Document:

Exhibit 10.29.1

 

***TEXT
OMITTED AND SUBMITTED SEPARATELY

PURSUANT
TO CONFIDENTIAL TREATMENT REQUEST

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

 

 

 

ASSIGNMENT

 

AND

 

SECOND AMENDED AND RESTATED

 

PURCHASE AGREEMENT

 

FOR

 

FRACTIONATION SERVICES

AND

COMMERCIAL PRODUCTS

 

BETWEEN AND AMONGST

 

HÉMA-QUÉBEC

 

AND

 

BAYER INC.

 

BAYER HEALTHCARE LLC

 

AND

 

TALECRIS BIOTHERAPEUTICS, INC.

(F/K/A NPS BIOTHERAPEUTICS, INC.)

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
  1.

  	
  DEFINED TERMS AND INTERPRETATION

  	
  2

  
	
   

  	
  1.1

  	
  Definitions

  	
  2

  
	
   

  	
  1.2

  	
  Extended Meanings

  	
  5

  
	
   

  	
  1.3

  	
  Schedules

  	
  5

  
	
   

  	
  1.4

  	
  Time

  	
  5

  
	
   

  	
  1.5

  	
  Entire Agreement

  	
  5

  
	
   

  	
  1.6

  	
  Lead

  	
  5

  
	
   

  	
  1.7

  	
  Role of Bayer US

  	
  6

  
	
  2.

  	
  PURCHASE AND SALE OF GOODS/SERVICES

  	
  6

  
	
   

  	
  2.1

  	
  Goods and Services

  	
  6

  
	
   

  	
  2.2

  	
  Distribution of Products in Canada

  	
  6

  
	
  3.

  	
  DELIVERY OF COMMERCIAL PRODUCTS

  	
  7

  
	
   

  	
  3.1

  	
  Forecasting

  	
  7

  
	
   

  	
  3.2

  	
  Prior Forecasts to be Honored

  	
  7

  
	
   

  	
  3.3

  	
  Order for Commercial Products

  	
  7

  
	
   

  	
  3.4

  	
  Annual Volume

  	
  7

  
	
   

  	
  3.5

  	
  Delivery

  	
  8

  
	
   

  	
  3.6

  	
  Late Deliveries

  	
  8

  
	
   

  	
  3.7

  	
  Vial Size

  	
  8

  
	
   

  	
  3.8

  	
  Commercial Product Recalled, Withdrawn or Not Validly Distributed

  	
  8

  
	
   

  	
  3.9

  	
  Procedures for Alternate Sourcing

  	
  9

  
	
   

  	
  3.10

  	
  Minimum Supply Guarantee to Further Protect Canadians \

  	
  9

  
	
  4.

  	
  COMMERCIAL PRODUCTS SPECIFICATION

  	
  10

  
	
   

  	
  4.1

  	
  Commercial Product Specifications

  	
  10

  
	
   

  	
  4.2

  	
  Bayer Canada Determines Commercial Products are Unsuitable

  	
  10

  
	
   

  	
  4.3

  	
  HQ Determines Commercial Products are Unsuitable

  	
  10

  
	
   

  	
  4.4

  	
  Significant Reduction in Consumer Preference

  	
  11

  
	
  5.

  	
  FRACTIONATION SERVICES

  	
  12

  
	
   

  	
  5.1

  	
  Forecasting

  	
  12

  
	
   

  	
  5.2

  	
  Order for Fractionation Products

  	
  12

  
	
   

  	
  5.3

  	
  Prior Forecasts to be Honored

  	
  12

  
	
   

  	
  5.4

  	
  Forecasting Continued to Termination Date

  	
  12

  
	
   

  	
  5.5

  	
  Survival of Orders after Termination

  	
  12

  
	
  6.

  	
  PLASMA COLLECTION AND PROCESSING

  	
  12

  
	
   

  	
  6.1

  	
  Plasma Collection

  	
  12

  
	
   

  	
  6.2

  	
  Responsibility for Plasma in HQ’ Possession

  	
  13

  
	
   

  	
  6.3

  	
  Notice of Plasma Pickup by Bayer Canada

  	
  13

  
	
   

  	
  6.4

  	
  Pickup, Transportation and Storage of Plasma by Bayer Canada

  	
  13

  
	
   

  	
  6.5

  	
  Maximizing Transportation Efficiency

  	
  13

  
					

 

i

 

	
   

  	
  6.6

  	
  Bayer Canada Responsible for Exportation of Plasma

  	
  14

  
	
   

  	
  6.7

  	
  Shipping Documents and Exportation of Plasma

  	
  14

  
	
   

  	
  6.8

  	
  Responsibility for Plasma in Talecris’ or Bayer Canada’s Possession

  	
  14

  
	
   

  	
  6.9

  	
  Talecris to Inspect Plasma

  	
  14

  
	
   

  	
  6.10

  	
  HQ Determines Plasma Delivered to Bayer Canada is Unsuitable

  	
  15

  
	
   

  	
  6.11

  	
  Right of Talecris and Bayer Canada to Reject HQ Plasma

  	
  15

  
	
   

  	
  6.12

  	
  Plasma Rendered Unusable by Talecris or Bayer Canada

  	
  15

  
	
   

  	
  6.13

  	
  Quarterly Meetings

  	
  16

  
	
   

  	
  6.14

  	
  Change to HQ Standard Operating Procedures

  	
  16

  
	
   

  	
  6.15

  	
  Work in Process

  	
  16

  
	
  7.

  	
  DELIVERY OF FRACTIONATION PRODUCTS AND RECORDS

  	
  17

  
	
   

  	
  7.1

  	
  Delivery Schedule and Report on Status of Fractionation Product
  Delivery

  	
  17

  
	
   

  	
  7.2

  	
  Notice of Delay in Delivery of Fractionation Products

  	
  17

  
	
   

  	
  7.3

  	
  Delay in Delivery of Fractionation Products due to HQ

  	
  17

  
	
   

  	
  7.4

  	
  Records

  	
  18

  
	
  8.

  	
  DELIVERY OF PRODUCTS

  	
  18

  
	
   

  	
  8.1

  	
  Product Shelf Life

  	
  18

  
	
   

  	
  8.2

  	
  Delivery of Products

  	
  18

  
	
   

  	
  8.3

  	
  Responsibility for Products

  	
  19

  
	
   

  	
  8.4

  	
  Duty of Inspection

  	
  19

  
	
  9.

  	
  INVOICES AND PAYMENT

  	
  19

  
	
   

  	
  9.1

  	
  Invoices

  	
  19

  
	
   

  	
  9.2

  	
  Price

  	
  20

  
	
   

  	
  9.3

  	
  Price Adjustments

  	
  20

  
	
   

  	
  9.4

  	
  Payment Terms

  	
  21

  
	
   

  	
  9.5

  	
  Value added

  	
  21

  
	
   

  	
  9.6

  	
  Pricing Not Affected by Remedies

  	
  21

  
	
   

  	
  9.7

  	
  Deposit

  	
  21

  
	
  10.

