated for such month in the
applicable twelve (12) month non-binding rolling forecast. Each purchase order shall
be binding on S& N and Westaim, and Westaim shall fill each purchase order of S&N
within [***] days from receipt of such purchase order, provided, however,
that, with respect to a particular month, in the event S&N’s purchase order exceeds [***] of the requirements last estimated for such month in
the applicable twelve (12) month non-binding rolling forecast, Westaim shall not be
obligated to fill the amount of such purchase order in excess of [***] but shall only be required to use reasonable commercial efforts to fill
the amount of such purchase order in excess of the requirements last

 

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	 	 	 	estimated for such month in the applicable twelve (12) month non-binding
rolling forecast. Further, notwithstanding the above, but subject to Westaim complying
with Section 11.11, under no circumstances shall Westaim be obligated to supply a
quantity of Products over any period that exceeds the quantity of Products that can be
produced by the Equipment during such period using the S&N Production Capacity;
	 
	 	2.2.2	 	all Products purchased hereunder by S&N from Westaim shall conform to the applicable
Specifications at the time of delivery by Westaim to S&N; and
	 
	 	2.2.3	 	upon receipt of any Product, S&N may inspect and test such Products for conformance to the
applicable Specifications and may, up to and including the date which is thirty (30) days
after the date of receipt by S&N of such Products (the “Rejection Date”), reject the same by
sending to Westaim written notice (the “Rejection Notice”) of such rejection on or before the
Rejection Date (specifying the nature of such non-conformance) if such Product does not
conform to the Specifications. S&N shall be deemed to have accepted a particular delivery of
such Product if S&N has not sent to Westaim a Rejection Notice in connection with such
delivery on or before the Rejection Date related to such delivery; provided, however, that S&N
shall have the right to reject Product by delivery to Westaim of a Rejection Notice after the
Rejection Date, as soon as is practicable following S&N becoming aware of the non- conformance
of the Product, if such Product did not conform to the Specifications at the time it was
delivered to S&N and the non-conformance resulted from a latent defect not capable of being
detected by S&N during a reasonable inspection and testing of the Product at the time of
delivery to S&N. If Westaim disagrees with the alleged non-conformity of such Product with
the Specifications, and after the Parties have endeavoured to settle such disagreement between
themselves, then an independent laboratory, mutually agreed upon in writing by the Parties
(acting reasonably), shall analyze samples of the alleged non-conforming Product to determine
compliance with the Specifications. Westaim and S&N shall be bound by the laboratory
analysis of such alleged non-conformity of such Product with the
Specifications. The cost incurred in connection with retaining the independent laboratory
shall be borne by S&N if the Product in question is found to conform to the Specifications and
by Westaim if the Product in question is found to not conform to the Specifications. To the
extent it is determined that any Product supplied by Westaim to S&N under this Agreement does
not conform to the Specifications, Westaim’s sole obligation and S&N’s sole remedy shall be to
have Westaim replace such non-conforming Product at no additional cost to S&N.
	 
	 	2.2.4	 	S&N and Westaim agree to negotiate in good faith to conclude a “technical agreement”
required by the Regulatory Authorities in respect of a Product within ninety (90) days of the
Effective Date, and to negotiate in good faith to conclude a “technical agreement” required by
the Regulatory Authorities in respect of a New Product prior to the anticipated launch of such
New Product.

 

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Section 2.3 Delivery; Title; Risk of Loss

Westaim shall transfer Products to S&N [***] or such other facilities as Westaim and S&N, by mutual agreement in
writing, may from time to time designate.

Section 2.4 Representations

	 	2.4.1	 	Westaim represents and warrants to S&N that each Product will be produced in
compliance with all applicable laws, the non-compliance with which would have a
material adverse effect on Westaim’s ability to meet its obligations under this
Agreement in relation to such Product. Westaim shall at all times relevant throughout
the Term own, hold or possess all material licenses, franchises, permits, privileges,
immunities, registrations, approvals (including, without limitation, regulatory
approvals), authorizations and qualifications (“Government Permits”) necessary to allow
it to manufacture and produce the Products. All such Government Permits shall in all
material respects be valid, subsisting and in good standing at all relevant times
throughout the Term.
	 
	 	2.4.2	 	Westaim represents and warrants that it is the owner of the Westaim Patent
Rights and that such ownership is unencumbered by any lien or security interest granted
by Westaim and, to the Knowledge of Westaim, it is the owner of the Westaim Know-How
and that all material formal requirements in connection with the maintenance and
continuation of the patents and trade-marks (including the payment of fees and taxes
necessary for the continued use of and/or registration thereof) have been complied with
as at the Effective Date. Westaim has no Knowledge of any reason why any patent
included in the Westaim Patent Rights would be held to be invalid or otherwise
unenforceable, of any reason why any patent application included in the Westaim Patent
Rights would be refused or withdrawn, of any reason why any Person would claim that the
production, use or sale of Products would infringe its intellectual property rights or
that any trade secret of another Person has been appropriated by Westaim in the
production of the Products. Westaim has taken reasonable measures to avoid
misappropriation of trade secrets or infringement of copyright. For purposes
of this Section 2.4.2, it is acknowledged that “ownership” goes to title and not
to right to use or exploit, and that title does not necessarily give the right to use
or otherwise exploit.
	 
	 	2.4.3	 	Except as expressly provided in this Article 2, Westaim makes no representation or warranty, whether express or implied, with respect to the
Products including, without limitation, any representation as to fitness for a
particular purpose or merchantable quality.

Section 2.5 Inspection by S&N

No more frequently than once per calendar year, Westaim shall allow S&N, upon reasonable written
notice to Westaim and in any event within fifteen (15) days of such notice being given,

 

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during normal business hours and with a representative of Westaim present, if Westaim makes a
representative available, to visit Westaim’s manufacturing facility and to review the quality
control procedures and manufacturing records of Westaim, in order to assure satisfaction of the
requirements of this Agreement. Westaim shall respond to all reasonable comments or requests
provided by S&N to Westaim with respect to the foregoing.

Section 2.6 Import/Export Licenses

S&N shall be responsible for obtaining, at its expense, any import/export licenses required by any
governmental authority with respect to Products from and after its delivery to S&N pursuant to
this Agreement.

Section 2.7 Label Content

S&N shall be responsible for ensuring that the label and product insert for any Product sold in
any country in the Territory comply with all legal, governmental and regulatory requirements of
such country, and, to the extent required for Westaim to fully and effectively meet all of its
obligations under this Agreement. S&N shall be responsible for advising Westaim in writing and in
a timely manner of all such country specific requirements in connection with the packaging of
Products including without limitation label, package insert, language and other such requirements,
and Westaim shall be responsible for following all reasonable instructions and advice provided by
S&N to Westaim in this regard.

Section 2.8 Validation

All facilities, processes, equipment and analytical methods used for control of critical process
steps employed by Westaim in the manufacture and production of Products shall be validated in
accordance with the rules, regulations and guidance documents of the Regulatory Authorities and
shall otherwise be in material compliance with all applicable laws, rules and regulations.

Section 2.9 Regulatory Matters

Westaim agrees that it will allow all inspections of its facilities required by any Regulatory
Authority and will appropriately respond, forthwith upon receipt and in consultation with S&N, to
all requests of any Regulatory Authority and shall provide copies of all such responses to S&N
forthwith upon receipt.

Section 2.10 Production Records

The manufacture of Product shall be recorded in batch production record format that is in
compliance with the requirements of the Regulatory Authorities. With respect to a particular
manufacturing run, Westaim will, upon the written request of S&N, provide S&N reasonable access to
Westaim’s batch production records with respect to such manufacturing run during normal business
hours. Product and plant master files shall also be maintained by Westaim in accordance with the
requirements of the Regulatory Authorities and such files shall be available upon reasonable
written notice during normal business hours to the Regulatory Authorities or S&N.

 

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Section 2.11 Maintenance of Records

Westaim will keep or cause to be kept complete and current records relating to all of its
manufacturing supply activities under this Agreement in accordance with applicable law, rules and
regulations and also the requirements of the Regulatory Authorities.

Section 2.12 Subcontracting

Westaim shall not subcontract its obligations under this Agreement without the prior written
consent of S&N, which consent shall not be unreasonably withheld; provided, however, that Westaim
shall be entitled to subcontract all or some of its obligations under this Agreement to one or
more of its Affiliates without the consent of S&N provided Westaim remains responsible to S&N for
the performance of this Agreement by such Affiliate.

ARTICLE 3

CONSIDERATION

Section 3.1 Purchase Price

The purchase price payable by S&N to Westaim for a particular Product shall be equal to the Fully
Allocated Cost of Goods for such Product plus the Percentage Manufacturing Profit.

Section 3.2 Payment

The purchase price specified in Section 3.1 shall be paid by S&N to Westaim in the following
manner. Westaim shall issue an invoice to S&N at the time it delivers Products pursuant to a
purchase order received from S&N with respect to any particular month pursuant to Section 2.2.1.
Such invoice shall state an amount payable by S&N to Westaim as consideration for the Products and
shall include the Fully Allocated Cost of Goods, the Percentage Manufacturing Profit, and all
applicable taxes and other charges. Amounts payable by S&N under such invoices shall be paid within
[***] days of receipt of the invoice by S&N. In determining the Percentage Manufacturing
Profit, the average gross selling price for the particular Product during the previous calendar
quarter shall be used as an estimate of Net Sales. S&N shall advise Westaim in writing of the
average gross selling price for all Products (on a Product by Product basis) for each calendar
quarter and shall provide reasonable supporting documentation with respect thereto within [***]
Business Days of the end of such calendar quarter. Within [***] days of the close of each
calendar quarter, the actual Net Sales for each Product for such calendar quarter shall be
determined by S&N and provided to Westaim in a sales report (the “Sales Report”) specifying, at a
minimum, (a) [***] of each Product made during such calendar quarter, (b) [***] of each
Product made during such calendar quarter and (c) the [***] of each Product sold in
such calendar quarter. Each such Sales Report shall include reasonable supporting documentation. If
the Sales Report indicates that S&N has paid more or less than it should have paid, then such
overpayment or underpayment shall be paid by the appropriate party to the other party within [***] days following receipt of such Sales Report.

 

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Section 3.3 Audit Rights

	 	3.3.1	 	Westaim will keep and maintain proper and complete records and books of
account in such form and detail as is necessary for the determination of the Fully
Allocated Cost of Goods. Westaim shall once in each calendar year during normal
business hours and upon fifteen (15) days prior notice from S&N make those records
available for audit by a nationally recognized accounting firm designated by S&N
(except one to which Westaim shall have objection, acting reasonably) for the sole
purpose of, and Westaim will only be required to disclose information related to,
verifying the Fully Allocated Cost of Goods and the correctness of calculations and
classifications in respect thereof. Westaim shall preserve such records made in any
calendar year for a period of seven (7) years following the close of that calendar
year. In the event that such audit discloses that the actual amount of Fully Allocated
Cost of Goods are less than the amount paid by S&N to Westaim pursuant to this Article
3, then Westaim shall promptly reimburse to S&N such overpayment. In the event that
such audit discloses that the actual amount of Fully Allocated Cost of Goods payable
by S&N to Westaim are greater than the amount paid by S&N to Westaim pursuant to this
Article 3, then S&N shall promptly pay to Westaim such underpayment based on the
results disclosed by such audit. The cost of such audit shall be borne by S&N unless
such audit discloses that Fully Allocated Cost of Goods is less by [***] or
more than the amount paid by S&N to Westaim pursuant to this Article 3 or such audit
discloses that Fully Allocated Cost of Goods is more than the amount paid by S&N to
Westaim pursuant to this Article 3, in which case Westaim shall be responsible for
payment of all reasonable costs of such audit to a maximum of the amount of any
underpayment by S&N to Westaim due to an incorrect calculation of Fully Allocated Cost
of Goods and S&N shall be responsible for payment of all other costs of such audit.
Notwithstanding the foregoing, S&N shall not have the right to conduct more than once,
for the same purpose, an audit of the same information, books and records, whether
under this Agreement or the License and Development Agreement; provided, however, that
if any such audit discloses that the actual Fully Allocated Cost of Goods was
calculated incorrectly such that a reimbursement by Westaim is required pursuant to
this Section 3.3.1, then S&N shall have a further right to audit the same
information, books and records for the same purpose until such time as no further
errors are found.
	 
	 	3.3.2	 	S&N will keep and maintain proper and complete records and books of account
in such form and detail as is necessary for the determination of the Net Sales amounts
payable by S&N to Westaim under this Agreement. S&N shall once in each calendar year
during normal business hours upon fifteen (15) days prior notice from Westaim make
those records available for audit by a nationally recognized accounting firm
designated by Westaim (except one to which S&N shall have objection, acting
reasonably) for the sole purpose of, and S&N will only be required to disclose
information related to, verifying such Net Sales and deductions therefrom and the
correctness of calculations

 

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	 	 	 	and classifications in respect thereof. S&N shall preserve such records made in
any calendar year for a period of seven (7) years following the close of that
calendar year. In the event that such audit discloses that the actual Net Sales
amounts for Products are greater than the Net Sales amounts reported by S&N to
Westaim pursuant to this Article 3 for purposes of calculating the purchase price
payable by S&N to Westaim for Products, then S&N shall pay to Westaim any
additional purchase price for Products based on the results disclosed by such
audit. In the event that such audit discloses that the actual Net Sales amounts
for Products are less than the Net Sales amounts reported by S&N to Westaim
pursuant to this Article 3, then Westaim shall reimburse S&N for any such
overpayment of the purchase price for Products based on the results disclosed by
such audit. The cost of such audit shall be borne by Westaim unless such audit
discloses that the actual Net Sales amounts for Products are greater by [***] or more than the Net Sales amounts reported by S&N to Westaim
pursuant to this Article 3 or such audit discloses that the Net Sales for Products
are less than the Net Sales reported by S&N to Westaim pursuant to this Article 3,
in which cases S&N shall be responsible for payment of all reasonable costs of
such audit to a maximum of the amount of any overpayment by S&N to Westaim due to
an incorrect calculation of Net Sales and Westaim shall be responsible for payment
of all other costs of such audit. Notwithstanding the foregoing, Westaim shall
not have the right to conduct more than once, for the same purpose, an audit of
the same information, books and records, whether under this Agreement or the
License and Development Agreement; provided, however, that if any such audit
discloses that the actual Net Sales was calculated incorrectly such that a payment
by S&N is required pursuant to this Section 3.3.2, then Westaim shall have a
further right to audit the same information, books and records for the same
purpose until such time as no further errors are found.

Section 3.4 Late Payments

Any late payments of any nature made under this Agreement shall bear interest, running from the
date such payment was due until such payment is made in full, at a rate per annum equal to the
average three (3) month US dollar LIBOR rate (as published from time to time by Reuters) plus [***].

Section 3.5 Currency Conversion

The currency in which Net Sales were invoiced shall be converted to United States dollars on the
date of payment of the Percentage Manufacturing Profit using the applicable average rate of
exchange for U.S. dollars for the prior quarter quoted as bcal currency per US $1, published in
The Financial Times (London edition).

Section 3.6 Taxes and Other Withholdings

Each of Westaim and S&N shall be responsible for any and all taxes and other similar levies or
charges properly assessed against payments received by such Party from the other Party under

 

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this Agreement. If applicable laws or regulations require that taxes or other amounts be
withheld on such payments, the withholding Party will in a timely manner notify the other Party
in writing specifying the details thereof and shall:

	 	3.6.1	 	deduct those taxes or other amounts from the amount of such payment due to the
receiving Party,
	 
	 	3.6.2	 	pay the taxes or other amounts to the proper taxing authority in a timely
manner, and
	 
	 	3.6.3	 	send proof of payment to the receiving Party within sixty (60) days following
that payment.

The Parties agree to cooperate to lawfully reduce the amount of any such deductions by obtaining
the benefit of any tax treaty with respect to such deductions. Further, the withholding Party
shall cooperate with the receiving Party in obtaining for the receiving Party a credit or refund
for any such taxes, levies or charges.

Section 3.7 Set-Off

If pursuant to any of the terms of this Agreement, or any other agreement or instrument
contemplated in this Agreement, including, without limitation, the Transition
Services Agreement, the Asset Purchase Agreement or the License and Development Agreement, it is
determined pursuant to the dispute resolution procedure in Section 12.4 or otherwise by an
unappealable decision of a court of law, that a Party owes any amount to the other or to an
Affiliate of the other, then without limiting or waiving, in any respect, any rights or remedies of
the other Party, the other Party shall have the right to set-off the aggregate amount of such
amount owing against, and apply it in full or partial satisfaction of, any amounts payable by the
other Party or an Affiliate of the other Party, pursuant to the terms of this Agreement or any
other agreement or instrument contemplated in this Agreement, including, without limitation, the
Transition Services Agreement, the Asset Purchase Agreement or the License and Development
Agreement.

ARTICLE 4

MANUFACTURING LICENSE

Section 4.1 Manufacturing License

	 	4.1.1	 	License to Make and Have Made in the Territory

	 	4.1.1.1	 	With respect to Products, Westaim hereby grants to T.J. Smith & Nephew
Limited and its Affiliates a royalty-free license (or, where applicable,
sublicense) under the Westaim Manufacturing Technology to make and have made
Products for sale by S&N in the Field in the Territory pursuant to the License
and Development Agreement (the “Manufacturing License”); provided, however,
that S&N may not practice the Manufacturing License until such time, if ever,
as Westaim

 

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	 	 	 	has failed to cure a material supply difficulty or failed to satisfy S&N,
acting reasonably, that it can cure such supply difficulty at least as well as S&N,
all as described in Section 4.1.1.3.
	 
	 	4.1.1.2	 	Notwithstanding the foregoing, Westaim agrees to advise S&N in a timely manner of any
material supply difficulties (which shall include the inability or unwillingness of Westaim to
provide assistance to S&N pursuant to Section 11.11) with respect to a Product or Products
experienced by Westaim (including any caused by a Force Majeure Event) so that the Parties
have an opportunity to discuss such difficulties and possible resolutions thereof at an
early stage with a view to avoiding the application of the Manufacturing License in relation
to the Product or Products.
	 
	 	4.1.1.3	 	If Westaim advises S&N of a supply difficulty pursuant to Section 4.1.1.2 or encounters one
but does not notify S&N thereof and S&N desires to practice the Manufacturing License with
respect to Products (in whole or in part), S&N will notify Westaim in writing of such desire
not earlier than [***] following the commencement of the discussions referred to in
Section 4.1.1.2 or, if no discussions occur because Westaim failed to notify S&N of the supply
difficulty, [***] following the date S&N becomes aware of the supply difficulty. In
that event, Westaim shall have a period of [***] following receipt of the notice
from S&N to either cure the supply difficulty or demonstrate to the satisfaction of S&N,
acting reasonably, that it can cure the supply difficulty at least as well as S&N, having
regard for the time and cost to implement the cure. If, by the end of the [***]
period, and only in such circumstances, Westaim has neither cured the supply difficulty nor
demonstrated to the satisfaction of S&N, acting reasonably, that it can cure such difficulty
at least as well as S&N, then S&N shall become entitled to practice the Manufacturing
License with respect to such Product to the extent requested by S&N in its written notice to
Westaim. Except as expressly provided in Section 9.1 (insofar as it pertains to third
party claims against S&N), the right to practice the Manufacturing License in relation to such
Product will be S&N’s sole remedy for the actions of Westaim giving rise to that right. S&N
shall purchase from Westaim such quantity of such Product and material intermediates as are
then held by or on behalf of Westaim.
	 
	 	4.1.1.4	 	During any period in which S&N is practicing the Manufacturing License with respect to
Products, S&N shall:

	 	4.1.1.4.1	 	be responsible for all aspects of the manufacture and supply of such
Products assumed by S&N and, as a result, Westaim shall, notwithstanding any
provision to the contrary in this Agreement, be relieved from all obligations

 

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	 	 	 	under this Agreement with respect to the manufacture and supply of such
Products during such period, including without limitation any liability
in respect thereof to S&N or any third party, except in relation to
Products manufactured and supplied by Westaim prior to the commencement
of such period or after the conclusion of such period;
	 
	 	4.1.1.4.2	 	only modify the label of such Product to the extent required by the
applicable Regulatory Authority.

	 	4.1.1.5	 	At the time that S&N is entitled to practice the Manufacturing License under this Section
4.1, the lease provided for in Article 11 shall be deemed to have been terminated, and Westaim
shall comply with the provisions in Section 11.8 with respect to expiry of the Term and the
return of the Equipment.
	 
	 	4.1.1.6	 	If within one year after S&N begins to practice the Manufacturing License with respect to
such Products in the Field in the Territory (to the extent requested by S&N in its written
notice to Westaim), Westaim has demonstrated to the satisfaction of S&N, acting reasonably,
the ability to once again manufacture such Products for sale in the Territory in compliance
with the provisions of this Agreement at a Fully Allocated Cost of Goods no more than the
Fully Allocated Cost of Goods incurred by S&N during its period of manufacture, and has paid
to S&N an amount equal to all of the costs directly incurred by S&N in establishing and
terminating such manufacturing operations (including all capital expenditures or commitments
to third parties in relation thereto made by S&N to enable it to manufacture and supply such
Products), S&N shall, subject to then existing third party commitments, permit Westaim to
resume such manufacturing activities of such Products for sale in the Territory. S&N will
use commercially reasonable efforts in structuring any third party arrangements to
minimize the duration and scope of any such commitments so as to facilitate the resumption by
Westaim of manufacturing activities of such Products for sale in the Field in the Territory.
Upon such resumption by Westaim, the lease provided for in Article 11 shall resume and
S&N will no longer be entitled to practice the Manufacturing License with
respect to such Products in the Territory (except to the limited extent required to enable S&N
to comply with then existing third party commitments regarding manufacture of such Products)
until such tune as the conditions described in Section 4.1.1.2 above recur and the procedures
in Section 4.1.1.3 above have once again been complied with and S&N is thereby entitled to
again practice the Manufacturing License.

 

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	 	4.1.2	 	Technology Transfer

	 	4.1.2.1	 	In order to enable S&N to effectively exercise its rights under the
Manufacturing License when applicable, Westaim, S&N and certain other named
parties have concurrently with this Agreement entered into the Escrow Agreement.
Further, in the event that S&N becomes entitled to practice the Manufacturing
License with respect to Products, Westaim will provide S&N with all assistance
reasonably required to ensure a smooth and seamless transition of manufacturing
of Products, including the ability to consult with Westaim personnel involved in
manufacturing Products and, if Westaim has provided its prior written consent,
the ability to make offers of employment to such personnel.
	 
	 	4.1.2.2	 	Any information received by S&N pursuant to Section 4.1.2 shall be subject to
the confidentiality provisions of Article 8 and shall be deemed to be the
Confidential Information of both S&N and Westaim. S&N shall return any such
information to Westaim at such time as its ability to practice the Manufacturing
License with respect to Products terminates (except that S&N may retain one copy
for legal archival purposes).

	 	4.1.3	 	Protection in Bankruptcy. The rights granted to S&N by Westaim
pursuant to this Section 4.1 constitute “intellectual property” (including as such term
is defined under Section 101 (35A) of the United States Bankruptcy Code) for purposes
of applicable bankruptcy law (including Section 365(n) of the United States Bankruptcy
Code).
	 
	 	4.1.4	 	Force Majeure Events

Notwithstanding any provision to the contrary in this Article 4, if S&N, but for the occurrence of
a Force Majeure Event with respect to Westaim, would be entitled to provide to Westaim the written
notice specified in Section 4.1.1.3, Westaim shall be presumed to be the Party that is able to take
the steps to relieve the effect of the occurrence of the Force Majeure Event (and thus rely on the
provisions of Section 12.1), unless S&N can reasonably demonstrate at such time that S&N is
materially better positioned to take the steps to relieve the effect of the occurrence of the Force
Majeure Event (in which case S&N shall become entitled to practice the Manufacturing License, all
as provided for in this Article 4, notwithstanding the occurrence of the Force Majeure Event).

Section 4.2 S&N Cost of Manufacture

S&N shall be responsible for all costs of the manufacture of the Products by or on behalf of S&N
during the time that S&N is manufacturing Products under the Manufacturing Licence.