  	
  REGULATORY AND QUALITY ASSURANCE MATTERS

  	
  22

  
	
   

  	
  10.1

  	
  Regulatory Condition of Supply

  	
  22

  
	
   

  	
  10.2

  	
  Improvements

  	
  23

  
	
   

  	
  10.3

  	
  Special Access Program

  	
  23

  
	
   

  	
  10.4

  	
  Communications

  	
  24

  
	
   

  	
  10.5

  	
  Talecris and Bayer Canada Information

  	
  24

  
	
   

  	
  10.6

  	
  Compliance Audit

  	
  24

  
	
  11.

  	
  PRODUCT WITHDRAWALS/RECALLS

  	
  25

  
	
   

  	
  11.1

  	
  Recall / Withdrawal

  	
  25

  
	
   

  	
  11.2

  	
  Patient Notification System

  	
  25

  
	
   

  	
  11.3

  	
  Adverse Event Reporting

  	
  25

  
	
   

  	
  11.4

  	
  Replacement Products and Replacement Fractionation Products

  	
  26

  

 

ii

 

	
  12.

  	
  REPRESENTATIONS, WARRANTIES AND INSPECTION

  	
  26

  
	
   

  	
  12.1

  	
  Representations and Warranties of the Parties

  	
  26

  
	
   

  	
  12.2

  	
  Applicable Laws and Notice of Compliance

  	
  27

  
	
   

  	
  12.3

  	
  Title and Warranty on the Products

  	
  27

  
	
   

  	
  12.4

  	
  Guaranteed Yield

  	
  28

  
	
   

  	
  12.5

  	
  Current Information

  	
  28

  
	
   

  	
  12.6

  	
  No Waiver

  	
  28

  
	
   

  	
  12.7

  	
  Survival of Representations and Warranties

  	
  28

  
	
  13.

  	
  PATENT PROTECTION

  	
  28

  
	
   

  	
  13.1

  	
  No Infringement

  	
  28

  
	
   

  	
  13.2

  	
  Infringement by a Product or Process

  	
  29

  
	
  14.

  	
  INSURANCE AND INDEMNIFICATION

  	
  29

  
	
   

  	
  14.1

  	
  Talecris’ and Bayer Canada’s Insurance

  	
  29

  
	
   

  	
  14.2

  	
  HQ Insurance

  	
  30

  
	
   

  	
  14.3

  	
  Indemnity

  	
  31

  
	
   

  	
  14.4

  	
  Approval of Counsel

  	
  32

  
	
  15.

  	
  CHANGE

  	
  32

  
	
   

  	
  15.1

  	
  Technological Change

  	
  32

  
	
   

  	
  15.2

  	
  Dispute Resolution

  	
  33

  
	
   

  	
  15.3

  	
  Intentionally Omitted

  	
  34

  
	
   

  	
  15.4

  	
  Parvovirus B19 Testing and the Change to the Caprylate/Chromatography
  Process

  	
  34

  
	
  16.

  	
  TERMINATION

  	
  34

  
	
   

  	
  16.1

  	
  Termination of Agreement

  	
  34

  
	
   

  	
  16.2

  	
  Talecris Event of Default

  	
  34

  
	
   

  	
  16.3

  	
  HQ Event of Default

  	
  35

  
	
   

  	
  16.4

  	
  Bayer Canada Event of Default

  	
  35

  
	
  17.

  	
  DISPUTE RESOLUTION

  	
  36

  
	
   

  	
  17.1

  	
  Arbitration

  	
  36

  
	
  18.

  	
  OPTION TO RENEW

  	
  37

  
	
   

  	
  18.1

  	
  Renewal

  	
  37

  
	
  19.

  	
  GENERAL

  	
  37

  
	
   

  	
  19.1

  	
  Notices

  	
  37

  
	
   

  	
  19.2

  	
  Assignment

  	
  39

  
	
   

  	
  19.3

  	
  Independent Contractors

  	
  39

  
	
   

  	
  19.4

  	
  Severability

  	
  39

  
	
   

  	
  19.5

  	
  Communication

  	
  39

  
	
   

  	
  19.6

  	
  Governing Law

  	
  39

  
	
   

  	
  19.7

  	
  Currency

  	
  39

  
	
   

  	
  19.8

  	
  Successors and Assigns

  	
  39

  

 

iii

 

	
   

  	
  19.9

  	
  Confidential Information

  	
  40

  
	
   

  	
  19.10

  	
  Pricing Information to Customers

  	
  40

  
	
   

  	
  19.11

  	
  Public Announcements

  	
  40

  
	
   

  	
  19.12

  	
  Force Majeure

  	
  40

  
	
   

  	
  19.13

  	
  Talecris and Bayer Canada jointly and severally liable

  	
  41

  
	
   

  	
  19.14

  	
  No Waiver

  	
  41

  
	
   

  	
  19.15

  	
  Counterparts

  	
  41

  
	
   

  	
  19.16

  	
  Amendment

  	
  41

  
	
   

  	
  19.17

  	
  Acknowledgement

  	
  41

  
	
  SCHEDULE “A” - COMMERCIAL PRODUCTS

  	
  43

  
	
  SCHEDULE “B” - PLASMA PICK-UP SCHEDULE

  	
  45

  
	
  SCHEDULE “C” - COMMERCIAL PRODUCT SPECIFICATIONS

  	
  46

  
	
  SCHEDULE “D” - FRACTIONATION PRODUCTS AND PRICE ADJUSTMENTS FOR
  FRACTIONATION PRODUCTS

  	
  47

  
	
  SCHEDULE “E” – HÉMA-QUÉBEC INVENTORY TARGET LEVELS

  	
  48

  
	
  SCHEDULE “F” - COLLECTION CENTRES

  	
  49

  
	
  SCHEDULE “G” - DELIVERY SCHEDULE (INTENTIONALLY OMITTED)

  	
  50

  
	
  SCHEDULE “H” - VIAL SIZES SUBSTITUTION / WASTAGE

  	
  51

  

 

iv

 

AMENDMENT AND RESTATEMENT OF PURCHASE
AGREEMENT

FOR

FRACTIONATION SERVICES AND COMMERCIAL PRODUCTS

 

THIS AGREEMENT effective as of the April 1,
2005, (hereinafter referred to as “Effective Date” is made

 

BETWEEN

 

AND AMONGST:

 

HÉMA-QUÉBEC

4045 Cote-Vertu Blvd.

Saint-Laurent, Quebec H4R 2W7

CANADA

(hereinafter referred to as “HQ”)

 

AND:

 

BAYER INC.

77 Belfield Road

Toronto, ON M9W 1G6

CANADA

(hereinafter referred to as “Bayer Canada”)

 

AND:

 

BAYER HEALTHCARE LLC

400 Morgan Lane

Westhaven, CT 06516-4175

USA

(hereinafter referred to as “Bayer US”)

 

AND:

 

TALECRIS BIOTHERAPEUTICS, INC.

(F/K/A NPS BIOTHERAPEUTICS, INC.)