 

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ARTICLE 5

RECALLS AND COMPLAINTS

Section 5.1 Product Recalls

S&N shall be responsible for implementing all Product recalls:, (a) required by a request,
directive or order of any applicable Regulatory Authority; (b) required by the order of a court of
competent jurisdiction; and (c) required by S&N, acting reasonably and with input from Westaim (if
time permits). To the extent that the Product recalled was sold prior to the date of this
Agreement or to the extent that the adverse event or complaint resulting in the recall was
attributable to Westaim, S&N out-of-pocket expenses incurred in connection with such recall shall
be borne by Westaim. S&N shall handle any such recall in a timely manner and in compliance with
all applicable laws and regulations. S&N shall keep Westaim informed in a timely manner with
respect to any such recall. No communications regarding any such recall shall be initiated by
either S&N or Westaim with the news media, customers, the FDA or any other Regulatory Authority,
except if and to the extent required by applicable law or regulatory requirement, without the
prior written approval of the other of them, which approval shall not be unreasonably withheld or
delayed. If a Party does not respond in writing to the other Party within the time period
requested by the other Party, acting reasonably, and in a timely fashion but in any event within
ten (10) days after receipt of any request for approval, such failure to respond will be deemed to
be a response that the Party does not have any comment in respect of the recall. In the event of a
recall, the defect giving rise to such recall shall be remedied as promptly as possible by the
Party responsible for the defect.

Section 5.2 Complaints and Adverse Events

Each of S&N and Westaim shall notify the other Party no later than the following Business Day,
after becoming aware of any report of any serious adverse event or consumer complaint, and within
ten (10) Business Days after becoming aware of any non-serious adverse events or consumer
complaints, associated with the use of a Product, whether or not determined to be attributable to
Product. Such notification shall be by facsimile or e-mail (with flagged priority). Evaluation,
follow-up and reporting of all adverse events and customer complaints shall be the responsibility
of S&N. Westaim shall provide all assistance reasonably requested by S&N in the foregoing regard.
Each Party shall maintain a record of all reported adverse events.

ARTICLE 6

INSURANCE

Section 6.1 Insurance

	 	6.1.1	 	Subject to adjustment as hereinafter provided, Westaim shall, at its sole
cost and expense, procure and maintain policies of commercial general liability
insurance in amounts of not less than [***] per incident
and [***] annual aggregate and naming S&N as an additional
insured and of business interruption insurance in amounts of not less than two million
dollars ($2,000,000) per incident and ten million dollars ($10,000,000) annual
aggregate and naming S&N as an

 

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	 	 	 	additional insured. Such commercial general liability insurance shall,
among other things, provide (a) product liability coverage and (b) contractual
liability coverage for Westaim’s indemnification under Section 9.1. If Westaim
elects to self-insure all or part of the limits described above (including
deductibles or retentions which are in excess of [***]
annual aggregate), such self-insurance program must be reasonably acceptable to
S&N. The minimum amounts of insurance coverage required under these provisions
shall not be construed to create a limit of Westaim’s liability with respect to
its indemnification obligation under Section 9.1. S&N and Westaim agree to review
on the fifth, tenth, fifteenth, etc., anniversary of the Effective Date the
adequacy of the insurance requirements set forth in this Section 6.1.1 in the then
current circumstances and to revise such requirements where appropriate, acting
reasonably, to conform with the then current industry norms.
	 
	 	6.1.2	 	Subject to adjustment as hereinafter provided, S&N shall, at its sole
cost and expense, procure and maintain policies of commercial general liability
insurance in amounts of not less than [***] per incident and
[***] annual aggregate and naming Westaim as an additional
insured and of business interruption insurance in amounts of not less than two million
dollars ($2,000,000) per incident and ten million dollars ($10,000,000) annual
aggregate and naming Westaim as an additional insured. Such commercial general
liability insurance shall, among other things, provide (a) product liability coverage
and (b) contractual liability coverage for S&N’s indemnification under Section 9.2. If
S&N elects to self-insure all or part of the limits described above (including
deductibles or retentions which are in excess of [***]
annual aggregate), such self-insurance program must be reasonably acceptable to
Westaim. The minimum amounts of insurance coverage required under these provisions
shall not be construed to create a limit of S&N’s liability with respect to its
indemnification obligation under Section 9.2. S&N and Westaim agree to review on the
fifth, tenth, fifteenth, etc., anniversary of the Effective Date the adequacy of the
insurance requirements set forth in this Section 6.1.2 in the then current
circumstances and to revise such requirements where appropriate, acting reasonably, to
conform with the then current industry norms.

Section 6.2 Notice of Insurance

Each Party shall provide the other with written evidence of such insurance upon request. Each
Party shall provide the other with written notice at least forty-five (45) days prior to the
cancellation, non-renewal or material change in such insurance.

Section 6.3 Maintenance of Insurance

Each Party shall maintain such comprehensive general liability insurance beyond the expiration or
termination of this Agreement during (a) the period that any Product manufactured by

 

- 22 -

Westaim is being commercially distributed or sold (other than for the purpose of obtaining
regulatory approvals) by S&N or by a sublicensee, Affiliate or agent of S&N and (b) a period of
not less than fifteen (15) years after the period referred to in (a) above.

ARTICLE 7

IMPROVEMENTS

Section 7.1 Improvements

If S&N requests a change to the Specifications and Westaim, acting reasonably, determines that
such change is feasible with regard to the manufacture of a particular Product, such change shall
be incorporated within the applicable Specifications pursuant to a written amendment of such
Specifications. It is the responsibility of S&N to ensure that the applicable regulatory and
governmental authorities approve the proposed change (if required) to the Specifications or method
of manufacture.

ARTICLE 8
CONFIDENTIALITY

Section 8.1 Confidentiality

The Parties to this Agreement recognize that from time to time one Party may disclose to another
Party(ies) information which is of a confidential nature (“Confidential Information”) and it is
therefore agreed that:

	 	8.1.1	 	Except as otherwise expressly authorized in writing by the discloser or
specifically provided for in this Agreement, all Confidential Information of the
disclosing Party shall be held in strict confidence by the receiving Party and the
receiving Party shall employ or cause to be employed diligent efforts and reasonable
care in order to ensure that such Confidential Information is not made available to
any third Party, excepting only as required under this Agreement including in
connection with the exercise by S&N of its rights in relation to the Manufacturing
License, where applicable or to the directors, officers, employees, agents and
consultants of the receiving Party whose duties require disclosure of the same or as
expressly authorized in writing and then (in any such case) only if the Parties to
whom such Confidential Information is being disclosed have given to the disclosing
Party an enforceable undertaking (in a form of contract used by the disclosing Party
in its normal course of business and that that deals with equivalently sensitive
information) not to disclose such Confidential Information to any other Party.
	 
	 	8.1.2	 	Subject to Section 8.1.3, Confidential Information shall not
include information that is in the public domain at the time of disclosure, that the
recipient can demonstrate based on written records was lawfully already in its
possession, that is approved in writing for release by the discloser or that is
obtained by any Party to this Agreement from a third Party without obligation

 

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	 	 	 	of confidence (provided, however, that no third Party from which the information
is obtained has any obligation of confidence to any Parties to this Agreement)
or that becomes public knowledge otherwise than through the fault of the
recipient or any Person to whom it has disclosed the Confidential Information.
	 
	 	8.1.3	 	Disclosure of Confidential Information shall not be precluded if such
disclosure is in response to a valid order of a court or other governmental body or of
any political subdivision thereof or is otherwise required to be disclosed by law.
Notwithstanding the foregoing, in the event that a Party is required to make a
disclosure of the other Parry’s Confidential Information pursuant to this Section
8.1.3, it will, except where impractical, give reasonable advance notice to the other
Party of such disclosure and use its best efforts to secure confidential treatment of
such information.
	 
	 	8.1.4	 	Confidential Information that is specific shall not be deemed to be within the
public domain merely because it is embraced by general knowledge in the public domain.
Further, any Confidential Information dealing with any combination of features of a
specific matter shall not be deemed to be within the public domain, unless the
combination of features and the principle of operation are in the public domain.
	 
	 	8.1.5	 	Each Party to this Agreement shall, upon the termination of this Agreement,
return all corporeal Confidential Information to the owner of such Confidential
Information with a written undertaking that no copies (electronic or otherwise) have
been retained, except that the receiving Party may retain one (1) copy in its legal
files solely to allow it to monitor its obligations hereunder.
	 
	 	8.1.6	 	Each of the Parties to this Agreement acknowledges that the other Party to
this Agreement would suffer irreparable harm as a result of the breach of any of the
non-disclosure and confidentiality obligations set forth in this Section 8.1 and that
legal remedies are inadequate; therefore, each of the Parties to this Agreement agrees
that, in addition to any damages and other remedies that the other Party to this
Agreement may be entitled to as a result of such a breach, the other Party to this
Agreement shall be entitled to seek an order from a court of competent jurisdiction
restraining such Party from breaching or continuing to breach any of the provisions of
this Section 8.1.
	 
	 	8.1.7	 	The covenants of the Parties under this Section 8.1 shall continue in full
force and effect notwithstanding the termination of this Agreement by effluxion of time
or otherwise.

Section 8.2 No Disclosure

Except as required by law or any applicable regulatory authority or as otherwise provided herein,
the Parties agree that the existence of this Agreement and the contents of this Agreement shall not
be disclosed to any third Party without the prior written consent of the other Parties.

 

- 24 -

Notwithstanding the foregoing, in the event that a Party is required to make a disclosure of the
other Party’s Confidential Information pursuant to this Section 8.2, it will, except where
impractical, give reasonable advance notice to the other Party of such disclosure and use its
best efforts to secure confidential treatment of such information.

ARTICLE 9

INDEMNIFICATION

Section 9.1 Indemnification by Westaim

Westaim shall indemnify and hold S&N (its Affiliates and their respective officers, directors,
shareholders, employees, agents, and their successors and permitted assigns) (collectively the
“S&N Indemnitees”) free and harmless from any claims, demands, liabilities, losses, actions or
causes of actions, and any and all expenses associated therewith (including without limiting the
generality of the foregoing, reasonable defence costs and legal fees), arising out of or in
connection with, or that are the result of, or are otherwise related to: (i) any claim, suit,
proceeding or cause of action against any of the S&N Indemnitees alleging physical injury
(including death) or property damage as a result of the acts or omissions of Westaim or its
officers, directors, shareholders, employees or agents, except to the extent attributable to any
one or more of the S&N Indemnitees; (ii) any failure of Westaim to perform, in whole or in part,
any covenants or obligations under this Agreement except to the extent attributable to any one or
more of the S&N Indemnitees; (iii) Westaim’s non-compliance with any applicable national, federal,
provincial or state laws or regulations, except to the extent attributable to any one or more of
the S&N Indemnitees; (iv) for the period specified in Section 12.9, any breach by Westaim of any
of its representations or warranties under this Agreement.

Section 9.2 Indemnification by S&N

S&N shall indemnify and hold Westaim (its Affiliates and their respective officers, directors,
shareholders, employees, agents, and their successors and permitted assigns) (collectively the
“Westaim Indemnitees”) free and harmless from any claims, demands, liabilities, losses, actions or
causes of actions, and any and all expenses associated therewith (including without limiting the
generality of the foregoing, reasonable defence costs and legal fees), arising out of or in
connection with, or that are the result of, or are otherwise related to: (i) any claim, suit,
proceeding or cause of action against any of the Westaim Indemnitees alleging physical injury
(including death) or property damage as a result of the acts or omissions of S&N or its officers,
directors, shareholders, employees or agents, except to the extent attributable to any one or more
of the Westaim Indemnitees; (ii) any failure of S&N to perform, in whole or in part, any covenants
or obligations under this Agreement except to the extent attributable to any one or more of the
Westaim Indemnitees; (iii) S&N’s non-compliance with any applicable national, federal, provincial
or state laws or regulations, except to the extent attributable to any one or more of the Westaim
Indemnitees; (iv) for the period specified in Section 12.9, any breach by S&N of any of its
representations or warranties under this Agreement. The liability of the parties included in the
definition “S&N” shall be joint and several.

 

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Section 9.3 Infringement Indemnification

In the event of any action or threatened action against S&N in which it is asserted that the
production of the Product infringes a copyright, patent, or other industrial property right, S&N
shall promptly notify Westaim of such action or threatened action. If a court of competent
jurisdiction upholds the infringement action in a judgment that has become incapable of appeal,
or if an injunction has been granted, Westaim shall use reasonable commercial efforts to:

	 	9.3.1	 	procure the right for Westaim to continue using the allegedly infringing
Westaim Manufacturing Technology; or
	 
	 	9.3.2	 	replace or modify the Westaim Manufacturing Technology, as the case may be, so
that it becomes non-infringing but has substantially equivalent capabilities as the
infringing technology.

Without limiting or waiving, in any respect, any rights or remedies of S&N or any Affiliate of S&N
in any other Section of this Agreement, if as a result of an infringement claim in relation to the
Products other than New Products or solely to the Westaim Manufacturing Technology incorporated
into any New Product, then (a) S&N is required to pay any damages it shall be entitled to recover
such damages from Westaim, or (b) S&N is required to pay any royalty to the claimant for ongoing
rights to permit continued production of the Product, S&N shall be entitled to deduct such damages
or royalties from the amount payable to Westaim on account of Section 3.1, this being the sole
remedy for recovery of such damages or royalties unless Westaim has breached any representation
given to S&N in Section 2.4.2 in respect of the said infringement.

Section 9.4 Procedure

The indemnified party shall give prompt written notice to the indemnifying party(ies) of any suits,
claims or demands by third parties (“Chim”) which may give rise to any loss for which
indemnification may be required under this Article 9, provided however that failure to give such
notice shall not impair the obligation of the indemnifying party to provide indemnification
hereunder except if and to the extent that such failure materially impairs the ability of the
indemnifying party to defend the Claim. The indemnifying party shall be entitled to assume the
control, defence and settlement of any Claim or demand of any third party at its own cost and
expense; provided, however, that the other party shall have the right to be represented by its own
counsel at its own cost in such matters. In the event that the indemnifying party shall decline to
assume control of any such Claim, the party entitled to indemnification shall be entitled to assume
such defence of, and settle such Claim, all at the sole cost and expense of the indemnifying party.
Neither the indemnifying party nor the indemnified party shall settle or dispose of any such matter
in any manner which would adversely impact the rights and interests of the other party without the
prior written consent of the indemnified party, which shall not be unreasonably withheld. Each
party shall cooperate with the other party and its counsel in the course of the defence of any such
Claim, such cooperation to include using reasonable efforts to provide or make available documents,
information and witnesses.

 

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ARTICLE 10

TERM AND TERMINATION

Section 10.1 Term and Expiration

This Agreement shall be effective as of the Effective Date and, unless terminated earlier pursuant
to this Article 10, this Agreement shall expire on a Product-by-Product and a country-by-country
basis upon the expiration or termination of the License and Development Agreement with respect to
such Product in such country.

Section 10.2 Early Termination

This Agreement may be terminated by either Party as follows:

	 	10.2.1	 	by mutual written agreement of Westaim and S&N, effective as of the time specified
in such written agreement;
	 
	 	10.2.2	 	subject to Article 4, by one Party where the other Party fails to perform or observe
in any material respect any material covenant, condition or provision of, or fails to
rectify a material breach of, this Agreement, provided, however, that the Party
alleging such failure to perform or observe or breach must first give the other Party
written notice thereof, which notice must identify the failure to perform or observe
or breach in reasonable detail and that the Party giving such notice views such
alleged failure to perform or observe or breach as a basis for terminating this
Agreement under this Section 10.2.2 and the Party receiving such notice must have
failed to cure such alleged breach with in forty-five (45) days after receipt of such
notice;
	 
	 	10.2.3	 	by one Party where the other Party institutes proceedings to be adjudicated a
bankrupt or insolvent or to be wound-up, or consents to the institution of bankruptcy,
insolvency or winding-up proceedings against it, or files a petition, answer or
consent seeking dissolution or winding-up under any bankruptcy, insolvency or
analogous laws, or if any such proceedings are commenced in respect of the Party and
are not being contested in good faith (and with the intended result of such
contestation being to suspend any adverse effect of such proceeding on the rights of
the Party hereunder) within thirty (30) days after the other Party becomes aware
thereof or if the other Party consents to the filing of any such petition or to the
appointment of a receiver over its business and assets generally or makes a general
assignment for the benefit of creditors, or admits in writing its inability to pay its
debts generally as they become due;
	 
	 	10.2.4	 	by one Party where the other Party institutes proceedings under the
Companies’ Creditors Arrangement Act, the Bankruptcy and Insolvency Act or other
similar legislation or the other Party seeks or takes any proceeding relating to a
compromise or arrangement with creditors or claimants generally; or
	 
	 	10.2.5	 	by one Party where the other Party voluntarily suspends for more than thirty

 

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	 	 	 	(30) Business Days all or substantially all of its business operations, other
than suspensions of a temporary nature resulting from a strike or similar event
not within the control of the Party or from a lock-out.

Section 10.3 Survival of Obligations

Such provisions of this Agreement that, by their nature, would be expected to survive termination
of this Agreement, including without limitation Article 8 and Article 9, shall survive any such
termination.

Section 10.4 Continuing Liability

Termination of this Agreement for any reason shall not release any Party from any liability,
obligation or agreement which has already accrued nor affect the survival of any provision hereof
which is expressly stated to survive such termination. Termination of this Agreement for any
reason shall not constitute a waiver or release of, or otherwise be deemed to prejudice or
adversely affect, any rights, remedies or claims, whether for damages or otherwise, which a Party
may have hereunder or which may arise out of or in connection with such termination.

Section 10.5 Return of Confidential Information

Upon termination of this Agreement, each party shall return to the other all Confidential
Information of such other party that remains in its possession, except that each party shall be
entitled to retain one copy of any such information for archival purposes.

ARTICLE 11

LEASE OF EQUIPMENT

Section 11.1 Lease

S&N hereby leases the Equipment to Westaim and Westaim hereby leases the Equipment from S&N for
the duration of the Term, on the terms and subject to the conditions contained in this Agreement.

Section 11.2 S&N Ownership

The Equipment is and shall at all times be and remain the sole property of S&N and Westaim shall
have no right, title or interest therein or thereto except as set forth herein. At S&N’s request,
Westaim shall at its own expense affix and maintain on the Equipment in a manner satisfactory to
S&N, acting reasonably, labels, plates or other marks supplied by S&N to identify the Equipment as
the property of S&N. The Equipment shall at all times be and remain personal property and shall not
in any manner be permanently affixed or attached to any lands or building so that it becomes a
fixture under applicable real estate law.

 

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Section 11.3 Use of Equipment

Except as otherwise expressly set out herein, the Equipment shall be solely used by Westaim for
the purpose of manufacturing and producing Products pursuant to this Agreement. Westaim
acknowledges and agrees that [***] of the Production Capacity for the manufacture of Products shall
be primarily and on a first priority basis for S&N
(“S&N Production Capacity”). During the Term,
Westaim shall be entitled to use the remaining [***] of the Production Capacity (“Westaim Production
Capacity”) and any unused S&N Production Capacity for purposes other than the manufacture of
Products for S&N. In consideration for Westaim’s right to use the Westaim Production Capacity
during the Term, Westaim shall pay to S&N a charge of [***] per year for a period of 7 years
commencing on the 1st of June, 2001. Thereafter, Westaim shall be deemed to have fully
paid for its rights in relation to the Westaim Production Capacity. Westaim may terminate its
entitlement to use the Westaim Production Capacity at any time, with the result that the S&N
Production Capacity shall increase to 100% of Production Capacity. On such termination, Westaim’s
obligation to pay the balance of the unpaid charge for the Westaim Production Capacity shall
forthwith terminate and any prepaid portion of such charge shall be refunded by S&N to Westaim.
Westaim shall also be responsible for any additional variable costs (such as electricity)
associated with its use of the Westaim Production Capacity and for any direct or indirect costs
associated with its own use of the S&N Production Capacity.

Section 11.4 Use of Other Equipment

Westaim may use any other piece or pieces of equipment it determines appropriate to manufacture
the Products, acting reasonably. So long as the Production Capacity used in manufacturing the
Products does not exceed the S&N Production Capacity, any cost in using such other piece or pieces
of equipment, including, without limitation, depreciation, shall not cause an increase in the
amount that would otherwise constitute the Fully Allocated Cost of Goods had only the Equipment be
used. If or when the Production Capacity used in manufacturing the Product exceeds the S&N
Production Capacity, any cost in using such other piece or pieces of equipment, including, without
limitation, depreciation, shall be included in the calculation of the Fully Allocated Cost of
Goods.

Section 11.5 Quiet Possession

Except as otherwise expressly set out herein, Westaim shall have exclusive use and quiet possession
of the Equipment during the Term. S&N shall have the right, on prior reasonable notice, to enter
Westaim’s premises to inspect the Equipment during regular business hours. Westaim shall keep the
Equipment during the Term at its premises in Fort Saskatchewan, Alberta, and shall not, without
S&N’s prior written consent, not to be unreasonably withheld, move the Equipment from that
location. Westaim shall use and operate the Equipment in a careful and prudent manner and not for
any unlawful purpose and shall, at Westaim’s expense, comply with and conform to, all applicable
federal, provincial and other laws, ordinances and regulations.

Section 11.6 Westaim’s Obligations

Westaim shall:

 

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	 	11.6.1	 	keep the Equipment free of all Liens of any kind or nature arising
through Westaim;
	 
	 	11.6.2	 	not transfer, deliver up possession of, encumber or sublet the Equipment;
	 
	 	11.6.3	 	keep all Equipment in good repair, condition and working order and shall furnish all
parts, mechanisms, devices and servicing so required, subject to Section 11.8 below;
	 
	 	11.6.4	 	comply with all laws, regulations and orders relating to the Equipment; and
	 
	 	11.6.5	 	pay all taxes associated with Westaim’s use of the Equipment.

Section 11.7 Insurance, Damage

	 	11.7.1	 	For so long as the Equipment is in Westaim’s possession, Westaim assumes and shall
bear the entire risk of loss, damage to or destruction of the Equipment from any cause
whatsoever. Westaim shall obtain and maintain for the Term, at its own expense,
insurance against loss or damage to the Equipment including without limitation, loss by
fire (including extended coverage), theft, collision and such other risks of loss as
are customarily covered by insurance on such type of Equipment and by prudent operators
of businesses similar to that in which Westaim is engaged, in such amounts, in such
form and with such insurers as shall be satisfactory to S&N, acting reasonably provided
that the amount of such insurance shall not be less than the full replacement value of
the Equipment. The insurance coverage shall be in favour of both S&N and Westaim as
named insureds, shall name S&N as first loss payee, and shall contain a clause
requiring the insurer to give S&N at least fifteen (15) business days prior written
notice of any alteration in the terms of or cancellation of the policy. On request,
Westaim shall furnish to S&N a certificate of insurance or other evidence satisfactory
to S&N that such insurance coverage is in effect. Westaim shall give S&N prompt notice
of any damage to or loss of the Equipment or any part thereof.
	 
	 	11.7.2	 	If there is any damage to or loss of any part of the Equipment, Westaim will at its
expense make all proofs of loss and take all other steps necessary to recover insurance
benefits, unless advised in writing by S&N that S&N desires to do so. Westaim appoints
S&N as its agent and attorney to make any claims and receive any payments pursuant to
the insurance policies. Proceeds of insurance will be disbursed by S&N against
invoices for repair, partial repair or replacement of the Equipment. However, if any
part of the Equipment is lost, stolen, destroyed or damaged beyond repair for any
reason, the Parties shall determine in good faith discussions whether Westaim or S&N
ought to replace the Equipment, such determination to be made in a
manner substantially similar to that set out in Article 4 concerning curation of a
material supply difficulty.

 

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Section 11.8 Expiry of Term

On expiry of the Term or following earlier termination of this Agreement or the lease provided for
in this Article 11 (as provided in Section 4.1.1.5), Westaim shall at S&N’s sole cost and expense
immediately return the Equipment to S&N in good repair, condition and working order and in
substantially the same condition as at the Effective Date, reasonable wear and tear excepted, at
such place as S&N may specify and provide reasonable cooperation and assistance in connection
therewith. If Westaim fails to do so within fourteen (14) business days after expiry or termination
of this Agreement, S&N shall have the right, on reasonable notice to Westaim, to enter upon any
premises where the Equipment or any of it may be, with or without legal process, and remove the
Equipment.