P.O. Box 13887

79 TW Alexander Drive

4101 Research Commons

Research Triangle Park

Raleigh, NC 27709

(hereinafter referred to as “Talecris”)

 

(HQ, Bayer Canada and Talecris are
hereinafter collectively referred to as the “Parties”)

 

1 of 52

 

 

WHEREAS:

 

1)                                      Bayer
US and Talecris have entered into that certain Joint Contribution Agreement,
dated as of December 10, 2004, pursuant to which Talecris acquired Bayer’s
plasma business;

 

2)                                      Bayer
Canada, Bayer US and HQ are parties to that certain Purchase Agreement for
Fractionation Services and Commercial Products dated as of April, 1, 2003,
which included Recombinant Hemophilia Products (as amended to date, the “Original
Agreement”);

 

3)                                      Bayer
Canada, Bayer US and HQ have amended the Original Agreement to split it into
two agreements: one with respect to Recombinant Hemophilia Products (the “RHP
Agreement”) and one with respect to the Fractionation Services and Commercial
Products other than Recombinant Hemophilia Products described in the Original
Agreement (the “Main Agreement”);

 

4)                                      Bayer
US wishes to terminate, as of the Effective Date of this Agreement, its ongoing
rights under the Main Agreement relating to activities after the Effective Date
of this Agreement, and Bayer Canada, Bayer US, Talecris and HQ wish to amend
and restate the Main Agreement to reflect Talecris’ acquisition of Bayer US’
manufacturing and fractionation facility in Clayton, North Carolina.

 

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

 

1.                                      DEFINED
TERMS AND INTERPRETATION

 

1.1                               Definitions

 

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

 

(a)                                  “Agreement”,
“this Agreement” and similar expressions refer to this Agreement including the
Schedules referred to in Section 1.3 and not to any particular Article, Section
or other portion of this Agreement and include every amendment or instrument
supplementary to or in implementation of this Agreement;

 

(b)                                 “Business
Day” means any day other than a Saturday, Sunday or statutory holiday in the
Province of Ontario and June 24;

 

(c)                                  “Canadian
Blood Services” and “CBS” means the blood management organization in Canada,
except for the province of Quebec;

 

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

 

(e)                                  “Collection
Centres” means those sites identified in Schedule “F”;

 

2 of 52

 

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

 

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

 

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

 

(i)                                     “Effective
Date” means April 1, 2005;

 

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

 

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

 

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

 

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

 

(n)                                 Intentionally
Deleted;

 

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

 

(p)                                 “Industry
Canada” means Her Majesty the Queen in right of Canada as represented by the
federal Minister of Industry;

 

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

 

(r)                                    “Partnership
Fund” means the research fund supported by Bayer Canada and administered by
Bayer Canada, CBS and HQ whereby research grants are provided, based on merit
for research in the area of biologicals and blood products;

 

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

 

(t)                                    “Plasma
Intermediates” means any by-products produced during the fractionation of the
Plasma by Talecris and returned to CBS or as directed by CBS from time to time;

 

(u)                                 “Products”
means collectively Fractionation Products and Commercial Products;

 

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

 

3 of 52

 

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

 

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

 

 (y)                              “Replacement
Fractionation Products” means products required by HQ pursuant to Sections
6.12, 7.2 and 7.3 and a Replacement Fractionation Product means any one of
them;

 

(z)                                   “Replacement
Product” means products required by HQ pursuant to Sections 3.8, 3.9, 11.4 and
15.1 and a Replacement Product means any one of them;

 

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

 

(bb)                          “Shortage”
means that the total inventory of any Product, issuable and not subject to a
quarantine, Recall or Withdrawal, of Fractionation Products and/or Commercial
Products [***];

 

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

 

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

 

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

 

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

 

(i)                                     March
31, 2007; and

 

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

 

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

 

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

 

(hh)                          “Warehouse”
means HQ’ primary warehouse at 4300 Garand Street, Saint-Laurent, Quebec,
Canada, or such other warehouse as may be designated in writing by HQ to Bayer
Canada and consented to by Bayer Canada, which consent will not unreasonably be
withheld; and,

 

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

 

***CONFIDENTIAL TREATMENT REQUESTED

 

4 of 52

 

1.2                               Extended
Meanings

 

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

 

1.3                               Schedules

 

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

 

	
  Schedule “A”

  	
  -

  	
   

  	
   

  	
  Commercial Products;

  
	
  Schedule “B”

  	
  -

  	
   

  	
   

  	
  Plasma Pick-up Schedule;

  
	
  Schedule “C”

  	
  -

  	
   

  	
   

  	
  Commercial Product Specifications;

  
	
  Schedule “D”

  	
  -

  	
   

  	
   

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

  
	
  Schedule “E”

  	
  -

  	
   

  	
   

  	
  HQ Inventory Target Levels;

  
	
  Schedule “F”

  	
  -

  	
   

  	
   

  	
  Collection Centres;

  
	
  Schedule “G”

  	
  -

  	
   

  	
   

  	
  Intentionally omitted;

  
	
  Schedule “H”

  	
  -

  	
   

  	
   

  	
  Vial Size Substitution / Wastage.

  

 

1.4                               Time

 

Time shall be of the essence.

 

1.5                               Entire
Agreement

 

This Agreement, including the attached
Schedules and the SSA (as defined in Section 15.4), constitutes the entire
Agreement between and among the Parties and Bayer US pertaining to its subject
matter and supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, between and among the
Parties and Bayer US pertaining to the subject matter of this Agreement,
including, without limitation, the Main Agreement except with respect to
obligations of Bayer US which by their nature are required or are specifically
stated to survive the termination of the Main Agreement, including but not
limited to Plasma picked up or to Commercial Products and Fractionation
Products manufactured or partially manufactured prior to the Effective Date. There
are no warranties, representations, or other agreements between or among the
Parties in connection with its subject matter except as specifically set forth
in this Agreement and the SSA. No supplement, modification, amendment, or
waiver of this Agreement shall be binding unless executed in writing by all
Parties.

 

1.6                               Lead

 

The Parties acknowledge that Talecris and
Bayer Canada have an agreement similar in form and substance with CBS, for the
supply and distribution of Products. Talecris and Bayer Canada each
acknowledges that CBS and HQ pool Plasma for fractionation and are together
responsible for the supply of Fractionation Products to Canadians. HQ hereby
acknowledges and agrees that Talecris and Bayer Canada shall take directions
only from CBS with respect to the following:

 

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

 

5 of 52

 

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

 

(iii)                               decisions as to
Fractionation Product to be produced from the pool, including but not limited
to, vial size, and labeling;

 

(iv)                              disposition
of Plasma Intermediates; and

 

 (v)                              the
provision to Bayer Canada of the Plasma and Fractionation Products Rolling Forecasts
of CBS and HQ and the four (4) month forecasts pursuant to Sections 5.1 and
5.2.

 

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

 

1.7                               Role
of Bayer US

 

HQ agrees that Bayer US shall have no further
obligations under the Main Agreement or this Agreement with respect to any
activities from and after the Effective Date of this Agreement and HQ shall
look only to Bayer Canada or to Talecris for performance of obligations under
this Agreement as set forth herein. However, the obligations of Bayer US which
by their nature are required or are specifically stated to survive the
termination of the Main Agreement, shall survive. For greater certainty, these
obligations shall include but not be limited to the obligations of Bayer US and
Bayer Canada with respect to Plasma picked up by Bayer Canada or Bayer US or to
Commercial Products and Fractionation Products manufactured or partially
manufactured by Bayer US prior to the Effective Date. It is further
acknowledged and agreed that Bayer US shall have no ongoing rights or
obligations under this Agreement, except those relating to the enforcement of
or to seek damages from Talecris or Bayer Canada relating to the assignment and
assumption of its rights and obligations described in this Section 1.7.

 

2.                                      PURCHASE
AND SALE OF GOODS/SERVICES

 

2.1                               Goods
and Services

 

HQ shall purchase or obtain from Bayer Canada
and Bayer Canada shall sell or provide to HQ, on the terms and conditions in
this Agreement, the Products and Services, in the quantities and for the prices
set forth in Schedule “A” and Schedule “D.” In connection with the
Fractionation Services, Talecris will, unless otherwise permitted by the
provisions of this Agreement, use Plasma provided to Bayer Canada by HQ.

 

2.2                               Distribution
of Products in Canada

 

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

 

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

 

3.                                      DELIVERY
OF COMMERCIAL PRODUCTS

 

3.1                               Forecasting

 

HQ shall provide Bayer Canada with an
eighteen (18) month rolling forecast (the “Rolling Forecast”) of its total
monthly volume requirement for Commercial Products by the fifth Business Day of
each month (the “Forecast Day”).

 

3.2                               Prior
Forecasts to be Honored

 

The Parties acknowledge that forecasts and
commitments have been made prior to the Effective Date under the Main Agreement
which are applicable for the first six (6) months of this Agreement. The
Parties shall be bound by such forecasts and commitments in accordance with the
terms and conditions of this Agreement.

 

3.3                               Order
for Commercial Products

 

The forecast for each [***]
immediately following each Forecast Day in the Rolling Forecast shall be deemed
as a commitment by HQ to [***] of
Commercial Products referred to in the Rolling Forecast for the applicable
Forecast Day and may not be amended except by the agreement of the Parties (the
“Binding Forecast”). The forecast submitted [***]
after the Binding Forecast shall include the vial sizes of the Commercial
Products that are to be provided to [***] of
Commercial Product in the Binding Forecast and this forecast shall include
specific ordering instructions for vial sizes as well as quantities of each of
the Commercial Products.

 

3.4                               Annual
Volume

 

(a)                                  The
volume of Commercial Products to be purchased by HQ during the first year of
the Agreement is set out in Schedule “A”. In the case of Commercial Product
IGIV and Fractionation Product IGIV to be purchased during the first year of
the Agreement, Bayer Canada shall permit HQ to deviate from this volume by plus
or minus [***] with no price increase or
decrease on a per unit or per gram basis. In the event that HQ purchases during
the first year of the Agreement volume of a Commercial Product that is more
than [***] below the amount provided for in
Schedule “A”, the Parties agree that the price for that Commercial Product
shall be renegotiated by HQ and Bayer Canada for that year. In the event that
HQ wishes to purchase Commercial Product volume in excess of [***] above the volume provided for in Schedule “A”, Bayer
Canada will provide the Commercial Product to HQ if it is available from
Talecris. The price for this excess volume of Commercial Product shall be
determined by HQ and Bayer Canada by market conditions at the time of such
purchase.

 

(b)                                 The
volume purchase commitment in Schedule “A” may be revised by the written
agreement of the Parties six (6) months prior to the start of each year of the
Agreement. [***]

 

***CONFIDENTIAL TREATMENT REQUESTED

 

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[***]

 

3.5                               Delivery

 

Bayer Canada shall deliver the Commercial
Products to HQ as set out in this Agreement and at the times and in the
quantities set out in the Binding Forecast. In the event that HQ’s delivery
requirements change during the Term other than as required by the Binding
Forecast, HQ shall notify Bayer Canada in writing of the revised requirements..
Talecris shall use its reasonable best efforts to satisfy the requirements of
HQ set out in said revised requirements and Bayer Canada will likewise use its
reasonable best efforts to satisfy such revised requirements of HQ. HQ and
Bayer Canada shall agree in writing to the amended Delivery Schedule.

 

3.6                               Late
Deliveries

 

(a)                                  Should
it become apparent, prior to a projected delivery date set out in the Binding
Forecast or amended Delivery Schedule, that a delivery of a Commercial Product
cannot be made on time, Bayer Canada shall promptly notify HQ of such delay and
provide HQ with an estimate, by telephone and facsimile transmission, of when
the Commercial Product will be delivered.

 

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

 

(c)                                  Bayer
Canada shall be required to pay a late delivery fee of [***]
per equivalent unit on any portion of a scheduled delivery of each and every
Commercial Product that is four (4) or more weeks late. The late delivery fee
is payable only when there is no cost differential for Replacement Product
being paid on the late delivery. In the event that a late delivery fee is paid
by Bayer Canada, and the late delivery subsequently becomes the subject of a
cost differential payment as described in Subsection 3.9(c), the amount of the
cost differential payment will be reduced by the amount of any late delivery
fee paid. This amount shall be credited against invoices or paid to CBS in
cash, if there is insufficient Product remaining to be delivered to CBS
pursuant to this Agreement.

 

3.7                               Vial
Size

 

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

 

3.8                               Commercial
Product Recalled, Withdrawn or Not Validly Distributed

 

Notwithstanding Section 3.6, HQ shall have
the right to acquire Replacement Product pursuant to Section 3.9 if there is a:

 

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

 

***CONFIDENTIAL TREATMENT REQUESTED

 

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

 

3.9                               Procedures
for Alternate Sourcing

 

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

 

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

 

(c)                                  If
Replacement Product is purchased by HQ from a third party with the consent of
Bayer Canada, or if it is subsequently determined that Bayer Canada’s refusal
to consent to the purchase was unreasonable, Bayer Canada shall compensate HQ
for the amount, if any, by which the price HQ would have had to pay to Bayer
Canada for the Commercial Product had it been delivered pursuant to this
Agreement is less than the price paid to purchase the Replacement Product. Such
amounts shall be due and payable, in cash or in credit at the option of Bayer
Canada within fifteen (15) days of delivery by HQ of an invoice for such
amounts. Compensation by Bayer Canada of HQ pursuant to this paragraph shall be
the limit of Bayer Canada’s liability hereunder.

 

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

 

3.10                        Minimum
Supply Guarantee to Further Protect Canadians

 

Talecris will supply to Bayer Canada for sale
to HQ and CBS as follows:

 

(i)                                     In
the event that Talecris is able to produce two thirds (2/3) or more of Talecris’
planned global output, Bayer Canada will receive from Talecris for sale to CBS
and HQ their full Commercial Product delivery; or

 

9 of 52

 

(ii)                                  In
the event that Talecris produces less than two thirds (2/3) of Talecris’
planned global output, HQ and CBS will be protected from the full impact of a
shortage by Talecris providing to Bayer Canada for sale to CBS and HQ 50% more
of Talecris’ Commercial Product allocation from Talecris than HQ and CBS would
be proportionally entitled.

 

This is in addition to all other rights
pursuant to this Agreement when Talecris and Bayer Canada are unable to supply
Commercial Product.

 

4.                                      COMMERCIAL
PRODUCTS SPECIFICATION

 

4.1                               Commercial
Product Specifications

 

Bayer Canada shall provide to HQ, Commercial
Products in accordance with the Specifications.

 

4.2                               Bayer
Canada Determines Commercial Products are Unsuitable

 

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

 

4.3                               HQ
Determines Commercial Products are Unsuitable

 

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

 

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

 

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

 

(ii)                                  compensate
Bayer Canada for the direct costs to Talecris or Bayer Canada of such
Withdrawal or quarantine.