Section 11.9 No Sublease or Assignment

Westaim shall not sublet, assign or part with possession of the Equipment or permit its use by any
other Person other than Westaim, except for sublets or assignments to an Affiliate of Westaim
where Westaim remains responsible to S&N for the performance of all obligations under this
Agreement. Nothing herein contained shall release Westaim from its obligations to perform any
duty, covenant or condition required to be performed under this Agreement.

Section 11.10 Representations, Warranties

	 	11.10.1	 	S&N does not make, and there are no representations or warranties, express
or implied, statutory or otherwise, with respect to the Equipment or
this Agreement or any schedule or amendment hereto or affecting the rights of
the Parties hereby and S&N shall not be deemed to make, now or hereafter at
any time, any representation or warranty, express or implied, as to the quality
of the material or workmanship of the Equipment, or the conformity of
the Equipment to the provisions and specifications of Westaim, or to the
condition, design, merchantable quality, durability, operation or fitness for
use or for any particular purpose of the Equipment or freedom thereof from any
Liens or rights of others or any other representation or warranty whatsoever,
express or implied with respect to the Equipment.
	 
	 	11.10.2	 	Westaim does not make, and there are no representations or warranties,
express or implied, statutory or otherwise, with respect to the Equipment or
this Agreement or any schedule or amendment hereto or affecting the rights of
the Parties hereby and Westaim shall not be deemed to make, now or hereafter
at any time, any representation or warranty, express or implied, as to the
quality of the material or workmanship of the Equipment, or the conformity of
the Equipment to the provisions and specifications of S&N, or to the
condition, design, merchantable quality, durability, operation or fitness for
use or for any particular purpose of the Equipment or freedom thereof from any
Liens or rights of others or any other representation or warranty whatsoever,
express or implied with respect to the Equipment.

 

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Section 11.11 New Equipment

At least once each calendar year, commencing in 2002, the Parties shall discuss in good faith
the issue of whether additional Production Capacity is required to carry out the terms of this
Agreement in view of the expected level of Net Sales for the following two year period. Such
discussion shall also consider the expected requirements of third parties with whom Westaim has
commitments to manufacture Products using the Equipment. If following such discussions:

	 	11.11.1	 	Westaim determines in its sole discretion that additional or new equipment
is required in order to carry out the terms of this Agreement (“New
Equipment”), Westaim shall manufacture, or have manufactured, the New Equipment,
at its sole cost. S&N shall have the option to purchase the New Equipment, or
any part thereof, at any time during the six (6) months following the date
Westaim advises S&N in writing that it has determined to acquire New Equipment,
or at any time during the six (6) months following its decision to practice
the Manufacturing License pursuant to Section 4.1, exercisable by written
notice to Westaim. The purchase price for the New Equipment shall be the net
book value of the New Equipment, as determined by the Parties, with
such adjustments to the purchase price as necessary such that, from
Westaim’s perspective, the purchase price shall have a neutral effect from a
tax perspective; and
	 
	 	11.11.2	 	Westaim determines that it will not acquire New Equipment, S&N shall have the
right to manufacture, or have manufactured, the New Equipment at its sole cost.
Westaim shall cooperate with S&N by providing reasonable assistance to permit S&N
to manufacture, or have manufactured, the New Equipment; provided that S&N shall
reimburse Westaim for all out-of-pocket costs it incurs in providing such
assistance.

ARTICLE 12

MISCELLANEOUS

Section 12.1 Force Majeure

Subject to Section 4.1.4:

	 	12.1.1	 	Means an event, the cause of which is beyond the reasonable control of the Party
affected thereby and which could not reasonably have been foreseen and provided
against, including, without limitation, acts of God, strikes, lock-outs or other
labour or industrial disturbances, accidents, fires, explosions, weather conditions
materially affecting or preventing work, inability to secure fuel, power, materials,
contractors or labour, mechanical breakdown, failure of equipment or machinery, delays
in transportation, wars, civil commotion, riot, sabotage, interruptions by government,
court orders, or orders or rulings by regulatory bodies; provided that an event caused
by or materially contributed to by a Party’s financial difficulty shall not be
included as a force majeure event.

 

- 32 -

	 	12.1.2	 	Notwithstanding any other provision of this Agreement, if by reason of
Force Majeure, either Party is wholly or partly unable to perform certain of its
obligations under this Agreement, it shall be relieved of those obligations to
the extent, and for the period, that it is affected by Force Majeure, provided
that the affected Party gives the other Party prompt notice of such inability and
nature, cause and expected duration of the Force Majeure. The Party affected by
Force Majeure shall use all reasonable efforts to remedy the situation and
remove, so far as possible and with reasonable dispatch, the cause of its
inability to perform, provided that there shall be no obligation on a Party so
affected to settle labour disputes or to test or to refrain from testing the
validity of any order, regulation or law in any court having jurisdiction. The
Party affected by Force Majeure shall give prompt notice of the cessation and the
cause thereof, and shall provide reports at least every seven (7) days as to its
progress in dealing with the Force Majeure. Should the Force Majeure event
continue for a period longer than thirty (30) business days, the Party shall no
longer be relieved of its obligations under this Agreement.

Section 12.2 Notice

Any notice or other communication required or permitted to be given hereunder shall be in writing
and shall be delivered in person, transmitted by facsimile or similar means of recorded electronic
communication or sent by registered mail, charges prepaid, addressed as follows:

if to S&N:

Smith & Nephew, Inc.

11775 Starkey Road

P.O. Box 1970

Largo, Florida, 33799-1970

Attention: President

Facsimile: (727) 398-4206

with a copy to:

Smith & Nephew, Inc.

1450 Brooks Road 

Memphis, Tennessee, 38116

Attention: General Counsel

Facsimile: (901)396-7824

if to Westaim:

Westaim Biomedical Corp.

10102—114 Street

Fort Saskatchewan, Alberta T8L 3W4

Attention: President

Facsimile: (780) 992-5300

 

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with a copy to:

Westaim Biomedical Corp.

1010, 144—4th Avenue S.W.

Calgary, Alberta T2P 3N4

Attention: President

Facsimile: (403) 237-8181

and a copy to:

Westaim Biomedical Corp.

One Hampton Road, Suite 302,

Exeter, New Hampshire 03833

Attention: President

Facsimile: (603)778-6393

Any such notice or other communication shall be deemed to have been given and received on the day
on which it was delivered or transmitted (or, if such day is not a Business Day, on the next
following Business Day) or, if mailed, on the fifth (5th) Business Day following the
date of mailing; provided, however, that if at the time of mailing or within five (5) Business
Days thereafter there is or occurs a labour dispute or other event that might reasonably be
expected to disrupt the delivery of documents by mail, any notice or other communication hereunder
shall be delivered or transmitted by means of recorded electronic communication as aforesaid.
Either Party may at any time change its address for service from time to time giving notice to the
other Party in accordance with this Section 12.2.

Section 12.3 Waivers

No waiver of any term, provision, or condition of this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be construed as a further or
continuing waiver of any such term, provision, or condition of this Agreement unless reduced to
writing signed by an authorized representative of each Party.

Section 12.4 Dispute Resolution

Should any dispute arise between the Parties concerning this Agreement, the Parties agree to
first attempt to resolve the dispute in good faith. If within sixty (60) days of one Party
providing written notice of such dispute to the other Party such dispute is not resolved as
aforesaid, then the dispute shall immediately thereafter be referred for resolution to the
President of T.J. Smith & Nephew Limited, and the President of Westaim before resorting to any
other forum for a remedy. If resolution of the dispute is not reached between the Presidents within
sixty (60) days of such dispute being referred to the Presidents, then the Parties shall refer the
dispute to binding arbitration by a single arbitrator under the Arbitration Act (Ontario) which
shall be held at a neutral site in Toronto, Ontario, Canada.

Section 12.5 Assignment

The Parties agree that this Agreement, (except for assignments by Westaim pursuant to Section

 

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12.6 or 12.7 which S&N shall be deemed to have consented to, assignments by S&N as a part
of the disposition by S&N of all or substantially all of its wound care business and the
assignment by a Party to one or more of its Affiliates, which may be done without consent provided
the Party remains responsible to the other Party for the performance of this Agreement by its
Affiliate) may not be assigned or otherwise transferred, nor may any right or obligations
hereunder be assigned or transferred directly or indirectly by either Party, whether voluntary, by
operation of law or otherwise, without the written consent of the other Party, such consent not to
be unreasonably withheld. In connection with Westaim determining whether to consent to an
assignment, the Parties agree that Westaim shall be deemed to be acting reasonably if it withholds
its consent in circumstances where the proposed assignee is not a corporation of equal or greater
financial resources, marketing strength and expertise (including in the burn and wound care area),
and stature in the burns and wounds industry as S&N. Any purported assignment in violation of this
Section 12.5 shall be void. Any permitted assignee (which
includes assignments by Westaim pursuant
to Section 12.6 or 12.7 and assignments by S&N as a part of the disposition by S&N of all or
substantially all of its wound care business, but excludes assignments to Affiliates without
consent) shall assume all obligations of the assignor under this Agreement other than the
obligations set out in Sections 12.6 and 12.7 and the assignor shall be released from all
obligations under this Agreement, in each case from the date of such assignment. For
clarification, nothing in this Agreement shall restrict in any manner whatsoever the ability to
transfer shares in the capital of Westaim and its Affiliates, issue shares in the capital of
Westaim or its Affiliates or to otherwise effect a change of control of Westaim or one or more of
its Affiliates.

Section 12.6 Right of First Offer

If Westaim desires to sell all or substantially all of its assets used to manufacture and supply
Product to S&N under this Agreement, including without limitation assignment of this Agreement,
(the “Manufacturing Assets”), Westaim shall give written notice (the “Transfer Notice”) to S&N of
that desire. The Transfer Notice shall describe the Manufacturing Assets in sufficient detail to
permit S&N to make an informed decision regarding whether to offer to purchase the Manufacturing
Assets and on what terms. During the [***] (the “Negotiation Period”) immediately
following the date the Transfer Notice is given, Westaim and S&N shall in good faith negotiate the
sale and purchase of the Manufacturing Assets by Westaim to S&N. If during the Negotiation Period
S&N determines that it is not interested in purchasing the Manufacturing Assets, it shall forthwith
advise Westaim of such determination in writing, and Westaim shall be free to sell the
Manufacturing Assets to any other Person on any terms at any time, and the provision of this
Section 12.6 shall have no further application. If during the Negotiation Period Westaim and S&N
reach an agreement concerning the sale and purchase of the Manufacturing Assets and such sale and
purchase transaction is completed, the provisions of this Section 12.6 shall have no further
application. If Westaim and S&N fail to reach an agreement during the Negotiation Period
concerning the sale and purchase of the Manufacturing Assets, S&N shall be entitled at any time
prior to the expiry of the Negotiation Period to make an offer (the “S&N Offer”) to purchase the
Manufacturing Assets, which offer shall be maintained in confidence by Westaim. If S&N does not
make the S&N Offer by the expiry of the Negotiation Period, Westaim shall be free to sell the
Manufacturing Assets to any other person on any terms at any time, and the provisions of this
Section 12.6 shall have no further application. The S&N Offer shall be in writing and shall
indicate the offered price (“S&N

 

- 35 -

Purchase Price”) for the purchase of the Manufacturing Assets and the proposed terms (“S&N Purchase
Terms”) for such purchase. The S&N Offer shall be capable of acceptance by Westaim for a period
(the “Transfer Period”) ending no earlier than 11:59 p.m. Calgary time on the [***] following
the expiry of the Negotiation Period. The S&N Offer shall specify a closing date (the “Transfer
Closing Date”) for the sale and purchase, which shall not be earlier than [***] or more
than [***] after the date the S&N Offer is accepted. The S&N Purchase Price shall
be paid in cash by S&N on the Transfer Closing Date. During the Transfer Period, Westaim shall have
the option of either selling the Manufacturing Assets to S&N pursuant to the S&N Offer or selling
the Manufacturing Assets to a third party on terms no less favourable than the terms of the S&N
Offer, having regard for both the S&N Purchase Price and the S&N Purchase Terms. During the [***]
(the “Free Transfer Period”) following the later of the expiry of the Transfer Period, or
the date it determined that the sale pursuant to an accepted S&N Offer will not close for any
reason other than the default of Westaim, Westaim shall be entitled to sell the Manufacturing
Assets to a third party on terms no less favourable than the terms of the S&N Offer, having regard
for both the S&N Purchase Price and the S&N Purchase Terms. Any transfer of the Manufacturing
Assets made after the last day of a Free Transfer Period, other than where S&N did not deliver the
S&N Offer, without strict compliance with the terms, provisions and conditions of this Section 12.6
and the other terms, provisions and conditions of this Agreement, shall be null, void and of no
force or effect. The provisions of this Section 12.6 shall not apply to the transfer of the
Manufacturing Assets to a transferee that is an Affiliate of Westaim; provided that the Affiliate
agrees to be bound by the terms of this Section 12.6. Any assignment of this Agreement to a third
party as a part of the transfer of the Manufacturing Assets pursuant to this Section 12.6, whether
as a result of S&N not making the S&N Offer by the expiry of the Negotiation Period or as a result
of Westaim selling the Manufacturing Assets to a third party during the Free Transfer Period on
terms no less favourable than the S&N Offer, shall be considered an assignment to a permitted
assignee for purposes of Section 12.5.

Section 12.7 Right of First Refusal

If Westaim receives from a competitor of S&N in the wound care market a bone fide offer
(“Qualifying Offer”) to purchase the Manufacturing Assets and Westaim desires to accept the
Qualifying Offer, Westaim shall give written notice (the “First Refusal Transfer Notice”) to S&N of
that desire. The First Refusal Transfer Notice shall describe the Manufacturing Assets and the
proposed price (“Offered Purchase Price”) for the sale of the Manufacturing Assets and the proposed
terms (“Offered Purchase Terms”) for such sale as set forth in the Qualifying Offer. Westaim shall
not be obligated to provide to S&N a copy of the Qualifying Offer or disclose the name of the
competitor of S&N that made the Qualifying Offer. S&N shall have the option (the “Purchase Option”)
to purchase all of the Manufacturing Assets for the Offered Purchase Price and on the Offered
Purchase Terms. The Purchase Option shall be and remain irrevocable for a period (the “First
Refusal Transfer Period”) ending on the earlier of (i) 11:59 p.m. Calgary time on the 10th day
following the date the First Refusal Transfer Notice is given by Westaim to S&N; and (ii) 11:59 pm
Calgary time on the Business Day prior to the day the Qualifying Offer expires pursuant to its
terms. S&N may elect to exercise the Purchase Option by giving written notice of its election to
Westaim, which exercise shall be maintained in confidence by Westaim. If S&N elects to exercise the
Purchase Option, S&N’s notice of election shall fix a closing date (the ‘First Refusal Transfer
Closing Date”) for the purchase of the Manufacturing Assets, which shall not be later than

 

- 36 -

the Business Day prior to the expiry of the Qualifying Offer. The Offered Purchase Price shall be
paid in cash by S&N on the First Refusal Transfer Closing Date. If S&N does not exercise the
Purchase Option or if the Purchase Option is exercised but the transition does not close by the
expiry of the First Refusal Transfer Period for any reason other than the default of Westaim,
Westaim shall be permitted to accept the Qualifying Offer or another offer on substantially similar
or better terms at any time during the period ending 365 days
(the “First Refusal Free Transfer
Period”) after the expiry of the First Refusal Transfer Period. If Westaim does not transfer the
Manufacturing Assets pursuant to the Qualifying Offer or another offer on substantially similar or
better terms within a First Refusal Free Transfer Period, Westaim’s right to transfer the
Manufacturing Assets pursuant to this Section 12.7 shall cease and terminate. Any transfer of the
Manufacturing Assets made after the last day of the First Refusal Free Transfer Period without
strict compliance with the terms, provisions and conditions of this Section 12.7 and the other
terms, provisions and conditions of this Agreement, shall be null, void and of no force or effect.
Any assignment of this Agreement to a third party as part of the transfer of the Manufacturing
Assets pursuant to this Section 12.7, whether as a result of S&N not exercising the Purchase Option
or as a result of S&N exercising the Purchase Option but the transaction not closing by the expiry
of the First Refusal Transfer Period for any reason other than the default of Westaim, shall be
considered an assignment to a permitted assignee for purposes of Section 12.5.

Section 12.8 Limitation

The maximum aggregate liability of Westaim under this Agreement, the Asset Purchase Agreement, the
License and Distribution Agreement and all other agreements and documents referred to therein
shall at no time exceed [***]. Neither Party shall have any
liability to the other Party or any other Person pursuant to this Agreement for any special,
indirect or consequential damages, including but not limited to loss of profits, loss of business
opportunities or loss of business investment.

Section 12.9 Survival

The representations and warranties of the Parties contained in this Agreement, in the Schedules
annexed to this Agreement or in any certificate or other document delivered or given pursuant to
this Agreement shall survive the expiration of the Term and will remain in full force and effect
for a period of [***] months following such expiration except for any representation and
warranty in respect of which a claim based on fraud or intentional misrepresentation is made, which
in each case shall be unlimited as to duration (“Survival Period”). Any Claim for indemnification
made during the Survival Period will result in the representations and warranties relating thereto
remaining in effect for purposes of indemnification notwithstanding such claim may not be resolved
within the Survival Period. The covenants set forth herein will survive without limitation. All
representations, warranties and covenants and agreements made by the Parties will not be affected
by any investigation made by and on behalf of a Party and will not be deemed merged into any
instruments or agreements delivered in connection with this Agreement or otherwise in connection
with the transactions contemplated hereby. Except as expressly provided in this Agreement, neither
Party makes any representation or warranty of any kind to the other Party, express or implied.

 

- 37 -

Section 12.10 Integration Clause

This Agreement is the sole agreement with respect to the subject matter hereof, and supersedes all
proposals, negotiations, conversations, discussions, agreements and/or representations, whether
oral or written, including any industry custom or past dealing between the Parties relating to the
subject matter of this Agreement. The Parties agree that any and all obligations between the
Parties that are outside the terms of this Agreement and that relate to the subject matter of this
Agreement that preceded the Effective Date of this Agreement have been satisfactorily executed or
are null and void.

Section 12.11 Independent Contractors

	 	12.11.1	 	This Agreement shall not constitute or give rise to an agency, partnership
or joint venture between the Parties and each Party’s performance hereunder
is that of a separate, independent entity.
	 
	 	12.11.2	 	Nothing in this Agreement shall be deemed to be the grant by either Party
to the other of any right, title or interest in any product, material or
proprietary rights of the other except as may be expressly provided for in this
Agreement.

Section 12.12 Severability and Survival

To the extent that any provision of this Agreement shall be prohibited by or held to be invalid or
unenforceable under applicable law, such provision shall be ineffective to the extent of such
prohibition, invalidity, or unenforceability, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.

Section 12.13 U.S. Dollars

Unless otherwise provided, any reference in this Agreement to dollars shall be to U.S. dollars.

Section 12.14 Amendment of Agreement

No change, modification, extension, termination, waiver or other amendment of this Agreement or
any of the provisions contained herein, shall be valid unless made in writing and signed by a duly
authorized representative of each Party.

Section 12.15 Expenses

Each Party agrees to pay, without right of reimbursement from the other Party, the costs incurred
by such Party incident to the preparation and execution of this Agreement and performance of its
obligations hereunder, including without limitation the fees and disbursements of legal counsel,
accountants and consultants employed by such Party in connection with the transactions contemplated
by this Agreement.

 

 

Section 12.16 Governing Law and Attornment

This Agreement is subject to and shall be governed by the laws of the Province of Alberta (without
giving effect to the conflict of law provisions thereof) and the Parties agree to irrevocably
attorn to the jurisdiction of the courts of Alberta.

Section 12.17 Counterparts

This Agreement may be executed in several counterparts, each of which when so executed shall be
deemed to be an original and shall have the same force and effect as an original but such
counterparts together shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the Parties hereto have each caused this Agreement to be executed by their duly
authorized representatives as of the date first above written.

	 	 	 	 	 	 	 	 	 
	Westaim Biomedical Corp.	 	Smith & Nephew Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	Per:
	 	/s/ Scott H. Gillis	 	Per:	 	/s/ David A. Trollope	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Per:

	 	/s/ [ILLEGIBLE]
	 	Per:
	 	/s/ Stephen Lang	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Smith & Nephew, Inc.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Per:
	 	/s/ David A. Trollope	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Per:
	 	/s/ Stephen Lang	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	T.J. Smith & Nephew Limited	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Per:
	 	/s/ David A. Trollope	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Per:
	 	/s/ Stephen Lang	 	 
	 

	 	 	 	 	 	 	 	 

 

 

SCHEDULE
A

to
a Supply Agreement made effective as of May 8, 2001 among
Westaim Biomedical Corp., Smith & Nephew Inc., Smith &
Nephew, Inc. and T.J. Smith & Nephew Limited

ACTICOAT
ABSORBENT DRESSING PRODUCT SPECIFICATIONS

	 	 	 	 	 	 
		 	PRODUCT SPECIFICATION
	 
	 	DESIGN PROJECT:	 	Acticoat Absorbent Dressing	 
	 	DHF #:	 	 2005	 
	 	VERSION:	 	 1.2	 

	1.0	 	DESIGN DESCRIPTION
	 
	1.1	 	SUMMARY
	 
	 	 	This Product Specification is for a calcium alginate wound dressing incorporating Acticoat technology for antimicrobial
performance. The product is intended for dressing moderately to highly exudative wounds such as decubitus ulcers, diabetic
ulcers and venous stasis ulcers. The product in the form of a ribbon would also be suitable for packing deep cavity wounds.
Two product sizes will be produced: 4” x 5” and a 0.75” x 12” ribbon.
	 
	1.2	 	THEORY OF OPERATION OF THE PROPOSED DESIGN

	 	•	 	Calcium alginate dressings are highly absorbent by virtue of their strong hydrophilic gel formation.
	 
	 	•	 	Calcium alginate dressings release calcium by ion exchange with sodium when contacted with wound fluids. The sodium
alginate creates a viscous liquid or gel, which creates a physiologically moist microenvironment that promotes healing
and the formation of granulation tissue.
	 
	 	•	 	There have been few studies of the effect of alginate wound dressings on the process of wound healing. In one study the
results suggested that the calcium alginate tested may improve some cellular aspects of normal wound healing, but not
others.
	 
	 	•	 	The dressing will provide antimicrobial activity through a controlled release of silver from an Acticoat coating on the
alginate fibres.
	 
	 	•	 	For epithelizing wounds, the dressing can be removed without causing pain or trauma if they are first well soaked with
sodium chloride solution. Residual alginate fibres trapped in a wound are readily biodegraded.
	 
	 	•	 	A secondary dressing will be required to provide attachment of this product and may provide additional absorbency for wound
exudate.

	1.3	 	DRAWINGS/SCHEMATICS (REFERENCE APPLICABLE ATTACHMENTS)
	 
	 	 	Figure 1: Pouch Label for Product size 4” x 5”
	 
	 	 	Figure 2: Pouch Label for Product Size 3⁄4” x 12”

 

 

	 	 	 	 	 	 
		 	PRODUCT SPECIFICATION
	 
	 	DESIGN PROJECT:	 	Acticoat Absorbent Dressing	 
	 	DHF #:	 	 2005	 
	 	VERSION:	 	 1.2	 

	 	 	Figure 3: Box Label for Product size 4” x 5”
	 
	 	 	Figure 4: Box Label for Product size 3⁄4” x 12”
	 
	 	 	Figure 5: Product Insert

Page 2 of 18

 

	 	 	 	 	 	 
		 	PRODUCT SPECIFICATION
	 
	 	DESIGN PROJECT:	 	Acticoat Absorbent Dressing	 
	 	DHF #:	 	 2005	 
	 	VERSION:	 	 1.2	 

	2.0	 	COMPARISON WITH COMPETITIVE DEVICES (GOLD STANDARDS, REFERENCE STANDARDS, ETC.)

	 	•	 	Acticoat AB for antimicrobial efficacy
	 
	 	•	 	AlgiSite M by Smith & Nephew for alginate characteristics, including absorbency and gel formation.