 

4.4                               Significant
Reduction in Consumer Preference

 

(a)                                  A
significant reduction in Consumer preference for a Commercial Product occurs
when orders for a Commercial Product drop for [***],
together with evidence that the total market for the type of product in question
has not decreased. HQ shall be required to notify Bayer Canada as soon as
possible in writing in the event that HQ intends to implement this Consumer
preference clause. Such notification shall contain evidence of [***] in Commercial Products orders and evidence that the
total market for that type of product has not declined in a similar manner. HQ
will informally communicate to Bayer Canada as soon as it suspects that this
Consumer preference clause may need to be invoked to allow Bayer Canada to implement
a plan to restore Consumer preference as soon as possible. For greater
certainty, if the decline in demand is due to a shift by Consumers to another
manufacturer’s product that is functionally equivalent to, but significantly
technologically and/or scientifically superior to the Commercial Product, then
HQ shall exercise the recourse set out in Section 15.1.

 

(b)                                 Following
written notice that HQ intends to invoke Subsection 4.4(a), Bayer Canada will
be granted:

 

(i) [***];

 

(ii) [***].

(c)                                  In
the event that Bayer Canada fails to restore orders as set out in Paragraphs
(i) and (ii) above, then the annual volume of the specific Commercial Product
forecast by HQ shall be adjusted to reflect the loss of demand for the specific
Commercial Product and the pricing shall be adjusted according to Schedule “A”
for those Commercial Products identified in the Pricing Schedule-Consumer
Preference Schedule and for those Commercial Products not identified therein,
the price shall be renegotiated by HQ and Bayer Canada.

 

(d)                                 In
the event that Bayer Canada does restore orders for the Commercial Product as
provided for in this Section, [***] and the
time set out in Subsections 4.4(b)(i) and 4.4(b)(ii), if applicable, will be
deducted from the annual volume of Commercial Products forecast by HQ without
any increase in price.

 

***CONFIDENTIAL TREATMENT REQUESTED

 

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5.                                      FRACTIONATION
SERVICES

 

5.1                               Forecasting

 

HQ shall provide Bayer Canada with an
eighteen (18) month rolling forecast of the projected monthly supply of Plasma
and the total monthly volume requirement for Fractionation Products (“Plasma
and Fractionation Products Rolling Forecast”) by the fifth Business Day of each
month (the “Plasma and Fractionation Products Forecast Day”). HQ shall further
provide Bayer Canada on a quarterly basis with an estimate of the number of
litres of Plasma to be shipped to Bayer Canada for fractionation for the next
two (2) calendar quarters.

 

5.2                               Order
for Fractionation Products

 

The forecast for each four (4) month period
immediately following each Plasma and Fractionation Products Forecast Day in
the Plasma and Fractionation Products Rolling Forecast shall be deemed to be a
commitment by HQ to purchase from Bayer Canada the Fractionation Products shown
in the four (4) month forecast and may not be amended except by the mutual
written agreement of HQ and Bayer Canada. This four (4) month portion of the
Plasma and Fractionation Products Rolling Forecast shall include specific ordering
instructions for vial sizes as well as quantities of Fractionation Products.

 

5.3                               Prior
Forecasts to be Honored

 

The Parties acknowledge that forecasts and
commitments have been made prior to the Effective Date under the Main Agreement
which are applicable to the first six (6) months of this Agreement. Each Party
shall be bound by such forecasts and commitments in accordance with the terms
and conditions of this Agreement.

 

5.4                               Forecasting
Continued to Termination Date

 

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

 

5.5                               Survival
of Orders after Termination

 

Any Plasma picked up by Bayer Canada from HQ
for fractionation by Talecris into Fractionation Products prior to the
termination or expiration of this Agreement shall be fractionated by Talecris
and delivered to Bayer Canada for resale to HQ pursuant to this Agreement, and
the rights and obligations of the Parties hereto shall survive to the extent
required to complete and pay for the said Services.

 

6.                                      PLASMA
COLLECTION AND PROCESSING

 

6.1                               Plasma
Collection

 

HQ agrees that all Plasma it collects in
Canada for pickup by Bayer Canada for fractionation by Talecris shall be
collected, stored and transported in accordance with the Canadian Food and
Drugs Act and the Drugs Directorate Guidelines on Blood Collection and Blood
Component Manufacturing, 

 

12 of 52

 

1992, established plasma specifications, and
any amendments thereto and in accordance with current US Import for Export
Regulations.

 

6.2                               Responsibility
for Plasma in HQ’ Possession

 

HQ shall be responsible for and shall bear
all risk of loss or damage to the Plasma collected while it is in its care,
custody and control, including but not limited to any loss or damage resulting
from the improper storage, handling, packing, crating, blocking and/or
transportation of the Plasma to the Collection Centres, except as otherwise
provided in this Agreement.

 

6.3                               Notice
of Plasma Pickup by Bayer Canada

 

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

 

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

 

(ii)                                  such
other pertinent information as Bayer Canada and HQ agree will be provided. In
December of each year of the Term, an annual schedule for the following
calendar year for the pick-up of Plasma from the Collection Centres for
transport to Talecris fractionation facility will be agreed upon by Bayer
Canada and HQ, taking into account the quantity of Plasma to be collected,
storage capabilities and procurement plans. Such schedule is to serve as a
guideline and may be amended by consent from time to time to account for
fluctuations in the volume of Plasma stored at the Collection Centres.

 

6.4                               Pickup,
Transportation and Storage of Plasma by Bayer Canada

 

Bayer Canada agrees to provide HQ with
corrugated shipping containers, at no cost to HQ, to be utilized for the
storage and transportation of the frozen Plasma. Bayer Canada shall be required
at its own expense to pick up the Plasma from the Collection Centres and
arrange for storage if required. The quality assurance department at Bayer
Canada will audit the transportation carrier and any storage facility used by
Bayer Canada on a regular basis. Bayer Canada, reserves the right to select, in
reasonable consultation with HQ, an alternate carrier or storage facility at
any time.

 

6.5                               Maximizing
Transportation Efficiency

 

(a)                                  [***]

 

(b)                                 [***]

 

(i) [***];

 

 

 

***CONFIDENTIAL TREATMENT REQUESTED

 

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52

 

(ii) [***]; and

 

(iii) [***].

 

6.6                               Bayer
Canada Responsible for Exportation of Plasma

 

Bayer Canada is responsible for all costs
incurred for the exportation of Plasma to the United States of America
including transportation, duty, excise, brokerage fees and customs in addition
to insuring documentation is prepared and available as required for
exportation.

 

6.7                               Shipping
Documents and Exportation of Plasma

 

Other than as set out in the SSA (as defined
in Section 15.4), prior to each Plasma shipment from the storage facility,
Bayer Canada will receive from HQ:

 

(i)                                     consolidated
Plasma shipment summary document;

 

(ii)                                  statement
of value for customs purposes; and

 

(iii)                               copies of Collection
Centres Plasma shipment summaries.

 

Donor detail lists (bleed sheets listing
testing and acceptance) shall be shipped directly to fractionation facility
concurrent with the consolidated Plasma shipment from the storage facility.