	3.0	 	PHYSICAL ATTRIBUTES
	 
	3.1	 	MATERIALS OF CONSTRUCTION
	 
	 	 	The only new material of construction required is non-woven calcium alginate.

	 	3.1.1	 	Vendor/Supplier, Vendor P/N

	 	•	 	Manufacturer: Acordis Specialty Fibers
	 
	 	•	 	Substance: Non-Sterile Needled Calcium Alginate Fabric
	 
	 	•	 	Description: Needled Alginate Fabric
	 
	 	•	 	Width: 91-95 cm.
	 
	 	•	 	Basis weight: 150 gsm ± 30 gsm

	 	3.1.2	 	Rare or Single-Source Materials
	 
	 	 	 	The non-woven calcium alginate used for the development of this product has been procured from only one supplier.
Further testing will be required to validate alternative materials from other suppliers.
	 
	 	3.1.3	 	Special Vendor Contract Requirement
	 
	 	 	 	A supply contract with Acordis Specialty Fibers has been established. The current revision is referenced in the material
specification for calcium alginate (PS-0050).

	3.2	 	CONSTRUCTION
	 
	 	 	Single-ply dressing consisting of non-woven calcium alginate with Acticoat coating applied to both sides.
	 
	3.3	 	SIZES
	 
	 	 	The size, as per WB-10-02-07, is acceptable if the sample falls within the dimensions below:

	 	 	 
	Dressing Size (on label)	 	Measured Dimensions, cm
	4” x 5”(10 cm x 12.5 cm)
	 	10.2 cm (+1.2 cm, - 0.5
cm) x 12.7 cm (+1.2 cm, - 0.5 cm)

Page 3 of 18

 

	 	 	 	 	 	 
		 	PRODUCT SPECIFICATION
	 
	 	DESIGN PROJECT:	 	Acticoat Absorbent Dressing	 
	 	DHF #:	 	 2005	 
	 	VERSION:	 	 1.2	 

	 	 	 
	 	 	 
	3⁄4” x 12” (2.0 cm x 30 cm)
	 	1.9 cm (± 0.5 cm) x 30.5 cm
(+1.2 cm, - 0.5 cm)

	3.4	 	APPEARANCE
	 
	 	 	The appearance, as per WB-10-02-08, of the sample is acceptable if the following criteria are met:

	 	•	 	both sides demonstrate a uniform colour;
	 
	 	•	 	both sides show no stripes, colour fading, patches or other discoloration;
	 
	 	•	 	clean-cut edges; and
	 
	 	•	 	no melted or burnt patches, wrinkles, rips or tears.

	 	 	Due to the subjective nature of assessing appearance conformity, the following applies:

	 	•	 	verify conformance to the stated specification;
	 
	 	•	 	compare the sample to work standards when possible;
	 
	 	•	 	if the observations are questionable the Quality Systems Manager will assess conformance to the specification;
	 
	 	•	 	if the product does not meet predefined requirements, reject the sample; and
	 
	 	•	 	if it is unclear whether the product meets the requirements,
reject the sample and convene an MRB as per WB-13-01.

	3.5	 	COLOUR

	 	•	 	Due to the difficulty of measuring the product colour by the Minolta instrument, the criteria for acceptability of colour
will be determined by a comparison with colour standards.

	4.0	 	PERFORMANCE ATTRIBUTES
	 
	4.1	 	PARAMETERS OF OPERATION

	 	4.1.1	 	Efficacy

	 	•	 	Will have bactericidal properties similar to Acticoat AB, by
demonstrating at least a 4.0 log reduction of Pseudomonas
aeruginosa in 120 minutes according to procedure WB-10-03-25;
	 
	 	•	 	Will have bactericidal properties similar to Acticoat AB, by
demonstrating at least a 3 log reduction of S. aureus in 120
minutes according to procedure WB-10-03-25;
	 
	 	•	 	Will maintain antimicrobial activity for a period of three days in use, by demonstrating 3 days plate to plate CZOI efficacy
using procedure WB-10-03-04.

Page 4 of 18

 

	 	 	 	 	 	 
		 	PRODUCT SPECIFICATION
	 
	 	DESIGN PROJECT:	 	Acticoat Absorbent Dressing	 
	 	DHF #:	 	 2005	 
	 	VERSION:	 	 1.2	 

	 	4.1.2	 	Absorbency
	 
	 	 	 	The absorbency will be at least 12 g PBS/g dressing using procedure WB-10-03-11
	 
	 	4.1.3	 	Gel Formation
	 
	 	 	 	The product must have gel formation properties comparable to other commercially available alginate products, by
demonstrating a minimum viscosity of 2.5 cP at a shear rate of 1600 1/s, as demonstrated by procedure
WB-10-03-26.
	 
	 	4.1.4	 	Stability
	 
	 	 	 	The product will have a shelf life of at least one year from the date of manufacture as established by
accelerated aging studies according to the method outlined in Westaim Biomedical Report #000331.

	5.0	 	SAFETY ATTRIBUTES
	 
	5.1	 	BIOCOMPATABILITY

	 	•	 	Biocompatible as determined by cytotoxicity, sensitization and irritation tests

	5.2	 	KNOWN LIMITATIONS (CAUTIONS)

	 	•	 	for external use only;
	 
	 	•	 	do not use on patients with a known sensitivity to silver;
	 
	 	•	 	Should not be used on dry or non-exuding wounds;
	 
	 	•	 	May cause transient discoloration;
	 
	 	•	 	not compatible with oil-based products such as petrolatum;
	 
	 	•	 	not compatible with MRI (Magnetic Resonance Imaging) procedures;
	 
	 	•	 	not compatible with ECG procedures;
	 
	 	•	 	avoid exposure to temperatures above 120°F (50°C);
	 
	 	•	 	single use only;
	 
	 	•	 	do not re-sterilize;
	 
	 	•	 	do not use if package is damaged

	5.3	 	HUMAN FACTORS CONSIDERATIONS

	 	•	 	Instructions for use will be provided on a package insert Training will be available.
	 
	 	•	 	Intended for use by professional health care providers.

Page 5 of 18

 

	 	 	 	 	 	 
		 	PRODUCT SPECIFICATION
	 
	 	DESIGN PROJECT:	 	Acticoat Absorbent Dressing	 
	 	DHF #:	 	 2005	 
	 	VERSION:	 	 1.2	 

	 	•	 	Not intended for OTC sales.
	 
	 	•	 	The dressing should be non-directional or the directionality should be clearly indicated to prevent the dressing from being
applied with the wrong side to the wound.

	5.4	 	RECOMMENDED INSTRUCTIONS FOR USE

	 	•	 	Cleanse the wound using conventional, non oil-based techniques and leave the wound moist.
	 
	 	•	 	Remove ActicoatTM Absorbent Dressing from the package.
	 
	 	•	 	Apply the dressing to the wound and secure with an
appropriate secondary dressing that will maintain a moist environment.
	 
	 	•	 	Ensure the dressing remains moist, but not so wet that tissue maceration occurs.
	 
	 	•	 	Change the dressing depending on the amount of exudate and the condition of the wound.
	 
	 	•	 	If the dressing dries and adheres to the wound, moisten or soak the dressing prior to removal.
	 
	 	•	 	Avoid forceful removal and disruption of the healing wound.

	5.4.1	 	Equipment/Materials Required for Use of the Device

	 	•	 	Scissors
	 
	 	•	 	Appropriate secondary dressing
	 
	 	•	 	Adhesive tape or other attachment products

	6.0	 	STERILIZATION
	 
	6.1	 	Sterilization Method: E-beam irradiation
	 
	6.2	 	Sterilization Verification: Validation testing to achieve a
SAL of 10-6.
	 
	6.3	 	Sterilization Special Concerns: Irradiation should not exceed 50 kGy for a single dose or 75 kGy for a total dose.
	 
	7.0	 	PACKAGING
	 
	7.1	 	PACKAGING CONFIGURATIONS
	 
	 	 	The product will be produced in two sizes: 4” x 5”
and 3⁄4” x 12” that will be packaged in peelable pouches
6” x 8 1⁄2” and
3” x 8” respectively. The 3⁄4” x 12” dressing
will be folded two times along it’s length, 3⁄4” x 4”, prior to packaging. The
pouches will be packaged 5 per box. Boxes will packed in plain cardboard cases for shipping.

Page 6 of 18

 

	 	 	 	 	 	 	 
	

	 	 	 	PRODUCT SPECIFICATION

	 
	 	 	 	 	 	 
	 

	 	DESIGN PROJECT :
	 	Acticoat Absorbent Dressing

	 

	 	DHF #:
	 	 	 	2005
	 

	 	VERSION :
	 	 	 	1.2

7.1.1 Primary Packaging (Pouch)

	 	 	 	 	 
	 

	 	Part number:
	 	4” x 5”
         Front: A3082            Back: A3000
	 

	 	 	 	 3⁄4” x 12”       Front: A3080            Back: A3007
	 
	 	 	 	 
	 

	 	Composition:
	 	Front:            Tyvek 1073B (Spunbonded polyolefin) coated with SBP 2000 and printed.
	 
	 	 	 	 
	 

	 	 	 	Back:            Tyvek 1073B (Spunbonded polyolefin) uncoated and unprinted.
	 
	 	 	 	 
	 

	 	Basis Weight:
	 	2.57 ± 0.21 oz./sq. yd. (8.71 ± 0.71 mg/cm2)
	 
	 	 	 	 
	 

	 	Roll Widths:
	 	3” ± 0.25”, 6” ± 0.25”
	 
	 	 	 	 
	 

	 	Appearance:
	 	Clean, white, and no wrinkles or tears.
	 
	 	 	 	 
	 

	 	Printing:
	 	The images shown in Figures 1 & 2, are printed on the coated side of the Tyvek. The printed side
should be on the outside of the roll with the top of the label facing the leader end of the roll.
	 
	 	 	 	 
	 

	 	Colours:
	 	The Pantone colours used for printing are as follows:
	 
	 	 	 	 
	 

	 	 	 	Blue            286
	 

	 	 	 	Grey            Cool Grey 6
	 

	 	 	 	Black
	 
	 	 	 	 
	 

	 	Certification:
	 	Technical specifications must be certified for each lot of Tyvek packaging. Supplier quality
documentation that includes composition, product type, part identification (lot number), and quantity
shipped must accompany each shipment.
	 
	 	 	 	 
	 

	 	Contents:
	 	Peelable pouch with chevron seal, each containing one dressing.
	 
	 	 	 	 
	 

	 	Dimensions:
	 	For 4” x 5” product:
           153 mm x
216 mm (6” x 8 1⁄2”)
	 

	 	 	 	For 3⁄4” x
12” product          76.2 mm x 204 mm (3” x 8”)
	 
	 

	 	 	 	Size tolerance ± 6.35 mm (± 0.25”)
	 
	 	 	 	 
	 

	 	Label:
	 	The label appearance is acceptable as per WB- 10-02-03 if the following
criteria are met:
	 
	 

	 	 	 	a) the label is centered on the package;
	 

	 	 	 	b) the lot and expiry date stamps are straight and in the bottom left comer;
	 

	 	 	 	c) the printing is readable; and
	 

	 	 	 	d) the label matches the dressing in the package.
	 
	 	 	 	 
	 

	 	Seal:
	 	The seal size and position, as per WB- 10-02-04, is acceptable if the following criteria are met:

Page 7 of 18

 

 

	 	 	 	 	 	 	 
	

	 	 	 	PRODUCT SPECIFICATION

	 
	 	 	 	 	 	 
	 

	 	DESIGN PROJECT :
	 	Acticoat Absorbent Dressing

	 

	 	DHF #:
	 	 	 	2005
	 

	 	VERSION :
	 	 	 	1.2

	 	 	 	 	 
	 

	 	 	 	a) the seal is at least 7 mm wide,
within 7 mm from the side edge and within 10 mm from the bottom edge;
and
	 

	 	 	 	b) the Chevron seal is at the top of the label.
	 
	 	 	 	 
	 

	 	Seal Integrity:
	 	A continuous seal with no bubbles,
blisters or other inconsistencies as per WB-10-02-06 and
WB-10-02-02.
	 
	 	 	 	 
	 

	 	 	 	

If channels are observed during the dye penetration test, a minimum seal width of 7 mm must be maintained to accept the results.
	 
	 	 	 	 
	 

	 	Seal Strength:
	 	All package pouches will have a
burst test pressure of at least 1.0 psig as per WB-10-02-05.

	7.1.2	 	Outer Packaging (Box)

	 	 	 	 	 
	 

	 	Part number:
	 	4”x5”:A4082
	 

	 	 	 	3⁄4”xl2”:A4080
	 
	 	 	 	 
	 

	 	Composition:
	 	Cardboard, 0.02 clay coated solid bleached sulphite with 1 mil poly coated backside;
	 
	 

	 	Printing:
	 	Printed with images shown in Figure 3 & 4;
	 
	 	 	 	 
	 

	 	Colours:
	 	The Pantone colours used for printing are as follows:
	 
	 	 	 	 
	 

	 	 	 	Blue            286
	 

	 	 	 	Grey            Cool Grey 6
	 

	 	 	 	Black
	 
	 	 	 	 
	 

	 	Appearance:
	 	White, no wrinkles, straight folds, side glued with tuck ends.
	 
	 	 	 	 
	 

	 	Box style:
	 	Notched reverse tuck end (French) carton.
	 
	 	 	 	 
	 

	 	Contents:
	 	box only: 5 dressings/box;
	 
	 	 	 	 
	 

	 	 	 	optional bag & box configuration: 5 dressings/bag, 1 bag/box.
	 
	 	 	 	 
	 

	 	 	 	Pouches shall be oriented with the label facing up towards the opening of the box and with the label oriented in the same direction as the
box label.
	 
	 	 	 	 
	 

	 	Dimensions:
	 	For 4” x 5” product:
	 

	 	 	 	               232 mm x 156 mm x 19 mm (8 5/8 “ x 6 1/8” x 3/4”)
	 
	 	 	 	 
	 

	 	 	 	For
3⁄4 ” x 12” product:
	 

	 	 	 	               206
mm x 80 mm x 25 mm (8
1/8”
x 3
1/8” x 1”)
	 
	 	 	 	 
	 

	 	Inserts:
	 	Each box contains one product insert.

Page 8 of 18

 

 

	 	 	 	 	 	 	 
	

	 	 	 	PRODUCT SPECIFICATION

	 
	 	 	 	 	 	 
	 

	 	DESIGN PROJECT :
	 	Acticoat Absorbent Dressing

	 

	 	DHF #:
	 	 	 	2005
	 

	 	VERSION :
	 	 	 	1.2

	 	 	 	 	 
	 

	Labeling:
	 	 	Each box shall be labeled with a product code and size and
lot/expiry date as defined on the Boxing and Casing Operating
Specification.
	 
	 	 	 	 
	 

	 	 	 	One label is affixed to the bottom end of each box.

	7.1.3	 	Outer Packaging (Case)
	 
	 	 	Unprinted cases, the same as those used for the Acticoat Burn Dressing, will be used
for shipping bulk Acticoat Alginate Dressings.
	 
	7.1.4	 	Product Insert

	 	 	 	 	 
	 

	 	Part number:
	 	A5008
	 
	 	 	 	 
	 

	 	Composition:
	 	Hammermill Bond/wr 24 lb., white paper
	 
	 	 	 	 
	 

	 	Dimensions:
	 	5.5” x 8.5” (14.0 cm x 21.6 cm) folded into 3 sections, with
the printed side facing out, to make a 5.5” x 2.83” insert
	 
	 	 	 	 
	 

	 	Appearance:
	 	Clean, white, and no wrinkles or tears.
	 
	 	 	 	 
	 

	 	Printing:
	 	Printed with the image shown in Figure 5.
	 
	 	 	 	 
	 

	 	Colours:
	 	The Pantone colours used for printing are as follows:
	 
	 	 	 	 
	 

	 	 	 	Grey            38% of Black
	 

	 	 	 	Black

	8.0	 	LABELING
	 
	8.1	 	LANGUAGE REQUIREMENT

	 	•	 	English, French-Canadian, Latin American Spanish

	8.2	 	PACKAGE LABELS

	 	•	 	See Figures 1-5 at end of document

	9.0	 	REGULATORY COMPLIANCE

	 	•	 	US FDA 510(k) AND HPB
notification;
	 
	 	•	 	MDD compliance

	10.0	 	MANUFACTURING/QC METHODS
	 
	10.1	 	KEY PROCESSES

Page 9 of 18

 

 

	 	 	 	 	 	 	 
	

	 	 	 	PRODUCT SPECIFICATION

	 
	 	 	 	 	 	 
	 

	 	DESIGN PROJECT :
	 	Acticoat Absorbent Dressing

	 

	 	DHF #:
	 	 	 	2005
	 

	 	VERSION :
	 	 	 	1.2

	 	•	 	The coating of silver onto the non-woven calcium alginate will be carried out
using a similar
process as that used for coating HDPE. The roll of alginate will be fitted with a leader
and
trailer of tyvek to minimize waste of alginate in the start up and finish stages of the
roll to roll
coating. Coating of the alginate will be conducted in four passes, two for each side (1
basecoat pass & 1 topcoat pass).
	 
	 	•	 	Slitting of the alginate web will be conducted using a crush cutting module.
	 
	 	•	 	Packaging will be performed using the TM Packaging Machine.
	 
	 	•	 	An approved contractor will conduct sterilization of pouches. Packing of
pouches into boxes
and cases will be carried out after sterilization.

	10.2	 	ENVIRONMENTAL REQUIREMENTS FOR MANUFACTURE

	 	•	 	Slitting and packaging will be performed in the controlled environment room.

	10.3	 	APPLICABLE QUALITY CONTROL STANDARDS
	 
	 	 	The product will be manufactured in accordance with the quality practices specified in the
following documents:

	 	•	 	EN 46001:1996, Quality Systems — Medical Devices — Particular Requirements for
the
Application of EN29001
	 
	 	•	 	ISO 13485:1996, Quality Systems — Medical Devices — Particular Requirements for
the
Application of ISO 9001
	 
	 	•	 	Quality System Regulations specified in the Current Good Manufacturing
Practices (CGMP)
for medical devices; 21 CFR part 820

	10.4	 	PROPOSED QUALITY CONTROL TESTING / TEST REQUIREMENTS

	 	10.4.1	 	Raw Materials Testing: Non-woven calcium alginate:
	 
	 	 	 	The width, thickness and basis weight will be confirmed during the material
receiving and according to procedure WB-10-01;
	 
	 	 	 	The non-woven calcium alginate requires validation as a raw material. Until
validation is completed, each lot of material received will require a subsequent
product validation.

	 	10.4.2	 	In-Process Testing:
	 
	 	 	 	Both ends of each roll of silver coated alginate will be tested for total silver and
NH4OH soluble silver before slitting. Three samples will be taken to represent the
left, centre and right sections of the material according to WB-09-03-02.

Page 10 of 18

 

 

	 	 	 	 	 	 	 
	

	 	 	 	PRODUCT SPECIFICATION

	 
	 	 	 	 	 	 
	 

	 	DESIGN PROJECT :
	 	Acticoat Absorbent Dressing

	 

	 	DHF #:
	 	 	 	2005
	 

	 	VERSION :
	 	 	 	1.2

	 	 	 	 	 
	Characteristic	 	Procedure	 	Specification
	Total Silver

	 	WB-10-02-14
	 	0.88
mg/cm2 – 1.40 mg/cm2 
	 
	 	 	 	 
	NH4OH soluble silver

	 	WB-10-02-14
	 	3 0.45 mg/cm2 

providing that it is between 35% and 

80% of the Total Silver

	10.4.3	 	Finished Device Testing:
	 
	 	 	The finished product must have the following performance characteristics:

	 	 	 	 	 
	Characteristic	 	Procedure	 	Specification
	Size

	 	WB-10-02-07
	 	As section 3.3
	 
	 	 	 	 
	Appearance

	 	WB-10-02-08
	 	As section 3.4
	 
	 	 	 	 
	NH4OH soluble silver (at the
time of release)

	 	WB-10-02-14
	 	3 0.45 mg/cm2 
providing that it is
between 35% and 

80% of the Total Silver
	 
	 	 	 	 
	NH4OH soluble silver (at the
end of the shelf life)

	 	WB-10-02-14
	 	3 0.20 mg/cm2 providing it is greater
than 20% of the Total Silver
	 
	 	 	 	 
	Total Silver

	 	WB-10-02-14
	 	0.88
mg/cm2 – 1.40 mg/cm2 
	 
	 	 	 	 
	Pouch label appearance

	 	WB-10-02-03
	 	As per section 7.1.1
	 
	 	 	 	 
	Pouch seal size & position

	 	WB-10-02-04
	 	As per section 7.1.1
	 
	 	 	 	 
	Pouch seal strength

	 	WB-10-02-05
	 	As per section 7.1.1
	 
	 	 	 	 
	Pouch seal integrity

	 	WB-10-02-02
	 	As per section 7.1.1
	 

	 	WB-10-02-06	 	 

	10.5	 	EQUIPMENT TO BE VALIDATED:
	 
	 	 	Crush Cutting Nodule
	 
	10.6	 	PROCESSES TO BE VALIDATED:
	 
	 	 	Coating, slitting, packaging, sterilization, burst testing and silver analysis.

Page 11 of 18

 

 

	 	 	 	 	 	 	 
	

	 	 	 	PRODUCT SPECIFICATION

	 
	 	 	 	 	 	 
	 

	 	DESIGN PROJECT :
	 	Acticoat Absorbent Dressing

	 

	 	DHF #:
	 	 	 	2005
	 

	 	VERSION :
	 	 	 	1.2

	11.0	 	Shelf Life

Minimum remaining shelf life: 0 months

	12.0	 	Approval

	 	 	 	 	 	 	 
	Department	 	Name/Signature	 	Title	 	Date
	Project Leader
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Marketing
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Science and
Technology
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Manufacturing
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Quality Assurance
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Regulatory Affairs
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	New Product

Development
	 	 	 	 	 	 

Page 12 of 18

 

 

	 	 	 	 	 	 	 
	

	 	DESIGN PROJECT:	 	PRODUCT SPECIFICATION
Acticoat Absorbent Dressing

	 

	 	DHF #:
	 	 	 	2005
	 

	 	VERSION:
	 	 	 	1.2

Figure 1: Pouch Label for Product Size 4” x 5”

Page 13 of 18

 

	 	 	 	 	 	 	 
	

	 	DESIGN PROJECT:	 	PRODUCT SPECIFICATION
Acticoat Absorbent Dressing

	 

	 	DHF #:
	 	 	 	2005
	 

	 	VERSION:
	 	 	 	1.2

Figure
2: Pouch Label for Product Size
3/4” x 12”

Page 14 of 18

 

	 	 	 	 	 	 	 
	

	 	DESIGN PROJECT:	 	PRODUCT SPECIFICATION
Acticoat Absorbent Dressing

	 

	 	DHF #:
	 	 	 	2005
	 

	 	VERSION:
	 	 	 	1.2

Figure 3: Box Label for Product Size 4” x 5”

Page 15 of 18

 

	 	 	 	 	 	 	 
	

	 	DESIGN PROJECT:	 	PRODUCT SPECIFICATION
Acticoat Absorbent Dressing

	 

	 	DHF #:
	 	 	 	2005
	 

	 	VERSION:
	 	 	 	1.2

Figure 4: Box Label For Product Size 3/4” x 12”

Page 16 of 18

 

	 	 	 	 	 	 	 
	

	 	DESIGN PROJECT:	 	PRODUCT SPECIFICATION
Acticoat Absorbent Dressing

	 

	 	DHF #:
	 	 	 	2005
	 

	 	VERSION:
	 	 	 	1.2

Page 17 of 18

 

	 	 	 	 	 	 	 
	

	 	DESIGN PROJECT:	 	PRODUCT SPECIFICATION
Acticoat Absorbent Dressing

	 

	 	DHF #:
	 	 	 	2005
	 

	 	VERSION:
	 	 	 	1.2

Figure 5: Product Insert

Page 18 of 18

 

SCHEDULE B

to
a Supply Agreement made effective as of May 8, 2001 among

Westaim Biomedical Corp, Smith & Nephew Inc, Smith &

Nephew, Inc. and T. J. Smith & Nephew Limited

ACTICOAT ABSORBENT DRESSING PRODUCT SPECIFICATIONS

	 	 	 
	

	 	PRODUCT SPECIFICATION

	 	 	 	 	 
	 

	 	DESIGN PROJECT:
	 	Acticoat Moisture

Control Dressing
	 	 	DHF#:	 	2006

	 	 	VERSION:	 	1.2

	1.0	 	DESIGN DESCRIPTION
	 
	1.1	 	SUMMARY

	 	1.1.1	 	This specification is for the Acticoat Moisture Control Dressing, that is
intended to provide superior performance by extending the duration of use to seven days
and by combining antimicrobial activity with a polyurethane foam that provides a light
to moderate amount of absorbency. One product size will be produced: 5” x 5” (Product
code: 20211).

	1.2	 	THEORY OF OPERATION OF THE PROPOSED DESIGN

	 	1.2.1	 	Foam will be used as the absorbent to enhance antimicrobial activity of the
silver coating by providing a zone, and residence time, for killing of microorganisms.
	 
	 	1.2.2	 	The foam in sufficient thickness will be used to absorb a specified amount
of wound exudate.
	 
	 	1.2.3	 	The dressing will provide antimicrobial activity through a sustained release
of silver, which will minimize bacterial penetration to the wound and within the
dressing.
	 
	 	1.2.4	 	To maintain a moist wound environment, an appropriate secondary dressing may
be necessary to limit moisture evaporation.

	1.3	 	DRAWINGS/SCHEMATICS (REFERENCE APPLICABLE ATTACHMENTS)

	 	1.3.1	 	The following drawings and schematics are shown at the end of the document:

	 	•	 	Figure 1: Package Label
	 
	 	•	 	Figure 2: Box Label
	 
	 	•	 	Figure 3: Product Insert

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATION

	 	 	 	 	 
	 

	 	DESIGN PROJECT:
	 	Acticoat Moisture

Control Dressing
	 	 	DHF#:	 	2006

	 	 	VERSION:	 	1.2

	2.0	 	COMPARISON WITH COMPETITIVE DEVICES
	 
	2.1	 	The gold standards for this product are the Acticoat® silver-coated 5 layer Foam Dressing
(FDA Number — K000051, Westaim Biomedical Corp.) in terms of antimicrobial activity, and
Hydrasorb Sponge Dressing (Avitar Inc.) in terms of physical characteristics.
	 
	3.0	 	PHYSICAL ATTRIBUTES
	 
	3.1	 	MATERIALS OF CONSTRUCTION

	 	3.1.1	 	New Materials
	 
	 	 	 	The only new material of construction required is hydrophilic polyurethane foam. The
Westaim part number is A2005.
	 
	 	3.1.2	 	Vendor/Supplier Information

	 	 	 	 	 
	 

	 	Manufacturer:
	 	Lendell Manufacturing Inc.
	 
	 	 	 	 
	 

	 	Substance:
	 	Hydrophilic polyurethane foam
	 
	 	 	 	 
	 

	 	Description:
	 	Medical grade TIGHT CELL foam
	 
	 	 	 	 
	 

	 	Width:
	 	As indicated on the Purchase Order
	 
	 	 	 	 
	 

	 	Thickness:
	 	1/4” ±  1/1 6” (0.64
±  0.16 cm)
	 
	 	 	 	 
	 

	 	Absorbency:
	 	15.0 ± 4.0 g of water / g of foam
	 
	 	 	 	 
	 

	 	Density:
	 	9.1
± 0.8 g/100 cm3

	 	3.1.3	 	Rare or Single-Source Materials
	 
	 	 	 	The hydrophilic polyurethane foam used for the development of this product has been
procured from only one supplier. Further testing will be required to validate
alternative materials from other suppliers.
	 
	 	3.1.4	 	Special Vendor Contract Requirement

Page 2

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATION

	 	 	 	 	 
	 

	 	DESIGN PROJECT:
	 	Acticoat Moisture

Control Dressing
	 	 	DHF#:	 	2006

	 	 	VERSION:	 	1.2

	 	 	 	Lendell Manufacturing Inc. will be provided with the current raw
material specification. The current specification (PS-0056) will be included with,
or referenced on each purchase order.

	3.2	 	CONSTRUCTION

	 	3.2.1	 	One-ply hydrophilic polyurethane foam coated with Acticoat nanocrystalline
silver on both sides.

	3.3	 	SIZES

	 	3.3.1	 	The size, as per WB-10-02-07, is acceptable if the sample falls within the
dimensions defined in the table below.

	 	 	 
	Dressing Size (on label)	 	Measured Dimensions (cm)
	5”
× 5”

	 	Length - 12.7 (+ 1.2, - 0.5)
	(12.5
cm × 12.5 cm)

	 	Width - 12.7 (+1.2, - 0.5)
	 

	 	Thickness - 0.64 (+ 0.16, - 0.32)

	3.4	 	APPEARANCE

	 	3.4.1 The appearance, as per WB-10-02-08, of the sample is acceptable if the following
criteria are met:

	 	•	 	both sides demonstrate a uniform color when compared to the appearance
standards as per WB-10-02-31
	 
	 	•	 	the presence of white spots does not exceed the approved standards
	 
	 	•	 	both sides show no strong stripes, creases, colour fading, patches or other
discoloration
	 
	 	•	 	the four edges are clean-cut with two edges open and two edges closed
	 
	 	•	 	only minor pinching or separation is observed along the open or closed sides
	 
	 	•	 	no melted or burnt patches, wrinkles, rips or tears are present

	 	3.4.2	 	Due to the subjective nature of assessing appearance conformity, the following
applies:

	 	•	 	verify conformance to the stated specification

Page 3

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATION

	 	 	 	 	 
	 

	 	DESIGN PROJECT:
	 	Acticoat Moisture

Control Dressing
	 	 	DHF#:	 	2006

	 	 	VERSION:	 	1.2

	 	•	 	compare the sample to work standards when possible
	 
	 	•	 	if the observations are questionable the Quality Systems Manager
will assess conformance to the specification
	 
	 	•	 	if the product does not meet predefined requirements, reject the sample
	 
	 	•	 	if it is unclear whether the product meets the requirements,
reject the sample, have the product quarantined as per WB-15-02-10, and convene
an MRB as per WB-13-01

	3.5	 	COLOR

	 	3.5.1	 	The product will be a uniform gray color.
	 
	 	3.5.2	 	Due to the difficulty of measuring the product colour by the Minolta
instrument, the acceptability of color will be determined by comparison to a set of
colour standards.

	4.0	 	PERFORMANCE ATTRIBUTES
	 
	4.1	 	PARAMETERS OF OPERATION

	 	4.1.1	 	Efficacy

	 	•	 	Will produce at least a 4.0 log reduction of Pseudomonas
aeruginosa and a 3.0 log reduction of Staphylococcus aureus in 120 minutes
according to procedure WB-10-03-24.
	 
	 	•	 	Will maintain antimicrobial activity by demonstrating 7 days
plate to plate CZOI efficacy using procedure WB-10-03-04.

	 	4.1.2	 	Absorbency

	 	•	 	The absorbency without compression will be at least 12.0 g of
water / g of dressing using procedure WB-10-03-11.
	 
	 	•	 	The absorbency under equivalence of 50 mmHg pressure will be at
least 10.0 g of water/g of dressing using procedure WB-10-03-27.

	 	4.1.3	 	Stability
	 
	 	 	 	The shelf life of the product should be two years from the date of coating.
However, at the time of initial launch, a six month shelf life will be specified
until sufficient data is established to justify a shelf life of two years.

Page 4

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATION

	 	 	 	 	 
	 

	 	DESIGN PROJECT:
	 	Acticoat Moisture

Control Dressing
	 	 	DHF#:	 	2006

	 	 	VERSION:	 	1.2

	4.2	 	EQUIPMENT/MATERIALS

	 	4.2.1	 	The following equipment is required for use of the device:

	 	•	 	scissors
	 
	 	•	 	appropriate secondary dressing
	 
	 	•	 	adhesive tape or other attachment products

	4.3	 	DIRECTIONS FOR USE

	 	4.3.1	 	The following directions for use will be specified:

	 	•	 	cleanse the wound using conventional, non-oil based techniques
and leave wound moist
	 
	 	•	 	remove the dressing from the package
	 
	 	•	 	apply the dressing to the wound and secure with an appropriate
secondary dressing that will maintain a moist environment
	 
	 	•	 	ensure that the dressing remains moist, but not so wet that tissue maceration
occurs
	 
	 	•	 	change the dressing depending on the amount of exudate and the
condition of the wound
	 
	 	•	 	if the dressing dries and adheres to the wound, moisten or
soak the dressing prior to removal
	 
	 	•	 	avoid forceful removal and disruption of the healing wound

	5.0	 	VOLUNTARY STANDARDS

	5.1	 	Voluntary standards include bioactivity, antimicrobial longevity and absorbency standards
as specified in section 4.1.

	6.0	 	SAFETY ATTRIBUTES

	6.1	 	BIOCOMPATIBILITY

	 	6.1.1	 	Biocompatible as determined by cytotoxicity (biological reactivity),
dermal irritation, skin sensitization and porcine model wound healing tests.

	6.2	 	KNOWN LIMITATIONS (CAUTIONS)

Page 5

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATION

	 	 	 	 	 
	 

	 	DESIGN PROJECT:
	 	Acticoat Moisture

Control Dressing
	 	 	DHF#:	 	2006

	 	 	VERSION:	 	1.2

	 	6.2.1	 	The following known limitations will be specified:

	 	•	 	for external use only
	 
	 	•	 	should not be used on patients with a known sensitivity to silver
	 
	 	•	 	do not use on dry or non-exuding wounds unless the dressing is pre-moistened
	 
	 	•	 	may cause transient discoloration
	 
	 	•	 	not compatible with oil-based products, such as petrolatum
	 
	 	•	 	not compatible with MRI (Magnetic Resonance Imaging) procedures
	 
	 	•	 	should not come in contact with electrodes or conductive gels
during electronic measurements
	 
	 	•	 	avoid exposure to temperatures above 120°F (50°C)
	 
	 	•	 	do not use if product color is not uniform
	 
	 	•	 	single use only
	 
	 	•	 	do not re-sterilize
	 
	 	•	 	do not use if package is damaged

	7.0	 	HUMAN FACTORS
	 
	7.1	 	Instruction for use will be provided on a package insert. Training will be available.
	 
	7.2	 	The product is intended for use by professional health care providers only.
	 
	7.3	 	The product is not intended for OTC sales.
	 
	7.4	 	The dressing should be non-directional, or the directionality should be clearly indicated to
prevent the dressing from being applied with wrong side to the wound.
	 
	8.0	 	STERILIZATION
	 
	8.1	 	STERILIZATION METHOD

	 	8.1.1	 	The product will be sterilized using electron beam irradiation.

	8.2	 	STERILIZATION VERIFICATION

	 	8.2.1	 	The adequacy of the sterilization processes will be assessed by
demonstrating that a Sterility Assurance Level (SAL) of
10-6 is achieved.

Page 6

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATION

	 	 	 	 	 
	 

	 	DESIGN PROJECT:
	 	Acticoat Moisture

Control Dressing
	 	 	DHF#:	 	2006

	 	 	VERSION:	 	1.2

	8.3	 	SPECIAL CONCERNS

	 	8.3.1	 	Not applicable.

	9.0	 	PACKAGING
	 
	9.1	 	PACKAGING CONFIGURATION

	 	9.1.1	 	The product will be produced in one size: 5” x 5” that will be
packaged in a 7” x 10” peelable pouch. The pouches will be packaged 5 per box
and the boxes will be contained in plain cardboard cases.

	9.2	 	PACKAGING MATERIALS

	 	9.2.1	 	Primary Packaging
(pouch)

	 	 	 	 	 
	 

	 	Part number:
	 	5” x 5” Front – P/N A3041   Back — P/N A3008
	 
	 	 	 	 
	 

	 	Composition:
	 	Front – Tyvek 1073B (Spunbonded polyolefin) coated with SBP 2000
and printed
 Back – Tyvek 1073B (Spunbonded polyolefin) uncoated and
imprinted
	 
	 	 	 	 
	 

	 	Basis Weight:
	 	2.57
± 0.21 oz./sq.yd. (8.71
± 0.71 mg/cm2)
	 
	 	 	 	 
	 

	 	Roll Widths:
	 	7” ± 0.25”
	 
	 	 	 	 
	 

	 	Appearance:
	 	Clean, opaque, white, and no wrinkles or tears
	 
	 	 	 	 
	 

	 	Printing:
	 	The image shown in Figure 1 will be printed on the coated side
of the Tyvek. The printed side will be on the outside of the roll with
the top of the label facing the leader end of the roll.
	 
	 	 	 	 
	 

	 	Colors:
	 	The Pantone colors used for printing are as follows:
	 
	 	 	 	 
	 

	 	 	 	•     Blue 286
	 
	 	 	 	 
	 

	 	 	 	•     Grey Cool Grey 6
	 
	 	 	 	 
	 

	 	 	 	•     Green 3415

Page 7

 

 

	 	 	 
	

	 	PRODUCT
SPECIFICATION         
                

	 	 	 	 	 
	 

	 	DESIGN PROJECT:
	 	Acticoat Moisture

Control Dressing
	 	 	DHF#:	 	2006

	 	 	VERSION:	 	1.2

	 	 	 	 	 	 	 
	 

	 	 	 	•
	 	Black
	 
	 	 	 	 	 	 
	 	 	Certification:	 	Technical specifications will be certified for each lot of Tyvek
packaging. Supplier quality documentation that includes composition,
product type, part identification (lot number), and quantity shipped will be
required with each return shipment.
	 
	 	 	 	 	 	 
	 	 	Contents:	 	Peelable pouch with chevron seal, each containing one dressing.
	 
	 	 	 	 	 	 
	 	 	Dimensions:	 	The 5” x 5” product will be 178 mm wide x 254 mm long (7” x 10”) with a
size tolerance ± 6.35 mm (± 0.25”)
	 
	 	 	 	 	 	 
	 	 	Label:	 	The label appearance will be acceptable as per WB-10-02-03 if the
following criteria are met:
	 
	 	 	 	 	 	 
	 

	 	 	 	•
	 	the label is centered on the package
	 
	 	 	 	 	 	 
	 

	 	 	 	•
	 	except for the internal part number for the packaging material,
printing should not carry over into the seam
	 
	 	 	 	 	 	 
	 

	 	 	 	•
	 	the lot and expiry date stamps are straight and in the bottom left
corner
	 
	 	 	 	 	 	 
	 

	 	 	 	•
	 	the printing is readable
	 
	 	 	 	 	 	 
	 

	 	 	 	•
	 	the label matches the dressing in the package
	 
	 	 	 	 	 	 
	 	 	Seal:	 	The seal size and position will be acceptable as per WB-10-02-04 if the
following criteria are met:
	 
	 	 	 	 	 	 
	 

	 	 	 	•
	 	the seal is at least 7 mm wide, within 7 mm from side edge and within
10 mm from the bottom edge
	 
	 	 	 	 	 	 
	 

	 	 	 	•
	 	the Chevron seal is at the top of the label
	 
	 	 	 	 	 	 
	 	 	Seal Integrity:	 	The seal integrity will be acceptable as per WB-10-02-06 and WB-10-02-02
if the seal is continuous with no bubbles, blisters or other inconsistencies
that impact package integrity. If channels are observed during the dye
penetration test, a minimum seal width of 7 mm must be maintained to accept the
results.

Page 8

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATION

	 	 	 	 	 
	 

	 	DESIGN PROJECT:
	 	Acticoat Moisture

Control Dressing
	 	 	DHF#:	 	2006

	 	 	VERSION:	 	1.2

	 	 	 	 	 
	 

	 	Seal Strength:
	 	All package pouches will be subject to a burst test. The burst pressure
as per WB-10-02-05 will be acceptable if it is at least l.0 psig.

	 	9.2.1	 	Outer Packaging (box)

	 	 	 	 	 
	 

	 	Part number:
	 	5” x 5”: A4041
	 
	 	 	 	 
	 

	 	Composition:
	 	Cardboard, 0.02 clay coated solid bleached sulfite with 0.5 mil poly
coated backside
	 
	 	 	 	 
	 

	 	Printing:
	 	Printed with the images shown in Figure 2
	 
	 	 	 	 
	 

	 	Colors:
	 	The Pantone colors used for printing are as follows:
	 
	 	 	 	 
	 

	 	 	 	•     Blue 286
	 
	 	 	 	 
	 

	 	 	 	•     Grey Cool Grey 6
	 
	 	 	 	 
	 

	 	 	 	•     Green 3415
	 
	 	 	 	 
	 

	 	 	 	•     Black
	 
	 	 	 	 
	 

	 	Appearance:
	 	White, no wrinkles, straight folds, side glued with tuck ends
	 
	 	 	 	 
	 

	 	Box Style:
	 	Notched reverse tuck end (French) carton
	 
	 	 	 	 
	 

	 	Contents:
	 	5 dressings/box. Pouches will be oriented with the label facing up
towards the opening of the box and with the label oriented in the same
direction as the box label.
	 
	 	 	 	 
	 

	 	Dimensions:
	 	The 5” x 5” product will be 181 mm wide x 257 mm long x 32 mm thick
(7
1/8”
x 10  1/
8”
x   1 1/4”)
	 
	 	 	 	 
	 

	 	Inserts:
	 	Each box will contain one product insert
	 
	 	 	 	 
	 

	 	Labeling:
	 	Each box will be labeled with a lot/expiry date as defined on the Boxing
and Casing Operating Specification. One label will be affixed to the bottom
end of each box.

	 	9.2.3	 	Outer Packaging (Case)

Page 9

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATION

	 	 	 	 	 
	 

	 	DESIGN PROJECT:
	 	Acticoat Moisture

Control Dressing
	 	 	DHF#:	 	2006

	 	 	VERSION:	 	1.2

	 	 	 	Unprinted cases, the same as those used for the Acticoat Burn Dressing, will be used
for shipping bulk Acticoat Moisture Control Dressings.
	 
	 	9.2.4	 	Product Insert

	 	 	 	 	 
	 

	 	Part number:
	 	A5003
	 
	 	 	 	 
	 

	 	Composition
	 	Paper — Hammermill Bond/wr 24 lb., white paper
	 
	 	 	 	 
	 

	 	Dimensions:
	 	5.5” x 8.5” folded into 3 sections to make 5.5” x 2.83”
	 
	 	 	 	 
	 

	 	Appearance:
	 	Clean, white, and no wrinkles or tears
	 
	 	 	 	 
	 

	 	Printing:
	 	Printed with the image shown in Figure 3
	 
	 	 	 	 
	 

	 	Colors:
	 	The Pantone colors used for printing are as follows:
	 
	 	 	 	 
	 

	 	 	 	•     Green 3415
	 

	 	 	 	•     Black

	10.0	 	LABELLING
	 
	10.1	 	Language Requirement: English, French-Canadian and Latin American Spanish.
	 
	10.2	 	Package Labels: see Figures 1-3 at the end of this document.
	 
	11.0	 	REGULATORY COMPLIANCE
	 
	11.1	 	The product will be developed, manufactured and distributed in accordance with the legal
requirements in the jurisdiction in which the product is to be sold.
	 
	11.2	 	Notification: US FDA via 510(k), HPB and Notified Body.
	 
	11.3	 	The product will be developed, manufactured and distributed in accordance with the
requirements stated in the MDD.
	 
	12.0	 	QUALITY STANDARDS

Page 10

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATION

	 	 	 	 	 
	 

	 	DESIGN PROJECT:
	 	Acticoat Moisture

Control Dressing
	 	 	DHF#:	 	2006

	 	 	VERSION:	 	1.2

	12.1	 	The product will be developed, manufactured and distributed in accordance with the
quality practices specified in the following documents:

	 	•	 	EN 46001:1996, Quality Systems — Medical Devices — Particular Requirements for
the Application of EN 29001
	 
	 	•	 	ISO 13485:1996, Quality Systems — Medical Devices — Particular Requirements for
the Application of ISO 9001
	 
	 	•	 	Quality System Regulations specified in the Current Good Manufacturing Practices
(CGMP) for medical devices; 21 CFR part 820

	13.0	 	MANUFACTURING
	 
	13.1	 	KEY PROCESSES

	 	13.1.1	 	Not applicable.

	13.2	 	ENVIRONMENTAL REQUIREMENTS

	 	13.2.1	 	Not applicable.

	13.3	 	NEW EQUIPMENT TO BE VALIDATED

	 	13.3.1	 	Not applicable.

	13.4	 	NEW PROCESSES TO BE VALIDATED

	 	13.4.1	 	Post sterilization pumping process.

	14.0	 	QUALITY ASSURANCE

	14.1	 	EQUIPMENT TO BE VALIDATED

	 	14.1.1	 	Not applicable.

	14.2	 	PROCESSES TO BE VALIDATED

	 	14.1.2	 	Not applicable.

	14.3	 	QUALITY TESTING

Page 11

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATION

	 	 	 	 	 
	 

	 	DESIGN PROJECT:
	 	Acticoat Moisture

Control Dressing
	 	 	DHF#:	 	2006

	 	 	VERSION:	 	1.2

	 	14.3.1	 	Hydrophilic Polyurethane Foam

	 	•	 	A certificate of analysis is required from the vendor for width, thickness,
density tensile strength, and absorbency.
	 
	 	•	 	The thickness, width of the rolls and the basis weight will be confirmed
during the material receiving and according to procedure WB-10-01. The vendor will
provide certification for the other technical specifications.
	 
	 	•	 	The hydrophilic polyurethane foam requires validation as a raw material.
Until validation is completed, each lot of material received will require a subsequent
validation of the finished product.

	 	14.3.2	 	In-Process Testing:
	 
	 	 	 	Both ends of each roll of silver-coated foam will be tested
for total silver and NH4OH
soluble silver. Three samples will be taken to represent the left, center and right
sections of the material according to WB-09-03-02. The silver content must meet the
requirements specified in the table below.

	 	 	 	 	 
	Characteristic	 	Procedure	 	Specification
	Total Silver

	 	WB-10-02-14
	 	0.88–1.50 mg/cm2
	 
	 	 	 	 
	NH4OH Soluble
Silver

	 	WB-10-02-31
	 	30.45 mg/cm2, providing that it is between 35% to 80% of
the total silver

	 	14.3.3	 	Finished Device Testing:
	 
	 	 	 	The finished product must have the performance characteristics specified in the table
below.

Page 12

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATION

	 	 	 	 	 
	 

	 	DESIGN PROJECT:
	 	Acticoat Moisture

Control Dressing
	 	 	DHF#:	 	2006

	 	 	VERSION:	 	1.2

	 	 	 	 	 
	Characteristic	 	Procedure	 	Specification
	Size

	 	WB-10-02-07
	 	As section 3.2
	 
	 	 	 	 
	Appearance

	 	WB-10-02-08
	 	As section 3.3
	 
	 	 	 	 
	Colour

	 	WB-10-02-31
	 	Comparison of product to
standard colour specimens.
	 
	 	 	 	 
	Total silver

	 	WB-10-02-14
	 	0.88-1.50 mg/cm2 
	 
	 	 	 	 
	NH4OH soluble silver

	 	WB-10-02-30
	 	30.45 mg/cm2
providing that it is between 35% and
80% of the total silver at the time of
release.
	 
	 	 	 	 
	NH4OH soluble silver

	 	WB-10-02-30
	 	30.25 mg/cm2
providing it is greater than 20% of the
total silver at the end of shelf
life.
	 