 

6.8                               Responsibility
for Plasma in Talecris’ or Bayer Canada’s Possession

 

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

 

6.9                               Talecris
to Inspect Plasma

 

Immediately prior to the pooling of Plasma at
Talecris’ US fractionation facility, Talecris shall inspect the Plasma or
otherwise ascertain that it conforms to the requirements of the appropriate regulatory
authorities. For greater certainty, other than as set out or to be set out in
the SSA, Talecris has no duty to test the Plasma and this provision does not
apply to latent defects or deficiencies and shall not release HQ from its
liabilities or responsibility with respect to such Plasma.

 

 

 

***CONFIDENTIAL TREATMENT REQUESTED

 

 

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6.10                        HQ
Determines Plasma Delivered to Bayer Canada is Unsuitable

 

If, after any Plasma has been picked up by
Bayer Canada, HQ determines, acting reasonably, that any of the Plasma is
unsuitable or poses a reasonable likelihood of adverse risk to the safety or
quality of any of Fractionation Products, HQ shall immediately notify Bayer
Canada by telephone and facsimile transmission and shall provide instructions
for amelioration, return to HQ, destruction or other disposition of the Plasma.
All rejected Plasma or Plasma Intermediates shall be held at the expense and
risk of HQ until, at its cost, HQ retakes possession of them or otherwise
directs their disposition. However, if such circumstance is due to the
negligence or willful misconduct of Talecris or Bayer Canada, such costs shall
be borne by Bayer Canada.

 

6.11                        Right
of Talecris and Bayer Canada to Reject HQ Plasma

 

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

 

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

 

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

 

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

 

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

 

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

 

6.12                        Plasma
Rendered Unusable by Talecris or Bayer Canada

 

(a)                                  If
any Plasma is rendered unusable while it is in the care, custody and control of
Talecris or Bayer Canada, Bayer Canada shall replace Fractionation Products
that were to result from the fractionation of such Plasma with equivalent
products manufactured by Talecris (“Replacement Fractionation Products”). These
Replacement Fractionation Products are to be supplied to HQ at the same cost as
HQ would have been required to pay for Fractionation Products had Talecris or
Bayer Canada not rendered the Plasma unusable. The availability of Replacement
Fractionation Products from Bayer Canada for the purpose of this Section shall
be determined 

 

15 of 52

 

at the sole discretion of Bayer Canada, acting
reasonably. Bayer Canada shall supply and deliver Replacement Fractionation
Products on the date scheduled for the delivery of the Fractionation Products.

 

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

 

6.13                        Quarterly
Meetings

 

The Parties will, with CBS, which
organization also has an agreement with Talecris and Bayer Canada, meet
quarterly, beginning in the first quarter after the Effective Date. The purpose
of these quarterly meetings is to discuss matters related to this Agreement
including, but not limited to, reconciliation of Plasma and Products,
operational issues, new processes, procedures and products, inventory levels
and regulatory issues. Quarterly meetings may be cancelled if CBS, HQ, Talecris
and Bayer Canada agree. CBS, Talecris or Bayer Canada may call a special
meeting by giving written notice to HQ and the other parties. The location of
the meetings is to be Ottawa, unless otherwise agreed. The Parties agree to
have the necessary and appropriate representatives, as identified prior to the
meeting, in attendance at the meetings. For greater clarity, Bayer Canada shall
provide to HQ in writing, a complete reconciliation report of Plasma and
Products prior to each quarterly meeting, provided that the quarterly meeting
is scheduled at least six (6) weeks following the end of the prior quarter.

 

6.14                        Change
to HQ Standard Operating Procedures

 

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

 

(b)                                 Bayer
Canada shall submit to HQ the costs associated with the change in SOP, including
the cost of investigation such as additional validation work or pathogen safety
research that may be required. HQ will notify Bayer Canada if it accepts such
costs. The Parties recognize that any changes in the SOP that affect
Fractionation Services could not be anticipated at the time the pricing of the
Fractionation Services was agreed between the Parties, and that changing SOP
could materially affect the cost and viability of the Fractionation Services.

 

6.15                        Work
in Process

 

Effective from April 1, 2006;

 

(a)                                  The
amount of Work in Process Inventory as measured by the volume in litres of
Plasma held and in process, shall not exceed the volume of Plasma picked up by
Bayer Canada from CBS and HQ in the previous eight (8) months for IGIV and ten
(10) months for 25% Albumin unless the excess volume is caused directly or
indirectly by HQ or CBS, Neither Talecris nor Bayer Canada shall be responsible
for disruption in processing caused by insufficient Plasma available for pickup
from HQ and CBS.

 

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(b)                                 Work
in Process Inventory includes all Plasma provided by HQ and CBS that has been
picked up by Bayer Canada for Fractionation Services. It also includes all
Fractionation Products, not yet released for distribution by Health Canada,
processed from Plasma provided by HQ and CBS in the possession of Talecris or
Bayer Canada.

 

(c)                                  Work
in Process Inventory does not include Plasma collected by HQ and CBS held in
Canada awaiting pick up by Bayer Canada unless delay in processing is due to
Bayer Canada’s failure to pick up Plasma.

 

7.                                      DELIVERY
OF FRACTIONATION PRODUCTS AND RECORDS

 

7.1                               Delivery
Schedule and Report on Status of Fractionation Product Delivery

 

Talecris and Bayer Canada shall use
reasonable best efforts to deliver Fractionation Products in accordance with
the four (4) months forecast described in Section 5.2, and Bayer Canada shall
be required to provide monthly written updates to HQ which shall include
delivery status plans and a list confirming the Fractionation Products to be
delivered for the upcoming six (6) week period (“Projected Delivery”).

 

7.2                               Notice
of Delay in Delivery of Fractionation Products

 

(a)                                  Except
as provided for in Section 7.3, should it become apparent prior to a projected
delivery date that a delivery of Fractionation Products cannot be made on time,
Bayer Canada shall promptly notify HQ of such delay and provide HQ with an
estimate, by telephone and facsimile transmission, of when Fractionation
Product will be delivered. If the delay in delivery will result in, or is likely
to result in, a Shortage of any Fractionation Product, Bayer Canada shall be
required, whenever possible, to provide Replacement Fractionation Products to
HQ at the same price at which Bayer Canada would have provided Fractionation
Products pursuant to this Agreement. The availability of Replacement
Fractionation Products from Bayer Canada for the purpose of this Section shall
be determined at the sole discretion of Bayer Canada acting reasonably.

 

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

 

(c)                                  Bayer
Canada shall reimburse HQ for any reasonable out-of-pocket expenses incurred by
HQ in connection with any delay described in Section 7.2(a) above, including,
without limitation, expenses relating to communications with Consumers,
hospitals and clinics.

 

7.3                               Delay
in Delivery of Fractionation Products due to HQ

 

Any delay in the delivery of Fractionation
Products resulting from the failure of HQ or CBS to make the Plasma available
to Bayer Canada in accordance with the Plasma and Fractionation Products
Rolling Forecast shall be the responsibility of HQ and CBS and Talecris and
Bayer Canada shall have no liability or responsibility therefrom. In the event
of any such delay, Bayer Canada agrees to substitute Replacement Fractionation
Products for Fractionation Products if available, on the terms provided for in
this Agreement. The availability of Replacement Fractionation Products from
Bayer Canada for the purpose of this Section shall be determined at the sole
discretion of Bayer Canada

 

17 of 52

 

acting reasonably. Talecris will make all
reasonable efforts to fractionate the delayed shipment of Plasma supplied by HQ
in a timely manner.