	 	 	 	 
	Pouch label appearance

	 	WB-10-02-03
	 	As section 9.2.1
	 
	 	 	 	 
	Pouch seal size &

position

	 	WB-10-02-04
	 	As section 9.2.1
	 
	 	 	 	 
	Pouch seal strength

	 	WB- 10-02-05
	 	As section 9.2.1
	 
	 	 	 	 
	Pouch seal integrity

	 	WB-10-02-02
	 	As section 9.2.1
	 
	 	 	 	 
	 

	 	WB-10-02-06	 	 

Page 13

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATION

	 	 	 	 	 
	 

	 	DESIGN PROJECT:
	 	Acticoat Moisture

Control Dressing
	 	 	DHF#:	 	2006

	 	 	VERSION:	 	1.2

	15.0	 	SHELF LIFE

Minimum remaining shelf life: 0 months.

	16.0	 	APPROVAL

	 	 	 	 	 	 	 	 	 	 	 	 	 
	Department	 	Name/Signature	 	 	Title	 	 	Date	 
	Project Leader
	 	 	 	 	 	 	 	 	 	 	 	 
	Marketing
	 	 	 	 	 	 	 	 	 	 	 	 
	Science and
Technology
	 	 	 	 	 	 	 	 	 	 	 	 
	Manufacturing
	 	 	 	 	 	 	 	 	 	 	 	 
	Quality
Assurance
	 	 	 	 	 	 	 	 	 	 	 	 
	Regulatory
Affairs
	 	 	 	 	 	 	 	 	 	 	 	 
	New Product
Development
	 	 	 	 	 	 	 	 	 	 	 	 

Page 14

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATION

	 	 	 	 	 
	 

	 	DESIGN PROJECT:
	 	Acticoat Moisture

Control Dressing
	 	 	DHF#:	 	2006

	 	 	VERSION:	 	1.2

Page 15

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATION

	 	 	 	 	 
	 

	 	DESIGN PROJECT:
	 	Acticoat Moisture

Control Dressing
	 	 	DHF#:	 	2006

	 	 	VERSION:	 	1.2

Page 16

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATION

	 	 	 	 	 
	 

	 	DESIGN PROJECT:
	 	Acticoat Moisture

Control Dressing
	 	 	DHF#:	 	2006

	 	 	VERSION:	 	1.2

Figure
1: Package Label for Product Size 5”x 5”

Figure
2: Box Label for Product size 5”x 5”

Page 17

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATION

	 	 	 	 	 
	 

	 	DESIGN PROJECT:
	 	Acticoat Moisture

Control Dressing
	 	 	DHF#:	 	2006

	 	 	VERSION:	 	1.2

Page 18

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATION

	 	 	 	 	 
	 

	 	DESIGN PROJECT:
	 	Acticoat Moisture

Control Dressing
	 	 	DHF#:	 	2006

	 	 	VERSION:	 	1.2

Figure 3: Product Insert

Page 19

 

 

SCHEDULE C

to a Supply Agreement made effective as of May 8, 2001 among

Westaim Biomedical Corp, Smith & Nephew Inc, Smith &

Nephew, Inc. and T. J. Smith & Nephew Limited

ACTICOAT
ABSORBENT DRESSING PRODUCT SPECIFICATIONS

	 	 	 
	

	 	PRODUCT SPECIFICATIONS

	 	 	 	 	 
	 

	 	Design Project:
	 	Acticoat Burn Dressing
	 

	 	Design Version:
	 	2.0
	 

	 	 Design History File:
	 	11032 / 1600

	1.	 	DESIGN DESCRIPTION
	 
	1.0	 	SUMMARY
	 
		 	This document provides the specifications for the
Acticoat® Burn Dressing.
Five product configurations have been developed: 4”
x 4” (Part #: 20101 D, B or
C) and 4” x 8” (Part #: 20201 D, B or C), 8” x 16” (Part #: 20301 D, B or C), 16”
x 16” (Part #: 20401 D, B or C), and 4”x48” roll (Part #:20501 D, B, C)
	 
	1.1	 	THEORY OF OPERATION

	 	•	 	To provide 2-3 days of usable antimicrobial performance in a silver-coated
wound dressing.
	 
	 	•	 	The dressing will provide antimicrobial activity through a sustained
release of silver, which will minimize bacterial penetration to the wound and
within the dressing.

	1.2	 	DRAWINGS/SCHEMATICS (REFERENCE APPLICABLE ATTACHMENTS)
	 
	 	 	Figure 1: Package Label (4” x 4”)
	 
	 	 	Figure 2: Box Label (4” x 4”)
	 
	 	 	Figure 3: Case Label (4” x 4”)
	 
	 	 	Figure 4: Product Insert

	1.3	 	MATERIALS OF CONSTRUCTION

	 	1.3.1	 	The materials used in the construction of the Acticoat Burn Dressing are:

High density polyethylene mesh — Part number: A1000

70/30% Rayon/polyester gauze — Part number: A2000

Silver targets — Part number: A0100

	 	 	 	Specifications for these materials are located in the QSI Specification
Control database. Vendors approved to supply the different raw materials for
the burn dressing are contained within Westaim Biomedical’s Approved Supplier
List.

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATIONS

	 	 	 	 	 
	 

	 	Design Project:
	 	Acticoat Burn Dressing
	 

	 	Design Version:
	 	2.0
	 

	 	 Design History File:
	 	11032 / 1600

Page 2 of 17

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATIONS

	 	 	 	 	 
	 

	 	Design Project:
	 	Acticoat Burn Dressing
	 

	 	Design Version:
	 	2.0 
	 

	 	Design History File:
	 	11032 / 1600

	 	 	 	 	 
	 

	 	Appearance:
	 	White, no wrinkles, straight folds, side glued with tuck ends.

	 	C.	 	OUTER PACKAGING (CASE)

	 	 	 	 	 
	 

	 	Composition:
	 	Corrugated case Kraft 175B, silver, outside regular adhesive. 
	 
	 	 	 	 
	 

	 	Printing:	 	None (An adhesive label will be affixed to each end of the box)
	 
	 	 	 	 
	 

	 	 	 	See Figure 3 for the 4” x 4” label.
	 
	 	 	 	 
	 

	 	Colours:
	 	The Pantone colours used for printing the label are as follows:
	 
	 	 	 	 
	 

	 	 	 	     Blue          286
	 

	 	 	 	     Grey          Cool Grey 6
	 

	 	 	 	     Black
	 
	 	 	 	 
	 

	 	Appearance:
	 	White exterior, no wrinkles, straight folds, side glued with tuck ends.

	 	D.	 	PRODUCT INSERT

	 	 	 	 	 
	 

	 	Composition:
	 	Paper — Hammermill Bond/wr 24 lb., white paper
	 
	 	 	 	 
	 

	 	Dimensions:
	 	5.5” x 8.5” (14.0 cm x 21.6 cm) folded into 3 sections, with the
printed side facing out, to make a 5.5” x 2.83” insert.
	 
	 	 	 	 
	 

	 	Printing:
	 	The label is printed in 3 languages and shown in Figure 4
	 
	 	 	 	 
	 

	 	Colours:
	 	The Pantone colours used for printing are as follows:
	 
	 	 	 	 
	 

	 	 	 	     Blue          286
	 

	 	 	 	     Black
	 
	 	 	 	 
	 

	 	Appearance:
	 	Clean, white, and no wrinkles or tears.

	1.4.3.	 	PACKAGING SPECIFICATIONS

	 	A.	 	PRIMARY PACKAGING (POUCH)

	 	 	 	 	 	 	 
	 	 	Contents:	 	Peelable pouch with chevron seal, each containing one dressing.
	 
	 	 	 	 	 	 
	 

	 	Dimensions:
	 	For 4” x 4” product:	          152
mm x 203 mm (6” x 8”)
	 
	 	 	 	 
	 

	 	 	 	For 4” x 8” product:	          152
mm x 305 mm (6” x 12”)
	 
	 	 	 	 
	 

	 	 	 	For 8” x 16” product:	          254
mm x 305 mm (10” x 12”)
	 
	 	 	 	 
	 

	 	 	 	For 16” x 16” product:	          254
mm x 305 mm (10” x 12”)
	 
	 	 	 	 	 	 
	 

	 	 	 	For 4” x 48” product:	          152
mm x 254 mm (6” x 10”)
	 
	 	 	 	 	 	 
	 	 	 	 	Size tolerance ± 6.35 mm (± 0.25”).

Page 4 of 17

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATIONS

	 	 	 	 	 
	 

	 	Design Project:
	 	Acticoat Burn Dressing
	 

	 	Design Version:
	 	2.0
	 

	 	 Design History File:
	 	11032 / 1600

	 	 	 	 	 	 	 
	 	 	Label:	 	The label appearance is acceptable as per WB-10-02-03 if the
following criteria are met:
	 
	 	 	 	 	 	 
	 

	 	 	 	a)
	 	the label is centered on the package;
	 
	 	 	 	 	 	 
	 

	 	 	 	b)
	 	except for the internal part number for
the packaging material, printing must not carry over into the seam;
	 
	 	 	 	 	 	 
	 

	 	 	 	c)
	 	the lot and expiry date stamps are
straight and in the bottom left corner;
	 
	 	 	 	 	 	 
	 

	 	 	 	d)
	 	the printing is readable; and
	 
	 	 	 	 	 	 
	 

	 	 	 	e)
	 	the label matches the dressing in the package.
	 
	 	 	 	 	 	 
	 	 	Seal:	 	The seal size and position, as per WB-10-02-04, is acceptable if the
following criteria are met:
	 
	 	 	 	 	 	 
	 

	 	 	 	a)
	 	the seal is at least 7 mm wide, within
7 mm from the side edge and within 10 mm from the bottom edge; and
	 
	 	 	 	 	 	 
	 

	 	 	 	b)
	 	the Chevron seal is at the top of the label.
	 
	 	 	 	 	 	 
	 	 	Seal Integrity:	 	A continuous seal with no bubbles, blisters or other inconsistencies as per WB-10-02-06 and WB-10-02-02.
	 
	 	 	 	 	 	 
	 	 	 	 	If channels are observed during the dye penetration test, a minimum
seal width of 7 mm must be maintained to accept the results.
	 
	 	 	 	 	 	 
	 	 	Seal Strength:	 	All package pouches will have a burst test pressure of at least 1.0 psig as per WB-10-02-05.

	 	B.	 	OUTER PACKAGING (BOX)

	 	 	 	 	 
	 

	 	Box style:
	 	Notched reverse tuck end (French) carton.
	 
	 	 	 	 
	 

	 	Contents:
	 	Each box contains 6 or 12 dressings as indicated on the label.
	 
	 	 	 	 
	 

	 	 	 	Pouches shall be oriented with the label facing up towards the opening
of the box and with the label oriented in the same direction as the box
label.
	 
	 	 	 	 
	 

	 	Dimensions:
	 	For 4” x 4” product:
	 

	 	 	 	          156 mm x 206 mm x 25 mm (6 1/8” x 8 1/8” x 1”)
	 
	 	 	 	 
	 

	 	 	 	For 4” x 8” product:
	 

	 	 	 	          156 mm x 308 mm x 25 mm (6 1/8” x 12 1/8” x 1”)
	 
	 	 	 	 
	 

	 	 	 	For 8” x 16” product:
	 

	 	 	 	          257 mm x 308 mm x 25 mm (10 1/8” x 12 1/8” x 1”)
	 
	 	 	 	 
	 

	 	 	 	For 16” x 16” product:
	 

	 	 	 	          257 mm x 308 mm x 25 mm (10 1/8” x 12 1/8” x 1”)

Page 5 of 17

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATIONS

	 	 	 	 	 
	 

	 	Design Project:
	 	Acticoat Burn Dressing
	 

	 	Design Version:
	 	2.0
	 

	 	 Design History File:
	 	11032 / 1600

	 	 	 	 	 
	 

	 	 	 	For 4” x 48” product:
	 

	 	 	 	          152 mm x 152 mm x 267 mm (6” x 6” x 10 1/2”)
	 
	 	 	 	 
	 

	 	Inserts:
	 	Each box contains one product insert.
	 
	 	 	 	 
	 

	 	Labeling:
	 	Each box and case shall be labeled with a product code and size
and lot/expiry date as defined on the Boxing and Casing
Operating Specification.
	 
	 	 	 	 
	 

	 	 	 	One label is affixed to the bottom end of each box.

	 	C.	 	OUTER PACKAGING (CASE)

	 	 	 	 	 
	 

	 	Dimensions:
	 	For 4” x 4” product:
	 

	 	 	 	           165 mm x 216 mm x 559 mm (6 1/2” x 8 1/2” x 22”)
	 
	 	 	 	 
	 

	 	 	 	For 4” x 8” product:
	 

	 	 	 	          165 mm x 318 mm x 559 mm (6 1/2” x 12 1/2” x 22”)
	 
	 	 	 	 
	 

	 	 	 	For 8” x 16” product:
	 

	 	 	 	          267 mm x 318 mm x 559 mm (10 1/2” x 12 1/2” x 22”)
	 
	 	 	 	 
	 

	 	 	 	For 16” x 16” product:
	 

	 	 	 	          267 mm x 318 mm x 559 mm (10 1/2” x 12 1/2” x 22”)
	 
	 	 	 	 
	 

	 	 	 	For 4” x 48” product:
	 

	 	 	 	           165 mm x 318 mm x 559 mm (6 1/2” x 12 1/2” x 22”)
	 
	 	 	 	 
	 

	 	 	 	Size tolerance ± 6.35 mm (± 0.25”)
	 
	 	 	 	 
	 

	 	Labeling:
	 	Each box and case shall be labeled with a case label, product code and size and lot/expiry date as
defined on the Boxing and Casing Operating Specification. The labels are affixed to each end of the
case.

	1.5	 	STERILIZATION

	 	 	 
	1.5.1 Sterilization Method:

	 	Gamma irradiation
	 
	 	 
	1.5.2 Sterilization Verification:

	 	Validation testing to achieve a SAL
of 10-6.
	 
	 	 
	1.5.3 Sterilization Special Concerns:

	 	Gamma irradiation should not exceed 50 kGy for a single dose or 75 kGy for a total dose.

Page 6 of 17

 

 

	 	 	 
	

	 	PRODUCT SPECIFICATIONS

	 	 	 	 	 
	 

	 	Design Project:
	 	Acticoat Burn Dressing
	 

	 	Design Version:
	 	2.0
	 

	 	 Design History File:
	 	11032 / 1600

	2.	 	FUNCTIONAL ASPECTS OF DESIGN

	2.1.	 	PHYSICAL CHARACTERISTICS

	 	2.1.1.	 	Construction:
	 
	 	 	 	Three-ply dressing consisting of a piece of rayon/polyester gauze laminated between two
pieces of silver coated high-density polyethylene mesh.

	 	2.1.2.	 	Size:
	 
	 	 	 	The size, as per WB-10-02-07, is acceptable if the sample falls within the dimensions
below.

	 	 	 	 	 
	Package Size (on label)	 	Dressing Width	 	Dressing Length
	    Width x Length	 	Dimensions	 	Dimensions
	4”x 4”

	 	9.7 cm - 11.4 cm
	 	9.7 cm - 11.4 cm
	(10 cm x 10 cm)
	 	 	 	 
	 
	 	 	 	 
	4”x 8”

	 	9.7 cm - 11.4 cm
	 	19.8 cm - 21.6 cm
	(10 cm x 20 cm)
	 	 	 	 
	 
	 	 	 	 
	8”x l6”

	 	19.8 cm - 21.6 cm
	 	39.6 cm - 41.9 cm
	(20 cm x 40 cm)
	 	 	 	 
	 
	 	 	 	 
	16”x l6”

	 	39.6 cm - 41.9 cm
	 	39.6 cm - 41.9 cm
	(40 cm x 40 cm)
	 	 	 	 
	 
	 	 	 	 
	4”x 48”

	 	9.7 cm - 11.4 cm
	 	119.4 cm - 124.5 cm
	(10 cm x 120 cm)
	 	 	 	 

	 	2.1.3.	 	Appearance

	 	2.1.3.1.	 	The appearance, as per WB-10-02-08, of the sample is acceptable if the
following criteria are met:

	 	a)	 	bluish side facing out on one side (top) and in on
the other side (bottom) of the laminated dressing;

Page 7 of 17

 

 

	 	 	 	 	 
	

	 	 	 	 PRODUCT SPECIFICATIONS
	 

	 	Design Project:
	 	 Acticoat Burn Dressing
	 

	 	Design Version:
	 	 2.0
	 

	 	Design History File:
	 	 11032 / 1600

	 	•	 	Has an absorbent capacity of at least 7.0 g of water/g of dressing according to
procedure WB-10-03-11; and
	 
	 	•	 	Does not lose silver when subjected to an adhesion test, procedure WB-10-03-08
and an abrasion test, procedure WB-10-03-09.

2.3. KNOWN LIMITATIONS (CAUTIONS)

	 	•	 	For external use only
	 
	 	•	 	Should not be used on patients with a known sensitivity to silver
	 
	 	•	 	May cause transient discoloration
	 
	 	•	 	Not compatible with oil-based products, such as petrolatum
	 
	 	•	 	Not compatible with MRI (Magnetic Resonance Imaging) procedures
	 
	 	•	 	Should not come in contact with electrodes or conductive gels during electronic
measurements
	 
	 	•	 	Avoid exposure to temperatures above 120°F (50°C)
	 
	 	•	 	Do not use if product color is not uniform
	 
	 	•	 	Sterile water should be used to moisten the dressing
	 
	 	•	 	Do not use if package is damaged.
	 
	 	•	 	Single use only. Do not re-sterilize

2.4. DIRECTIONS FOR USE

	 	•	 	Remove the dressing from the package.
	 
	 	•	 	Moisten the dressing with sterile water (do not use saline) and cut to
shape if necessary.
	 
	 	•	 	Apply the dressing to the wound surface and cover with an appropriate secondary
dressing that will maintain a moist environment.
	 
	 	•	 	Keep the dressing moist, but not so wet that tissue maceration occurs.
	 
	 	•	 	Examine the dressing to ensure a moist environment is being maintained
	 
	 	•	 	Change the dressing depending on the amount of exudate and the condition of the
wound.
	 
	 	•	 	If the dressing dries and adheres to the wound, moisten or soak the dressing
prior to removal.
	 
	 	•	 	Avoid forceful removal and disruption of the healing wound.

2.5. HANDLING AND STORAGE REQUIREMENTS

	 	•	 	The shelf life will be 30 month.
	 
	 	•	 	Maximum exposure temperature: 50°C.

Page 9 of 17

 

	 	 	 	 	 
	

	 	 	 	 PRODUCT SPECIFICATIONS
	 

	 	Design Project:
	 	 Acticoat Burn Dressing
	 

	 	Design Version:
	 	 2.0
	 

	 	Design History File:
	 	 11032 / 1600

3. MANUFACTURING/QC METHODS

	3.1	 	PROPOSED KEY PROCESSES (IDENTIFICATION AND DESCRIPTION OF CONTROLS)
	 
	 	 	The coating of silver onto HDPE net will be carried out using a physical vapour deposition
process in the Trial Manufacturing Roll Coater (TMRC).
	 
	 	 	Two layers of coated HDPE mesh will be laminated to the rayon/polyester nonwoven gauze and
slit to the appropriate width using the Trial Manufacturing Ultrasonic Laminating and
Slitting Machine.
	 
	 	 	The packaging of the burn dressing will be carried out using the Trial Manufacturing
Packaging Machine. Each dressing will be cut to the appropriate size and packaged in a
Tyvek pouch.
	 
	 	 	An approved contractor will conduct sterilization of pouches. Packing of pouches into
boxes and cases will be carried out after sterilization.
	 
	3.2	 	ENVIRONMENTAL REQUIREMENTS FOR MANUFACTURE
	 
	 	 	Lamination and pouching will be performed in a controlled environment room.
	 
	3.3	 	APPLICABLE QUALITY CONTROL STANDARDS
	 
	 	 	The product will be manufactured in accordance with the quality practices specified in the
following documents:

	 	o	 	EN 46001:1996, Quality Systems — Medical Devices — Particular Requirements
for the Application of EN29001
	 
	 	o	 	ISO 13485:1996, Quality Systems — Medical Devices — Particular Requirements
for the Application of ISO 9001
	 
	 	o	 	Quality System Regulations specified in the Current Good Manufacturing
Practices (CGMP) for medical devices; 21 CFR part 820

	3.4	 	PROPOSED QUALITY CONTROL TESTING / TEST REQUIREMENTS

	 	3.4.1	 	Raw Materials Testing:
	 
	 	 	 	Raw materials should be receiving and tested as per existing QSI procedures and
specifications.
	 
	 	3.4.2	 	Finished Device Testing:
	 
	 	 	 	The finished product must have the following performance
characteristics:

Page 10 of 17

 

	 	 	 	 	 
	

	 	 	 	PRODUCT SPECIFICATIONS
	 

	 	Design Project:
	 	 Acticoat Burn Dressing
	 

	 	Design Version:
	 	 2.0
	 

	 	Design History File:
	 	 11032 / 1600

	 	 	 	 	 	 	 
	Characteristic	 	Procedure	 	Specification
	Size	 	WB-10-02-07	 	As section 2.1.2 (but not including
thickness).
	Appearance	 	WB-10-02-08	 	As section 2.1.3
	Colour	 	WB-10-02-31	 	As per colour standard
	Total Silver	 	WB-10-02-14	 	0.84-1.34 mg/cm2
	NH4OH soluble silver	 	WB-10-02-14	 	342% of the Total Silver at the time of
release
	NH4OH soluble silver	 	WB-10-02-14	 	335% of the Total Silver when tested 30
months after manufacture
	Pouch label appearance

	 	WB-10-02-03
	 	a)
	 	the label is centered on the package;
	 

	 	 	 	b)
	 	except for the internal part number for the
packaging material, printing must not carry over
into the seam;
	 

	 	 	 	c)
	 	the lot and expiry date stamps are
straight and in the bottom left corner;
	 

	 	 	 	d)
	 	the printing is readable; and
	 

	 	 	 	e)
	 	the label matches the dressing in the
package.
	Pouch seal size & position

	 	WB-10-02-04
	 	a)
	 	the seal is at least 7 mm wide, within 7
mm from the side edge and within 10 mm from the
bottom edge; and
	 

	 	 	 	b)
	 	the Chevron seal is at the top of the
label.
	Pouch seal strength	 	WB-10-02-05	 	burst test pressure of at least 1.0 psig.
	Pouch seal integrity	 	WB-10-02-02
 WB-10-02-06	 	there shall be a continuous seal with no bubbles, blisters or other inconsistencies

3.5 NEW EQUIPMENT TO BE VALIDATED:

FAAS

Burst Tester

Page 11 of 17

 

	 	 	 	 	 
	

	 	 	 	PRODUCT SPECIFICATIONS
	 

	 	Design Project:
	 	 Acticoat Burn Dressing
	 

	 	Design Version:
	 	 2.0
	 

	 	Design History File:
	 	 11032 / 1600

3.6 PROCESSES TO BE VALIDATED:

Coating

Lamination and slitting

Packaging

Sterilization

Page 12 of 17

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	 	 	 	 
	 	Design Project:	 	Acticoat Burn Dressing	 
	 	Design Version:	 	2.0	 
	 	 	Design History File:	 	11032 / 1600

Figure
1: Package Label for Product size 4”x4”

Page 14 of 17

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	 	 	 	 
	 	Design Project:	 	Acticoat Burn Dressing	 
	 	Design Version:	 	2.0	 
	 	 	Design History File:	 	11032 / 1600

Figure
2: Box Label for Product size 4”x 4”

Page 15 of 17

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	 	 	 	 
	 	Design Project:	 	Acticoat Burn Dressing	 
	 	Design Version:	 	2.0	 
	 	 	Design History File:	 	11032 / 1600

Figure
3: Case Label for Product size 4”x4”

Page 16 of 17

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	 	 	 	 
	 	Design Project:	 	Acticoat Burn Dressing	 
	 	Design Version:	 	2.0	 
	 	 	Design History File:	 	11032 / 1600

Figure 4: Product Insert

Page 17 of 17

 

 

SCHEDULE
D

	 	 	 
	 

	 	to a Supply Agreement made effective as of May 8, 2001 among
	 

	 	Westaim Biomedical Corp, Smith & Nephew Inc, Smith &
	 

	 	Nephew, Inc. and T. I. Smith & Nephew Limited

ACTICOAT ABSORBENT DRESSING PRODUCT SPECIFICATIONS

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	 	 	 	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	 	Design Version Number:	 	2.1

1. DESIGN DESCRIPTION

	1.0	 	SUMMARY

This specification is for a product line extension to the Acticoat® Silver Coated
Antimicrobial Barrier (Acticoat Burn Dressing), that is intended to provide superior
performance by extending the possible duration of use to seven days by the addition of one
layer of silver coated Delnet and one Sontara absorbent layer. Two product sizes will be
produced: 4” x 5” (Part #: 20141 D, B) and 6” x 6” (Part #: 20241 D, B)

	1.1	 	THEORY OF OPERATION OF THE PROPOSED DESIGN

	 	•	 	To provide seven days of usable antimicrobial performance, more silver and/or
more
absorbency will be required than that in the Acticoat Burn Dressing. The increased
silver
will be provided by the addition of a third layer of silver-coated Delnet. The
additional
absorbency will be provided by the addition of a second layer of Sontara.
	 
	 	•	 	The dressing will provide antimicrobial activity through a sustained release of
silver, which
will minimize bacterial penetration to the wound and within the dressing.
	 
	 	•	 	To maintain a moist wound environment an appropriate secondary dressing may be
necessary to limit moisture evaporation.

	1.2	 	DRAWINGS/SCHEMATICS (REFERENCE APPLICABLE ATTACHMENTS)

     Figure
1: Pouch Label for Product size 4” x 5”

     Figure
2: Pouch Label for Product size 6” x 6”

     Figure
3: Box Label for Product size 4” x 5”

     Figure
4: Box Label for Product size 6” x 6”

     Figure
5: Product Insert

	1.3	 	MATERIALS OF CONSTRUCTION

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	 	 	 	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	 	Design Version Number:	 	2.1

	 	1.3.1	 	No new materials of construction will be required for the Acticoat 7 Dressing. The
dressing
will be constructed of two layers of Sontara Style 8411 (Part #A2000) and three layers of
silver coated Delnet (Part #B0010)
	 
	 	1.3.2	 	Vendor/Supplier, Vendor P/N

All material should be purchased and received according to approved specifications and
procedures listed in QSI.
	 
	 	1.3.3	 	Rare or Single-Source Materials

None
	 
	 	1.3.4	 	Special Vendor Contract Requirement

No additional vendor contracts are required for this product.

	1.4	 	PACKAGING

	 	1.4.1	 	PACKAGING CONFIGURATIONS

The product will be produced in two sizes:
 4” x 5” and 6” x 6” that will be packaged in
peelable pouches 6” x 8 1⁄2” and 8 ” x 10” respectively. The pouches will be packaged 5
per box and the boxes will be contained in plain cardboard cases. Case quantities of
Acticoat 7 will not be a designated SKU.

	 	1.4.2	 	PACKAGING MATERIALS

     A. PRIMARY PACKAGING (POUCH)

	 	 	 	 	 	 	 	 	 
	 

	 	Part number:
	 	4” x 5”
	 	     Front: A3070
	 	Back: A3000
	 

	 	 	 	6” x 6”
	 	     Front: A3071
	 	Back: A3006
	 
	 	 	 	 	 	 	 	 
	 	 	Composition:	 	Front:	 	Tyvek 1073B (Spunbonded polyolefin) coated with SBP 2000 and printed.
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	Back:	 	Tyvek 1073B (Spunbonded polyolefin) uncoated and imprinted.
	 
	 	 	 	 	 	 	 	 
	 	 	Basis Weight:	 	2.57 ± 0.21 oz./sq. yd. (8.71 ± 0.71 mg/cm2)
	 
	 	 	 	 	 	 	 	 
	 	 	Roll Widths:	 	6” ± 0.25” or 8” ± 0.25”
	 
	 	 	 	 	 	 	 	 
	 	 	Appearance:	 	Clean, white, and no wrinkles or tears.
	 
	 	 	 	 	 	 	 	 
	 	 	Printing:	 	The images shown in Figures 1 or 2 are printed on the uncoated side of
the Tyvek. The printed side should be on the outside of the roll with
the top of the label facing the leader end of the roll.
	 
	 	 	 	 	 	 	 	 
	 	 	Colours: The Pantone colours used for printing are as follows:

Page 2 of 21

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	 	 	 	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	 	Design Version Number:	 	2.1	 

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Yellow
	 	123	 	 
	 

	 	 	 	 	 	Blue
	 	286	 	 
	 

	 	 	 	 	 	Grey
	 	Cool Grey 6

	 

	 	 	 	 	 	Black	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	          Certification:	 	Technical specifications must be certified for each lot of Tyvek
packaging. Supplier quality documentation that includes composition, product type,
part identification (lot number), and quantity shipped must accompany each shipment.
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	B. OUTER PACKAGING (BOX)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	          Part number:	 	4” x 5”: A4070 6” x 6”: A4071
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	          Composition:	 	Cardboard, solid bleached sulphite (0.020 SBS) with a 0.5 mil poly coated
backside.
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	          Printing:	 	Printed with images shown in Figure 3 or 4;
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	          Colours:	 	The Pantone colours used for printing are as follows:
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Yellow
	 	123	 	 
	 

	 	 	 	 	 	Blue
	 	286	 	 
	 

	 	 	 	 	 	Grey
	 	Cool Grey 6

	 

	 	 	 	 	 	Black	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	          Appearance:	 	White, no wrinkles, straight folds, side glued with tuck ends.
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	C. OUTER PACKAGING (CASE)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	          Part number:	 	4” x 5”: A4101 6” x 6”: A4102
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	          Composition:	 	Corrugated case Kraft 175B, silver, outside regular adhesive.
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	          Printing:
	 	None;	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	          Appearance:	 	White exterior, no wrinkles, straight folds, side glued with tuck ends.
	 	 	 	 	Note : These are the same imprinted cases used for the Acticoat Burn Dressing.
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	D. PRODUCT INSERT	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	          Part number:
	 	A5006	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	          Composition:	 	Hammermill Bond/wr 24 lb., white paper
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	          Dimensions:	 	8.5” x 11” (21.6 cm x 28 cm) folded into 3 sections, with the English side
facing out, to make 8.5” x 3.67”
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	          Printing:	 	The label is printed with in 6 languages as shown in Figure 5.

Page 3 of 21

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS

	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	Design Version Number:	 	2.1	 

	 	 	 	 	 	 	 
	               Colours: The Pantone colours used for printing are as follows:
	 
	 	 	 	 	 	 
	 

	 	Yellow
	 	123	 	 
	 

	 	Blue
	 	286	 	 
	 

	 	Grey
	 	38% Screen of Black

	 

	 	Black	 	 	 	 
	 
	 	 	 	 	 	 
	               Appearance:	 	Clean, white, and no wrinkles or tears.

Page 4 of 21

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	Design Version Number:	 	2.1	 

	1.4.3	 	PACKAGING SPECIFICATIONS

	 	 	 	 	 	 	 
	    A. PRIMARY PACKAGING (POUCH)
	 
	 	 	 	 	 	 
	          Contents:	 	Peelable pouch with chevron seal, each containing one dressing.
	 
	 	 	 	 	 	 
	          Dimensions:	 	For 4” x 5” product:	 	153 mm x 216 mm (6” x 81/2”)
	 
	 	 	 	 	 	 
	 	 	For 6” x 6” product:	 	203 mm x 260 mm (8” x 10”)
	 
	 	 	 	 	 	 
	 	 	Size tolerance ± 6.35 mm (± 0.25”)
	 
	 	 	 	 	 	 
	          Label:	 	The label appearance is acceptable as per WB-10-02-03 if the following
criteria are met:
	 
	 	 	 	 	 	 
	 	 	a)	 	the label is centered on the package;
	 	 	b)	 	the lot and expiry date
stamps are straight and in the bottom left corner;
	 	 	c)	 	the printing is readable; and
	 	 	d)	 	the label matches the dressing in the package.
	 
	 	 	 	 	 	 
	          Seal:	 	The seal size and position, as per WB-10-02-04, is acceptable if the
following criteria are met:
	 
	 	 	 	 	 	 
	 	 	a)	 	the seal is at least 7 mm wide, within 7 mm
from the side edge and within 10 mm from the bottom edge; and
	 	 	b)	 	the Chevron seal is at the top of the label.
	 
	 	 	 	 	 	 
	          Seal Integrity:	 	A continuous seal with no bubbles, blisters or other
inconsistencies as per WB-10-02-06 and WB-10-02-02.
	 
	 	 	 	 	 	 
	 	 	If channels are observed during the dye penetration test, a minimum seal
width of 7 mm must be maintained to accept the results.
	 
	 	 	 	 	 	 
	          Seal Strength:	 	All package pouches will have a burst test pressure of at least
1.0 psig as per WB-10-02-05.
	 
	 	 	 	 	 	 
	    B. OUTER PACKAGING (BOX)
	 
	 	 	 	 	 	 
	          Box style:	 	Notched reverse tuck end (French) carton.
	 
	 	 	 	 	 	 
	          Contents:

	 	Each
	 	box contains 5 dressings.	 	 
	 
	 	 	 	 	 	 
	 	 	Pouches shall be oriented with the label facing up towards the opening of
the box and with the label oriented in the same direction as the box label.

Page 5 of 21

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	Design Version Number:	 	2.1	 

	 	 	 	 	 	 	 
	 	 	Dimensions:	 	For 4” x 5” product:
	 

	 	 	 	 	 	155 mm x 219 mm x 19 mm
(6 1/8”
x 8 5/8” x 0.75”)
	 	 	 	 	For 6” x 6” product:
	 

	 	 	 	 	 	206 mm x 257 mm x 19 mm
(8 1/8”
x 10 1/8” x 0.75”)
	 	 	Inserts:	 	Each box contains one product insert.
	 
	 	 	 	 	 	 
	 	 	Labeling:	 	Each box shall be labeled with a product code and size and lot/expiry
date as defined on the Boxing and Casing Operating Specification.
	 
	 	 	 	 	 	 
	 	 	 	 	One label is affixed to the bottom end of each box.
	 
	     C. OUTER PACKAGING (CASE)

	 	 	 	 	 	 	 
	 

	 	Dimensions:
	 	For 4” x 5” product:
	 	318 mm x 165 mm x 559 mm
	 

	 	 	 	 	 	(121/2” x 61/2” x 22”)
	 
	 	 	 	 	 	 
	 

	 	 	 	For 6” x 6” product:
	 	318 mm x 267 mm x 559 mm
	 

	 	 	 	 	 	(121/2” x l01/2“x 22”)
	 
	 	 	 	 	 	 
	 	 	 	 	Size tolerance ± 6.35 mm (± 0.25”)

	 	 	 	 	 
	1.5      STERILIZATION
	 
	 	 	 	 
	     1.5.1

	 	Sterilization Method:
	 	Gamma irradiation
	 
	 	 	 	 
	     1.5.2

	 	Sterilization Verification:
	 	Validation testing to achieve a SAL of 10-6.
	 
	 	 	 	 
	     1.5.3

	 	Sterilization Special Concerns:
	 	Gamma irradiation should not exceed 50 kGy for a single dose or 75 kGy for a total dose.

2. FUNCTIONAL ASPECTS OF DESIGN

	2.1	 	PHYSICAL CHARACTERISTICS

	 	2.1.1	 	Construction:

Five-ply dressing consisting of two pieces of Sontara ultrasonically laminated between
three pieces of silver coated high density polyethylene net.

Page 6 of 21

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	Design Version Number:	 	2.1	 

	 	 	¬   Silver-coated HDPE net	 	 	 

Page 7 of 21

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	Design Version Number:	 	2.1	 

	2.1.2	 	Size:

          The size, as per WB-10-02-07, is acceptable if the sample falls within the dimensions below:

	 	 	 	 	 
	Package Size (on label)	 	Dressing	 	Dressing
	Width x Length	 	Width Dimensions	 	Length Dimensions
	4”
x 5”

	 	9.7 cm— 11.4 cm
	 	12.2 cm —13.9 cm
	(10 cm x 12 cm)
	 	 	 	 
	 
	 	 	 	 
	6”
x 6”

	 	14.7cm— 16.4cm
	 	14.7 cm— 16.4 cm
	(15 cm x 15 cm)
	 	 	 	 

	2.1.3	 	Appearance

	 	2.1.3.1	 	The appearance, as per WB-10-02-08, of the sample is acceptable if the following
criteria are met:

	 	a)	 	bluish side facing out on one side (top) and in on the other
side (bottom) of the
laminated dressing;
	 
	 	b)	 	top side demonstrates a uniform color (if the uniformity of the
blue side is in
question, it must show the equivalent distance between 2 CIE data points on the
ellipse is less than or equal to 0.09, as per WB-10-02-15).
	 
	 	c)	 	both sides show no strong stripes, color fading, patches or
other discoloration
that do not meet the specifications defined in 2.1.4.
	 
	 	d)	 	uniform pattern of attachment points with no more than three
adjacent
attachment points missing, and all three layers securely attached;
	 
	 	e)	 	clean-cut edges;
	 
	 	f)	 	no melted or burnt patches, rips or tears; and
	 
	 	g)	 	pitting sizes of 1/16” or less; or pitting sizes between 1/16”
and 3/16” if the
number of occurrences is £ 3.

	 	2.1.3.2	 	Due to the subjective nature of assessing appearance conformity, the following applies:

	 	a)	 	verify conformance to the stated specification;
	 
	 	b)	 	compare the sample to work standards when possible;
	 
	 	c)	 	if the observations are questionable the Quality Systems
Manager will assess
conformance to the specification;
	 
	 	d)	 	if the product does not meet predefined requirements, reject the sample; and
	 
	 	e)	 	if it is unclear whether the product meets the requirements,
reject the sample
and convene an MRB as per WB-13-01.

	2.1.4	 	Colour: Due to the difficulty of measuring the product colour by the Minolta
instrument,
the criteria for acceptability of colour will be determined by reference to colour standards
as
per WB-10-02-31. The product colour must meet the requirements in the Quality
Assurance Colour Standard, Revision 1, August 16, 2000.

Page 8 of 21

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	Design Version Number:	 	2.1	 

Page 9 of 21

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	Design Version Number:	 	2.1	 

	 	2.1.5	 	Lamination Strength

	 	2.1.5.1	 	The lamination of the sample, as per WB-10-02-10, is acceptable if each layer
is securely joined.

	2.2	 	KNOWN LIMITATIONS (CAUTIONS)

	 	•	 	For external use only;
	 
	 	•	 	Should not be used on patients with a known sensitivity to
silver;
	 
	 	•	 	May cause transient discoloration;
	 
	 	•	 	Not compatible with oil-based products, such as petrolatum;
	 
	 	•	 	Not compatible with MRI (Magnetic Resonance Imaging) procedures;
	 
	 	•	 	Should not come in contact with electrodes or conductive gels during electronic
measurements;
	 
	 	•	 	Avoid exposure to temperatures above 120°F (50°C); and
	 
	 	•	 	Do not use if the product colour is not uniform.
	 
	 	•	 	Do not use if package is damaged.
	 
	 	•	 	Single use only. Do not re-sterilize.

	2.3	 	PARAMETERS OF OPERATION

	 	•	 	Achieves at least a 4.0 log reduction of Pseudomonas aeruginosa in 30 minutes
according
to procedure WB-10-03-03;
	 
	 	•	 	Maintains antimicrobial activity by demonstrating 12 days plate to plate CZOI
efficacy
against Pseudomonas aeruginosa and Staphylococcus aureus using procedure WB-10-
03-04;
	 
	 	•	 	Has an absorbent capacity of at least 7.8 g of water/g of dressing according to
procedure
WB-10-03-11
	 
	 	•	 	Does not lose silver when subjected to an adhesion test, procedure WB-10-03-08
and an
abrasion test, procedure WB-10-03-09;

	2.4	 	EQUIPMENT/MATERIALS REQUIRED FOR USE OF THE DEVICE

	 	•	 	Scissors;
	 
	 	•	 	Appropriate secondary dressing;
	 
	 	•	 	Adhesive tape or other attachment products; and
	 
	 	•	 	Water or aqueous gels.

	2.5	 	DIRECTIONS FOR USE

	 	•	 	Remove ActicoatTM 7 Day Antimicrobial Dressing from the package;

Page 10 of 21

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	Design Version Number:	 	2.1	 

	 	•	 	Moisten the dressing with sterile water (do not use saline) and cut to shape if
necessary;
	 
	 	•	 	Apply the dressing to the wound so that the blue side faces the wound and
secure with an
appropriate secondary dressing that will maintain a moist environment;
	 
	 	•	 	Keep the dressing moist, but not so wet that tissue maceration occurs;
	 
	 	•	 	Change the dressing depending on the amount of exudate and the condition of the wound;
	 
	 	•	 	If the dressing dries and adheres to the wound, moisten or soak the dressing
prior to
removal;
	 
	 	•	 	Avoid forceful removal and disruption of the healing wound.

	2.6	 	HANDLING AND STORAGE REQUIREMENTS

	 	•	 	The shelf life will be 30 months.
	 
	 	•	 	Maximum exposure temperature: 50°C.

3. MANUFACTURING/QC METHODS

	3.1	 	PROPOSED KEY PROCESSES (IDENTIFICATION AND DESCRIPTION OF CONTROLS)

The
coating of silver onto HDPE net will be carried out using the same process used for
existing products. The silver coated HDPE net used will be identical to that used for the
production of Acticoat Burn Dressing (i.e. Part # B0010).

The
lamination of the silver coated HDPE net to the Sontara will be performed using the
ultrasonic lamination station of the TMLM.

Sterilization of pouches will be conducted by an approved contractor. Packing of pouches
into boxes and cases will be carried out after sterilization.

Page 11 of 21

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	Design Version Number:	 	2.1	 

	3.2	 	ENVIRONMENTAL REQUIREMENTS FOR MANUFACTURE

Lamination and pouching will be performed in a controlled environment room.

	3.3	 	APPLICABLE QUALITY CONTROL STANDARDS

The product will be manufactured in accordance with the quality practices specified in the
following documents:

	 	•	 	EN 46001:1996 Quality Systems — Medical Devices — Particular Requirements for
the
Application of EN29001
	 
	 	•	 	ISO 13485:1996, Quality Systems — Medical Devices — Particular Requirements for the
Application of ISO 9001
	 
	 	•	 	Quality System Regulations specified in the Current Good Manufacturing Practices
(CGMP) for medical devices; 21 CFR part 820

	3.4	 	PROPOSED QUALITY CONTROL TESTING / TEST REQUIREMENTS

	 	3.4.1	 	Raw Materials Testing:

Raw materials should be receiving and tested as per existing QSI procedures
and specifications.

	 	3.4.2	 	Finished Device Testing:

The finished product must have the following performance characteristics:

	 	 	 	 	 
	Characteristic	 	Procedure	 	Specification
	Size

	 	WB-10-02-07
	 	As section 2. 1. 2
	Appearance

	 	WB-10-02-08
	 	As section 2. 1. 3
	Colour

	 	WB-10-02-31
	 	As per colour standard
	Total Silver

	 	WB- 10-02-14
	 	1.26-2.01 mg/cm2
	NH4OH soluble silver

	 	WB-10-02-14
	 	344% of the Total Silver at the time of release
	NH4OH soluble silver

	 	WB-10-02-14
	 	335% of the Total Silver when tested 30 months after manufacture
	Pouch label appearance

	 	WB-10-02-03
	 	As per section 1.4.3A
	Pouch seal size & position

	 	WB-10-02-04
	 	As per section 1.4.3A
	Pouch seal strength

	 	WB-10-02-05
	 	Burst test pressure of at least 1.0 psig

Page 12 of 21

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	Design Version Number:	 	2.1	 

Page 13 of 21

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	Design Version Number:	 	2.1	 

	 	 	 	 	 
	Pouch seal integrity

	 	WB-10-02-02

WB-10-02-06
	 	There shall be a continuous seal

with no bubbles, blisters or

other inconsistencies

	3.5	 	EQUIPMENT TO BE VALIDATED:
	 
	 	 	               NONE

	3.6	 	PROCESSES TO BE VALIDATED:
	 
	 	 	               Lamination, slitting, packaging, sterilization

	4.0	 	SHELF LIFE

Minimum remaining shelf life: 24 months.

	5.0	 	APPROVAL

	 	 	 	 	 	 	 
	Department	 	Name/Signature	 	Title	 	Date
	Project Leader
	 	 	 	 	 	 
	Marketing
	 	 	 	 	 	 
	Science and
Technology
	 	 	 	 	 	 
	Manufacturing
	 	 	 	 	 	 
	Quality Assurance
	 	 	 	 	 	 
	Regulatory Affairs
	 	 	 	 	 	 

Page 14 of 21

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	Design Version Number:	 	2.1	 

Figure
1: Pouch Label for Product size 4” x 5”

Page 15 of 21

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	Design Version Number:	 	2.1	 

Figure
2: Pouch Label for Product size 6” x 6”

Page 16 of 21

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	Design Version Number:	 	2.1	 

Figure
3: Box Label for Product size 4” x 5”

Page 17 of 21

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	Design Version Number:	 	2.1	 

Figure
4: Box Label for Product size 6” x 6”

Page 18 of 21

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	Design Version Number:	 	2.1	 

Figure 5: Product Insert (Page 1 of 2)

Page 19 of 21

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	Design Version Number:	 	2.1	 

Figure 5: Product Insert (Page 2 of 2)

Page 20 of 21

 

 

	 	 	 	 	 	 
		 	             PRODUCT SPECIFICATIONS
	 
	 	Design Project:	 	Acticoat 7 Dressing	 
	 	DHF#:	 	1999	 
	 	Design Version Number:	 	2.1	 

Page 21 of 21

 

 

SCHEDULE
E

	 	 	 
	 

	 	to a Supply Agreement made effective as of May 8, 2001

among Westaim Biomedical Corp., Smith & Nephew

Inc., Smith & Nephew, Inc. and T.J. Smith & Nephew

Limited

EQUIPMENT

	1.	 	Roll Coater:

The Roll Coater, designed and assembled in house, consists of a 3,400 cu. Ft. vacuum
chamber, 4 rough vacuum pumping trains, 2 high vacuum pumping trains, a polycold pumping
unit, 6 web handling modules, 5 magnetron banks, a closed loop cooling water system,
magnetron power supplies, a web handling control unit and PLC and MMI software and
hardware.

	2.	 	Laminating Machine:

The Laminating and Slitting Machine, manufactured by Chase Machine and Engineering
Inc., consisting of a Single Position Unwind module, Triple Position Unwind module,
Ultrasonic Embosser/Slitting module, Dual Position Rewind module, control station and trim
removal system.

	3.	 	Packaging Machine:

The Four Side Seal Packing machine, manufactured by Compliance Packaging Inc.,
consisting of input and output conveyors, package and pad cutting knife stations, a heat
seal station, PLC and MMI software and hardware and dual position unwind module
(manufactured by Circle Packaging Inc.)