 

7.4                               Records

 

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

 

8.                                      DELIVERY
OF PRODUCTS

 

8.1                               Product
Shelf Life

 

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

 

8.2                               Delivery
of Products

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

8.3                               Responsibility
for Products

 

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

 

8.4                               Duty
of Inspection

 

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

 

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

 

9.                                      INVOICES
AND PAYMENT

 

9.1                               Invoices

 

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

 

***CONFIDENTIAL TREATMENT REQUESTED

 

 

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9.2                               Price

 

The prices for Commercial Products to be
charged to HQ by Bayer Canada during the [***] of the
Term are in [***] in accordance with Schedule “A”.
The prices to be charged to HQ for the Services for the [***]
of the Term are in [***] and
charged according to Fractionation Products produced in accordance with
Schedule “D”

 

9.3                               Price
Adjustments

 

(a)                                  Annual

 

Prices for all Products may increase at the
start of each Agreement year (Beginning April 1, 2006) by up to the maximum of
the average increase in CPI over the previous calendar year.

 

(b)                                 Improvements
Mandated by Regulator - Products

 

Where Talecris is directed by the regulator
with authority, to make an Improvement which will result in a price increase
for a Product, Bayer Canada shall provide HQ with notice in accordance with
Section 10.2 and shall substantiate the proposed price increase. Bayer Canada
and HQ shall negotiate in good faith the amount and timing of any proposed
price increase to HQ. If HQ does not agree to accept the price or timing, then
Bayer Canada and HQ have the right to terminate the Agreement with respect to
the Product, immediately upon notice to the other Party without any cost or
penalty.

 

(c)                                  Talecris
Initiated Improvements - Commercial Products

 

With respect to an Improvement initiated by
Talecris for a Commercial Product which will result in a price increase, Bayer
Canada shall notify HQ by June 30 of the prior year, Bayer Canada shall
substantiate the price increase and Bayer Canada and HQ shall negotiate in good
faith the amount and timing of any proposed price increase to HQ which, for
greater clarity will not be implemented prior to April 1 of the following year.
If HQ does not agree to accept the price from Bayer Canada, then Bayer Canada
or HQ has the right to terminate the Agreement with respect to the Commercial
Product, immediately upon notice to the other Party, without any cost or
penalty.

 

(d)                                 Talecris
Initiated Improvements - Fractionation Products

 

With respect to an Improvement initiated by
Talecris for a Fractionation Product, Bayer Canada shall notify HQ in
accordance with Section 10.2, and;

 

(i)                                     Subject
to Section 1.6, if this Improvement will increase the price of the
Fractionation Product to HQ, or will require HQ to make a change to its
collection, processing, storage or shipping of Plasma (“HQ Process”) HQ and
Bayer Canada shall negotiate in good faith the amount and timing of the
proposed price increase to HQ. If HQ does not agree to accept a price increase,
or is unwilling or unable to make the required change to HQ Process then
Talecris remains obligated to continue to provide Fractionation Services in
accordance with this Agreement until the expiry of the Term. If Talecris
Initiated Improvement becomes mandated by the regulator during the Term of the
Agreement then HQ agrees to pay the price increase retroactively to the
implementation of such Improvement. If HQ and Bayer Canada do not agree on the
price increase for the mandated Improvement, the Parties shall proceed to
arbitration.

 

***CONFIDENTIAL TREATMENT REQUESTED

 

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

 

9.4                               Payment
Terms

 

[***]

 

9.5                               Value
added

 

(a)                                  In
consideration of the Products and Services purchased pursuant to this
Agreement, Bayer Canada will provide from Talecris:

 

(i)                                     A
contribution of [***] Canadian funds per year to
the Partnership Fund if a minimum of [***]
equivalent of Intravenous Immunoglobulin (combined Commercial Product and
Fractionation Products and combined forecast of CBS and HQ) is purchased in the
year. For further clarification, the reference to [***]
Canadian funds in this Subsection refers to total contribution to the
Partnership Fund and not [***] Canadian
funds to each of CBS and HQ;

 

(ii)                                  a
contribution of [***] Canadian funds to HQ for
each year Fractionation Services are provided pursuant to this Agreement. These
funds are to be used for educational purposes, in HQ’ sole discretion, and HQ
agrees to recognize Talecris’ contribution to each project supported by this
fund.

 

(iii)                               a contribution of [***] related to the transfer of business to Talecris,
payable immediately upon execution of this Agreement.

 

(b)                                 In
the event Talecris sells its business or any portion thereof, Talecris agrees
to continue to make the contributions set out in Section 9.5(a), based on the
total volume of Products set out in Subsection 9.5(a)(i) and the Services
specified in Subsection 9.5(a)(ii) pursuant to any assignment of any portion of
the Agreement.

 

9.6                               Pricing
Not Affected by Remedies

 

In the event that HQ exercises any right or
remedy as a result of supply problems caused or to the extent contributed by
Talecris or Bayer Canada that reduces the amount of any Product delivered to HQ
by Bayer Canada under this Agreement, the annual volume for that Product shall
be reduced by such amount but the pricing for that Product shall remain at the
level determined by Schedule “A” as if the annual volume were not so reduced.

 

9.7                               Deposit

 

[***]

 

***CONFIDENTIAL TREATMENT REQUESTED

 

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[***]

 

In the event that HQ no longer requires Bayer
Canada to maintain any HQ inventory (E2 or E3) on its premises, HQ shall give
Bayer Canada thirty (30) days written notice and Bayer Canada shall, at the
expiration of said notice, [***] to HQ. HQ
shall be required to purchase the E2 and E3 inventory (which inventory is
described in Schedule E) from Bayer Canada, that has been released by Health Canada
and within the thirty (30) day notice period set out herein, and any remaining
E3 inventory immediately upon release. In the event that HQ has not purchased
the released E2 and E3 inventory after it has been released by Health Canada
within the thirty (30) day notice period set out herein, Bayer Canada shall be
entitled to [***] until all of the E2 and E3
inventory has been purchased from Bayer Canada by HQ.

 

Each week Supplier will use reasonable
commercial effort to provide HQ with an inventory level report reflecting the
inventory levels E2 and E3. On HQ’s reasonable request, Supplier shall provide
verbal inventory level reports for the inventory levels E2 and E3.

 

E2 inventory held at Bayer Canada’s
facilities and released for sale by Health Canada is a major part of HQ safety
stock coverage. In consideration, Bayer Canada shall use all reasonable efforts
to ensure to hold the totality of levels E2 and E3 on behalf of HQ.

 

[***]

 

10.                               REGULATORY
AND QUALITY ASSURANCE MATTERS

 

10.1                        Regulatory
Condition of Supply

 

Bayer Canada shall obtain and submit a copy
of the Notice of Compliance issued by Health Canada to HQ in order to show that
the Products to be supplied meet the requirements of Health Canada,

 

***CONFIDENTIAL TREATMENT REQUESTED

 

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10.2                        Improvements

 

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

 

(b)                                 With
HQ’ agreement, in the event that the Improvement will require HQ to change HQ
Process for fractionation, Bayer Canada shall provide HQ with six (6) months
advance notice to enable it to make the change, validate it and apply to Health
Canada for amendment to its license.