Packaging Machine

Model No: CP-H12-P1S-TS

S/N 121

Dual Position Unwind Module

S/N 9003.826exv10w10

 

Exhibit 10.10

MANUFACTURING TECHNOLOGY ESCROW AGREEMENT

          This Agreement dated as of May 8, 2001

     AMONG:

	 	 	 	 	 
	 

	 	SMITH & NEPHEW INC.,	 	 
	 

	 	SMITH & NEPHEW, INC., and	 	 
	 

	 	T.J. SMITH & NEPHEW LIMITED	 	 
	 

	 	(collectively, the “User”)	 	 
	 

	 	 	 	OF THE FIRST PART
	 
	 	 	 	 
	 

	 	-and -	 	 
	 
	 	 	 	 
	 

	 	WESTAIM BIOMEDICAL CORP., and	 	 
	 

	 	WESTAIM BIOMEDICAL INC.,	 	 
	 

	 	(collectively, the “Developer”)	 	 
	 

	 	 	 	OF THE SECOND PART
	 
	 	 	 	 
	 

	 	- and -	 	 
	 
	 	 	 	 
	 

	 	MONTREAL TRUST COMPANY OF CANADA,	 	 
	 

	 	a trust company incorporated under	 	 
	 

	 	the laws of Canada (the “Escrow Agent”)	 	 
	 

	 	 	 	OF THE THIRD PART

WHEREAS:

	A.	 	The Developer has developed and is continuing to develop and enhance certain unpatented
proprietary technology and know-how relating to the manufacture of the Products (as defined
herein) (the “Manufacturing Technology”), the manufacture and supply (exclusively within the
Field (as defined herein)) and use of such Products having been contracted by the Developer
to
the User pursuant to the terms and conditions of a supply agreement of even date herewith
(the
“Supply Agreement”), a copy of which is attached as Schedule “A” hereto;
	 
	B.	 	The Manufacturing Technology is evidenced by certain present and future documentation and
manuals which set out and describe all manufacturing processes and procedures comprising the
Manufacturing Technology in respect of each Product, whether stored on written, magnetic or
optical media, which shall be complete and accurate and sufficient to permit a person
reasonably
skilled in the art to be able to implement the manufacturing of the Products with the
Equipment,
as the same may be modified, supplemented or amended from time to
time (the “Manuals”); and
	 
	C.	 	The Developer has agreed with the User to deposit the Manuals relating to the Manufacturing
Technology with the Escrow Agent to be held as hereinafter set forth.

NOW THEREFORE in consideration of the mutual covenants and promises contained herein, the parties
hereto agree as follows:

 

- 2 -

	1.	 	Definitions
	 
	 	 	In this Agreement, terms and expressions defined in the descriptions of the parties, in the
recitals or the body hereof shall have those meanings herein, and:

	 	(a)	 	“Agreement” means this escrow agreement together with all Schedules attached hereto;
	 
	 	(b)	 	“Equipment” has the meaning ascribed thereto in the Supply Agreement;
	 
	 	(c)	 	“Event of Default” has the meaning ascribed thereto in the Security Trust Agreement;
	 
	 	(d)	 	“Release Event” means any event entitling the User to practice its
Manufacturing
License as contemplated under the Supply Agreement or any Event of Default;
	 
	 	(e)	 	“Escrowed Materials” means the Manuals relating to the Manufacturing
Technology,
and all related documentation and records, in whatsoever form, including all
corrections,
modifications, enhancements and improvements from time to time made by the
Developer and deposited with the Escrow Agent as Revisions;
	 
	 	(f)	 	“Field” has the meaning ascribed thereto in the Supply Agreement;
	 
	 	(g)	 	“License and Development Agreement” has the meaning ascribed thereto in the
Supply
Agreement;
	 
	 	(h)	 	“Manufacturing License” has the meaning ascribed thereto in the Supply Agreement;
	 
	 	(i)	 	“Products” has the meaning ascribed thereto in the Supply Agreement;
	 
	 	(j)	 	“Revisions ” means any corrections, revisions, updates or enhancements made
by the Developer to the Manufacturing Technology or the Manuals from time to time;
and
	 
	 	(k)	 	“Security Trust Agreement” means the Security Trust Agreement dated as of May
8, 2001 between Westaim Biomedical Corp. and Montreal Trust Company of Canada, as
security trustee.

	2.	 	License and Deposit of Escrowed Materials
	 
	2.1	 	The Developer hereby grants to the User a license to use the Escrowed Materials, as and when
the
same are released from escrow pursuant to Section 4.1 of this Agreement, for the sole purpose of
enabling the User to make or have made such Products for sale by the User under the terms and
conditions of a License and Development Agreement of even date herewith between the
Developer and the User; provided that the User shall not be entitled to, and the User covenants
that it will not, dispose of any interest in the Escrowed Materials to any person without first
having obtained the prior written consent of the Developer. For that purpose, any consent given
by the Developer under the Supply Agreement shall be deemed to be consent given by the
Developer under this Agreement.
	 
	2.2	 	Within ten (10) business days of the execution of this Agreement by all parties, the Developer
shall deposit the Escrowed Materials with the Escrow Agent to be held by the Escrow Agent in
trust for the benefit of the User pursuant to the terms of this Agreement. Concurrent with the

 

- 3 -

	 	 	making of such deposit, the Developer shall deliver to the User a certificate of an
officer who by his or her position will have knowledge stating that copies of all Manuals
relating to the Manufacturing Technology in its possession or control have been deposited
with the Escrow Agent as Escrowed Materials and that the Escrowed Materials are complete
and accurate and sufficient to permit a person reasonably skilled in the art to be able to
implement the manufacture of the Products with the Equipment. The Developer shall deliver a
certificate of an officer who by his or her position will have knowledge to the User
annually upon the anniversary of this Agreement becoming effective restating the same.
	 
	2.3	 	In the event the Developer makes any Revisions to the Manufacturing Technology or the
Manuals, the Developer shall promptly, and in any event, within thirty (30) business days of
the
release to any of its customers of each of such Revisions, deposit with the Escrow Agent
documentary materials evidencing such Revisions, and the Developer shall concurrently
provide
notice of same to the User together with an updated certification as contemplated by Section
2.2.
	 
	2.4	 	Promptly upon its receipt of any Escrowed Materials, the Escrow Agent shall place the
Escrowed
Materials so deposited in document envelopes, sealed and initialed, which envelopes will then be
placed in dual custody in a fireproof chest in the hands of the Escrow Agent’s security custodians
in its Administration Department. The Escrow Agent shall notify the User and the Developer of
the location of such facility and shall thereafter notify the User and the Developer in writing prior
to any change in such location. The Escrow Agent has no duty to exercise in the custody and care
of the Escrowed Materials a higher standard than that required for other contents of the vault or
safety deposit box or other place of safekeeping chosen by the Escrow Agent for the storage of
the Escrowed Materials, and shall not be responsible for any deterioration of the Escrowed
Materials through the lack of controlled environmental conditions for storage, shelf life of the
media used or any other deterioration of its quality, or unless such deterioration results from the
gross negligence or willful misconduct of the Escrow Agent.
	 
	2.5	 	The Escrow Agent shall acknowledge its receipt of each deposit of Escrowed Materials by
confirmation in writing to each of the User and the Developer within fourteen (14) days of
each
such deposit.
	 
	2.6	 	The Developer will replace any and all Escrowed Materials in the event of any loss or damage
to
the Escrowed Materials held by the Escrow Agent.
	 
	2.7	 	The Developer hereby represents, warrants and covenants in favour of the User that the
Escrowed
Materials are and shall continue to be complete and accurate and sufficient to permit a
person
reasonably skilled in the art to implement the manufacture of the Products with the
Equipment.
	 
	3.	 	Term of Agreement
	 
	 	 	This Agreement shall commence upon its execution by the last of the parties to sign and
shall terminate only upon the earlier to occur of:

	 	(a)	 	the date on which the Escrow Agent delivers the Escrowed Materials to the User
in
accordance with the provisions of this Agreement,
	 
	 	(b)	 	the date on which the User elects to terminate this Agreement pursuant to
Section 20.5 hereof; or

 

- 4 -

	 	(c)	 	upon the joint notice of the User and Developer that the Supply Agreement
has expired or terminated.

	4.	 	Release From Escrow
	 
	4.1	 	Upon the occurrence of a Release Event, and upon the expiry of any relevant cure periods
contemplated by the Supply Agreement and/or the Security Trust Agreement and subject to
Section 5.4 of the Security Trust Agreement (where the Release Event is an Event Default), if the
User delivers to the Escrow Agent and Developer a statutory declaration sworn by a senior officer
of the User setting forth the particulars of a Release Event (the
“Release Notice”), the Escrow
Agent shall, subject to Section 4.2, deliver the Escrowed Materials to the User in accordance with
any delivery instructions specified by the User.
	 
	4.2	 	Without in any way extending any cure period provided for in the Supply Agreement or the
Security Trust Agreement, the Developer shall have ten (10) days from the date it receives a
Release Notice to deliver to the Escrow Agent and the User a notice
(the “Objection Notice”) stating that no such Release Event has occurred, or any such Release Event has been remedied or
cured. The Objection Notice shall take the form of a statutory declaration and describe the
circumstances pursuant to which there is no such Release Event, or any such Release Event has
been remedied or cured, to which shall be attached true and complete copies of all relevant
documents establishing or confirming the same.
	 
	4.3	 	Subject to Section 4.4, if there is any dispute between the User and the Developer as to whether
any such Release Event has occurred or has been remedied, such dispute shall be resolved in
accordance with the dispute resolution provisions of the Supply Agreement.
	 
	4.4	 	To the extent that the Developer has not responded to the Release Notice within the time set
forth
in Section 4.2 hereof, then the Escrow Agent shall deliver the Escrowed Materials to the
User
notwithstanding the dispute resolution provisions of the Supply Agreement.
	 
	4.5	 	The Escrow Agent shall have no duty to inquire into the due authorization, execution or
delivery
of any Release Notice or Objection Notice, or the accuracy, veracity, validity or sufficiency of
any statement, fact or circumstance set out in or referred to in any such notice.
	 
	4.6	 	Upon the Escrow Agent receiving written notice of termination of the Supply Agreement,
provided that no Event of Default has occurred, the Escrow Agent shall within a period of
ten
(10) days thereafter release to the Developer all Escrowed Materials then in its possession,
and
the Escrow Agent shall then be discharged from all of its obligations under this Agreement.
	 
	4.7	 	If, during the period that the Escrow Agent has custody of the Escrowed Materials, any loss or
damage to the Developer’s copies of the Escrowed Materials should occur, the Developer shall
have the right to access the Escrowed Materials during business hours of the Escrow Agent
for
the purpose of reproducing and copying the same for the Developer’s records.
	 
	5.	 	Verification of Escrowed Materials
	 
	 	 	The User shall have the right, from time to time but not more frequently than once
with respect to each deposit with the Escrow Agent made by the Developer pursuant to
Sections 2.2, 2.3 and 2.6

 

- 5 -

	 	 	hereof, to request the Developer to verify that the Escrowed Materials then on
deposit are complete and otherwise satisfy the requirements of Sections 2.2 and 2.7
hereof.
	 
	6.	 	Indemnification of Escrow Agent
	 
	 	 	The Escrow Agent shall not, by reason of its execution of this Agreement, assume any
responsibility or liability for any transactions between the User and the Developer other
than for the performance of its obligations with respect to the Escrowed Materials in
accordance with this Agreement. Without limiting any protection or indemnity of the Escrow
Agent under any other provision hereof, or otherwise at law, each of the User and the
Developer hereby agrees to indemnify and hold harmless the Escrow Agent from and against
any and all liabilities, losses, damages, penalties, claims, actions, suits, costs,
expenses and disbursements, including legal or advisor fees and disbursements, of whatever
kind and nature which may at any time be imposed on, incurred or asserted against the
Escrow Agent in connection with the performance of its duties and obligations hereunder,
other than such liabilities, losses, damages, penalties, claims, actions, suits, costs,
expenses and disbursements arising by reason of the negligence, willful misconduct or bad
faith of the Escrow Agent. This provision shall survive the resignation or removal of the
Escrow Agent or the termination of this Agreement.
	 
	7.	 	Non-Disclosure by Escrow Agent or User
	 
	 	 	Except as provided in this Agreement, the Escrow Agent and the User each agree not
to disclose or otherwise make available to any third person whatsoever, or make any use
whatsoever or copy the Escrowed Materials, without the prior written consent of the
Developer or an order of a court of competent jurisdiction compelling the disclosure of the
Escrowed Materials.
	 
	8.	 	Compensation of Escrow Agent
	 
	 	 	The fees of the Escrow Agent in relation to its duties hereunder shall be payable by
both the User and Developer (each as to 50% of such fees) and are as follows:

	 	(a)	 	an initial fee of Cdn. $10,000 for accepting deposit of the Escrowed Materials,
	 
	 	(b)	 	an annual fee of Cdn. $2,500, payable in advance, on the date of deposit of the
Escrowed
Materials for the first year and on each anniversary date thereafter during the term
of this
Agreement for each subsequent year,

	 	 	plus any disbursements and all applicable taxes, plus any fees actually incurred in
performing its duties hereunder calculated on an hourly basis at the hourly rate of the
representatives of the Escrow Agent involved in the performance of such duties. If either
the User or the Developer (the “non-paying party”) fails to pay to its proportionate share
of such fees to the Escrow Agent, then the User or the Developer, as the case may be, shall
(1) pay such proportionate share to the Escrow Agent on behalf of the non-paying party and
(2) shall have the right to set-off such proportionate share against any amounts payable by
such non-paying party to the User or the Developer, as the case may be, all in accordance
with and pursuant to the provisions of Section 3.7 of the Supply Agreement.
	 
	9.	 	Duties of Escrow Agent
	 
	 	 	The Escrow Agent undertakes to take all steps to ensure the safety and privacy of the
Escrowed Materials retained by it during the currency of this Agreement and to fulfill the
duties and responsibilities provided for herein. The Escrow Agent shall have no obligation
or liability under

 

 

- 6 -

	 	 	any other agreement to which it is not a party, notwithstanding that reference
thereto may be made herein.
	 
	10.	 	Acceptance of Duties
	 
	 	 	The Escrow Agent hereby accepts the duties in this Agreement required to be
performed by the Escrow Agent and agrees to perform the same upon the terms and conditions
set forth in this Agreement.
	 
	11.	 	No Responsibility of Escrow Agent
	 
	 	 	The Escrow Agent shall not be responsible for the sufficiency, genuineness or
validity of or title to the Escrowed Materials deposited with the Escrow Agent hereunder or
of any assignment thereof. Nor shall the Escrow Agent incur any liability or be responsible
for the consequences of any breach on the part of the User and/or the Developer of any of
the covenants herein contained or of any acts of agents or servants of the User and/or the
Developer.
	 
	12.	 	Right to Counsel
	 
	 	 	The Escrow Agent shall have the right to consult with and obtain advice from legal
counsel appointed by it, who may but need not be legal counsel for the Developer in the
event of any questions as to any of the provisions hereof or its duties hereunder and it
shall incur no liability and be fully protected in acting or not acting in good faith in
accordance with any opinion or instruction of such counsel. The cost of services shall be
added to and be part of the annual fee hereunder.
	 
	13.	 	Access by Others
	 
	 	 	The Escrow Agent shall not be responsible for any corporate personnel of Developer
having authorized access to the Escrowed Materials and causing such Escrowed Materials
during such access to be: changed, erased, added to, magnetized or any other kind of
mutilation, destruction or change being performed. Control and supervision of such
authorized access to such corporate personnel is and shall be the responsibility of the
Developer.
	 
	14.	 	Reliance
	 
	 	 	The Escrow Agent may rely upon any instrument in writing believed by the Escrow
Agent to be genuine and sufficient and properly presented in accordance with the terms of
this Agreement, including this Agreement itself, and the Escrow Agent shall not be liable
or responsible for any action taken or omitted to be taken in reliance upon the provisions
thereof. The Escrow Agent may employ or retain such counsel or other experts or advisers or
agents as it may reasonably require for the purpose of discharging its duties hereunder.
	 
	15.	 	Delivery by Escrow Agent
	 
	 	 	The Developer and the User agree that, upon delivery of the Escrowed Materials by the
Escrow Agent to either party as required by this Agreement, the Escrow Agent shall not be
responsible for the content of such materials, and any responsibility of the Escrow Agent
will be limited to delivery thereof as required by this Agreement.

 

 

- 7 -

	16.	 	Not Required to Risk Own Funds
	 
	 	 	None of the provisions herein contained shall require the Escrow Agent to expend or
to risk its own funds or otherwise to incur financial liability in the performance of any
of its duties or powers unless indemnified as aforesaid.
	 
	17.	 	Third Party Proceedings Against Escrow Agent
	 
	 	 	In case any property held by the Escrow Agent hereunder shall be attached, garnished
or levied upon under any order of a court or the delivery thereof shall be stayed or
enjoined by any order of any court or any other order, judgment or decree shall be made or
entered by any court affecting such property or any part thereof, the Escrow Agent is
hereby expressly authorized in its sole discretion to interplead or obey and comply with
all writs, orders, final judgments or decrees so entered or issued and in case the Escrow
Agent obeys and complies with any such writ, order, final judgment or decree, the Escrow
Agent shall not be liable to any of the other parties hereto, their successors, heirs or
personal representatives or to any other person, firm or corporation by reason of
interpleading or compliance.
	 
	18.	 	Replacement of Escrow Agent
	 
	 	 	The Escrow Agent may resign and be discharged from all further duties and
liabilities hereunder by giving to the User and the Developer ninety (90) days notice in
writing. In the event of the Escrow Agent resigning as aforesaid, a new escrow agent, which
shall be a Canadian chartered bank or trust company acceptable to the User and the
Developer shall be appointed by the Escrow Agent and, failing agreement between the User
and the Developer, the Escrow Agent may apply to the Court of Queen’s Bench of Alberta, on
such notice as the Court may direct, for the appointment of a new escrow agent without any
further assurance, conveyance, act or deed.
	 
	19.	 	Entire Agreement
	 
	 	 	This Agreement contains the entire agreement between the parties with respect to the
subject matter herein of this date, and supersedes all prior agreements, negotiations,
representations and proposals, written or oral, relating to its subject matter.
	 
	20.	 	Miscellaneous Provisions
	 
	20.1	 	The rights and obligations of the parties pursuant to this Agreement shall be binding
upon, and
shall enure to the benefit of the parties hereto and their respective successors and
assigns.
	 
	20.2	 	This Agreement shall be governed by and construed in accordance with the laws of the Province
of Alberta and the laws of Canada applicable therein, and the parties hereby exclusively attorn to
the jurisdiction of the courts of competent jurisdiction in the Province of Alberta located, where
available, in the Judicial Centre of Calgary.
	 
	20.3	 	In this Agreement, time is of the essence.
	 
	20.4	 	If either of the Developer or the User should assign the
Supply Agreement to an “Affiliate” (as defined in the Supply Agreement), then such assignment shall be deemed to be an assignment of
this Agreement to the same Affiliate, and any consent given by either of the Developer or the
User to the other of an assignment under the Supply Agreement shall be deemed to constitute
consent to assignment under this Agreement.

 

 

- 8 -

	20.5	 	The User and the Developer each acknowledge and agree that:

	 	(a)	 	the Escrow Agent has sold its corporate trust business and that such business
is, as of the
date of this Agreement, owned and operated by Computershare Trust Company of
Canada (“Computershare”), and
	 
	 	(b)	 	the Escrow Agent may assign this Agreement and any ancillary agreements
executed in
connection herewith, and all of its rights and obligations thereunder, to
Computershare.
Any such assignment shall be effective without the need for any further notice or
advice
to, or approval of, any other person and without any further act or formality
whatsoever.

	20.6	 	The User may elect to terminate this Agreement at any time by giving written notice to the
Developer and the Escrow Agent, provided however that the User has
paid and satisfied in full
all
fees owing to the Escrow Agent under this Agreement. In such case, the Escrow Agent shall
return all Escrowed Materials currently in its possession to the Developer, and the Escrow
Agent
shall then be discharged from all of is obligations under this Agreement.
	 
	20.7	 	For the purposes of this Agreement, the parties agree that Westaim Biomedical Corp. shall act
as
agent for all parties comprising the Developer, and that Smith & Nephew, Inc. shall act as
agent
for all parties comprising the User, for all matters under this Agreement.
	 
	21.	 	Notice
	 
	 	 	Any notice, request, demand, consent or other communication provided or permitted hereunder
shall be in writing and given by personal delivery, or sent by double registered mail, or
transmitted by telex, telegram or facsimile, addressed to the party for which it is
intended addressed as follows:

	 	 	 
	If to the User:

	 	c/o Smith & Nephew, Inc.
	 

	 	11775 Starkey Road
	 

	 	P.O. Box 1970
	 

	 	Largo, Florida 33799-1970
	 
	 	 
	 

	 	Telecopy Number: (727) 398-4206
	 

	 	Attention:       President
	 
	 	 
	 

	 	with a copy to:
	 
	 	 
	 

	 	c/o Smith & Nephew, Inc.
	 

	 	1450 Brooks Road
	 

	 	Memphis, Tennessee 38116
	 
	 	 
	 

	 	Telecopy Number: (901)396-7824
	 

	 	Attention:       General Counsel
	 
	 	 
	If to the Developer:

	 	c/o Westaim Biomedical Corp.
	 

	 	10102–114 Street
	 

	 	Fort Saskatchewan, Alberta T8L 3W4
	 
	 	 
	 

	 	Telecopy Number: (780) 992-5300
	 

	 	Attention:      President

 

 

- 9 -

	 	 	 
	 

	 	with a copy to:
	 
	 	 
	 

	 	c/o Westaim Biomedical Corp.
	 

	 	1010,144 – 4th Avenue S.W.
	 

	 	Calgary, Alberta T2P 3N4
	 
	 	 
	 

	 	Telecopy Number: (403) 237-8181
	 

	 	Attention:      President
	 
	 	 
	 

	 	and a copy to:
	 
	 	 
	 

	 	c/o Westaim Biomedical Corp.
	 

	 	One Hampton Road, Suite 302
	 

	 	Exeter, New Hampshire 03833
	 
	 	 
	 

	 	Telecopy Number: (603) 778-6393
	 

	 	Attention:      President
	 
	 	 
	If to the Escrow Agent:

	 	710, 530-8th Avenue S.W.
	 

	 	Calgary, Alberta T2P 3S8
	 
	 	 
	 

	 	Telecopy Number: (403) 267-6598
	 

	 	Attention:      Manager, Corporate Trust Department

provided, however, that any party may change its address for purposes of receipt of any such
communication by giving ten (10) days prior written notice of such change of the other party
in the manner prescribed above. Any notice so given shall be deemed to have been received on
the date on which it was delivered or transmitted by telex, telegram or facsimile or, if
double registered mail, on the date of authorized receipt.

 

 

 

- 10 -

     IN
WITNESS WHEREOF the parties hereto have executed this Agreement
as of the date first above written.

	 	 	 	 	 	 	 
	WESTAIM BIOMEDICAL CORP.	 	SMITH & NEPHEW
INC.
	 
	 	 	 	 	 	 
	Per:

	 	/s/ Scott H. Gillis
	 	Per:
	 	/s/ David A. Trollope
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Per:

	 	/s/ Barry M. Heck
	 	Per:
	 	/s/ Stephen Lang
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	WESTAIM BIOMEDICAL INC.	 	SMITH & NEPHEW, INC.
	 
	 	 	 	 	 	 
	Per:

	 	/s/ Scott H. Gillis
	 	Per:
	 	/s/ David A. Trollope
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Per:

	 	/s/ Barry M. Heck
	 	Per:
	 	/s/ Stephen Lang
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	T.J. SMITH & NEPHEW LIMITED
	 
	 	 	 	 	 	 
	 

	 	 	 	Per:	 	/s/ David A. Trollope
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Per:	 	/s/ Stephen Lang
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	MONTREAL TRUST COMPANY OF
	 	 	 	 	CANADA, in its capacity as Escrow Agent
	 
	 	 	 	 	 	 
	 

	 	 	 	Per:	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Per:	 	 
	 	 	 	 	 	 	 

 

 

SCHEDULE
“A”

SUPPLY AGREEMENT

 

 

 

     IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date first
above written.

	 	 	 	 	 	 	 
	WESTAIM BIOMEDICAL CORP.	 	SMITH & NEPHEW
INC.
	 
	 	 	 	 	 	 
	Per:

	 	 	 	Per:	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Per:

	 	 	 	Per:	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	WESTAIM BIOMEDICAL INC.	 	SMITH & NEPHEW, INC.
	 
	 	 	 	 	 	 
	Per:

	 	 	 	Per:	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Per:

	 	 	 	Per:	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	T.J. SMITH & NEPHEW LIMITED
	 
	 	 	 	 	 	 
	 

	 	 	 	Per:	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Per:	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	MONTREAL TRUST COMPANY OF
	 	 	 	 	CANADA, in its capacity as Escrow Agent
	 
	 	 	 	 	 	 
	 

	 	 	 	Per:	 	/s/ [ILLEGIBLE]
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Per:
	 	/s/ [ILLEGIBLE]

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