 

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

 

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

 

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

 

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

 

10.3                        Special
Access Program

 

(a)                                  If
any Commercial Product, licensed at the time of execution of this Agreement, is
no longer licensed by Health Canada and becomes available only under SAP during
the Term, such Commercial Product shall be provided to HQ for release pursuant
to SAP (“SAP Commercial Product”). HQ agrees that it will only carry the
inventory level El set out in Schedule “E”. In this particular case, Bayer
Canada will not be required to maintain inventory levels E2 and E3 as set out
in Schedule “E” for SAP Commercial Product unless Bayer Canada and HQ otherwise
agree.

 

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

 

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

 

10.4                        Communications

 

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

 

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

 

(ii)                                  Notices
Of Compliance;

 

(iii)                               Product Monographs
approved by Health Canada;

 

(iv)                              Health
Canada Exit Notices and Responses;

 

(v)                                 FDA
483’s and Talecris’ Responses;

 

(vi)                              Recall/Withdrawal
information and correspondence ; and

 

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

 

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

 

10.5                        Talecris
and Bayer Canada Information

 

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

 

10.6                        Compliance
Audit

 

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

 

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Talecris and Bayer Canada shall provide
responses including corrective measures to audit observations in a timely
manner. Talecris and Bayer Canada shall use their best efforts to implement
said measures within a reasonable time frame.

 

11.                               PRODUCT
WITHDRAWALS/RECALLS

 

11.1                        Recall
/ Withdrawal

 

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

 

(b)                                 Talecris
and Bayer Canada must provide supporting information or documentation to HQ for
dissemination within twenty-four (24) hours by telephone and facsimile of a
decision to Recall/Withdraw any of the Commercial Products, or Fractionation
Products.

 

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

 

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

 

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

 

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

 

11.2                        Patient
Notification System

 

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

 

11.3                        Adverse
Event Reporting

 

In accordance with Health Canada regulations,
HQ will promptly notify Bayer Canada by facsimile of any adverse drug reactions
potentially associated with the use of the Products reported to it. Bayer
Canada shall provide written reports on investigation within ninety (90) days
of receipt of HQ’ written notification.

 

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11.4                        Replacement
Products and Replacement Fractionation Products

 

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

 

12.                               REPRESENTATIONS,
WARRANTIES AND INSPECTION

 

12.1                        Representations
and Warranties of the Parties

 

Each of the Parties represents and warrants
that at the time of entering into this Agreement:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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52

 

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

 

12.2                        Applicable
Laws and Notice of Compliance

 

12.2.1                                                                  Talecris
and Bayer Canada represent and warrant to HQ that the Products have been and
are manufactured in accordance with Canadian regulations and all other
applicable laws and regulations and comply therewith. Talecris and Bayer Canada
further represent and warrant that, if required, valid Health Canada approvals
have been issued and are in good standing. Bayer Canada shall notify HQ
immediately upon any notice of deficiencies or requests for submissions with
respect to any of the Products.

 

12.2.2                                                                  Bayer
US represents and warrants with respect to Plasma picked up and to Commercial
Products and Fractionation Products manufactured or partially manufactured
prior to the Effective Date (“Existing Products”), that such Existing Products
have been stored and/or are manufactured in accordance with Canadian
regulations and all other applicable laws and regulations and comply therewith.
Bayer US further represents and warrants that, if required, valid Health Canada
approvals have been issued and are in good standing. Bayer Canada shall notify
CBS immediately upon any notice of deficiencies or requests for submissions
with respect to any of the Existing Products. Notwithstanding anything to the
contrary above, Bayer US’ representations and warranties only relate to its
handling of the Plasma and its manufacturing or partial manufacturing of the
Commercial Products and Fractionation Products prior to the Effective Date. Any
handling of the Plasma and manufacturing or partial manufacturing of the
Commercial Products and Fractionation Products on or after the Effective Date
is represented and warranted by Talecris and Bayer Canada as per Section 12.2.1
above.

 

12.3                        Title and
Warranty on the Products

 

Talecris and Bayer Canada
hereby warrant:

 

(i)                                     title
in and to the Commercial Products;

 

(ii)                                  the
Products’ conformance to any specification, description or design furnished by
Talecris in any product inserts or labeling;

 

(iii)                               that
the Products shall conform to the Product Specifications; and

 

(iv)                              that
the Products shall comply with all laws, regulations or codes in force in
Canada.

 

Talecris and Bayer Canada
further warrant that the Products shall be transported to HQ in a manner in
which their quality, safety and efficacy are not compromised.

 

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12.4                        Guaranteed
Yield

 

(a)                                  Talecris
and Bayer Canada guarantee that the minimum annual IGIV yield from Plasma
processed through the chromatography process shall be [***].

 

(b)                                 Once
Talecris has fractionated [***]
(excluding reprocessed lots), Talecris and Bayer Canada agree that the minimum
guarantee yield shall be adjusted to [***] of these
lots, effective immediately.

 

(c)                                  Talecris
and Bayer Canada guarantee that the minimum yield for [***].

 

(d)                                 If
the yield falls below the above stated amounts for either [***],
Bayer Canada will provide additional Commercial Product to make up the
deficiency, at the lesser of the price HQ pays for Fractionation Products or
Commercial Products.

 

12.5                        Current
Information

 

Talecris and Bayer Canada
represent and warrant that the information currently provided to HQ and which
will, from time to time, be amended or further provided with the Products,
including without limit, any regulatory filings, circulars and package inserts,
are current, accurate and fulfill any regulatory requirements for the Products.

 

12.6                        No Waiver

 

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

 

12.7                        Survival
of Representations and Warranties

 

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

 

13.                               PATENT
PROTECTION

 

13.1                        No
Infringement

 

Talecris and Bayer Canada
hereby represent and warrant to the best of their knowledge to HQ that none of
the Commercial Products or processes related to the provision of Fractionation
Services or any component thereof infringe or will constitute an infringement
of any patents, trademarks, cell ownership, industrial designs, copyrights and
trade secrets when Products are used according to approved uses.

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

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13.2                        Infringement
by a Product or Process

 

Should any Commercial Product
or process related to the fractionation of Plasma be found to infringe any
third party intellectual property rights, Talecris and Bayer Canada shall, in
addition to the indemnity provided in Section 14.3, in respect to each
infringing Product or process:

 

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

 

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

 

(iii)                               obtain
for HQ at Bayer Canada’s expense, the right to continue to use the Commercial
Products, or Fractionation Products manufactured by the infringing process.

 

14.                               INSURANCE
AND INDEMNIFICATION

 

14.1                        Talecris’
and Bayer Canada’s Insurance

 

Talecris and Bayer Canada shall
each provide and maintain during the Term of the Agreement, at their own
expense, the following insurance coverage: general liability insurance shall
have limits no less than five million dollars ($5,000,000) and product
liability insurance shall have limits no less than five million dollars
($5,000,000) per incident and five million dollars ($5,000,000) per annum in
the aggregate.

 

(a)                                  Bayer
Canada shall provide HQ with proof of valid insurance coverage for both
Talecris and Bayer Canada. A certificate of insurance issued by the insurer
shall be acceptable to HQ as proof of coverage.

 

(b)                                 All
of the aforementioned certificates provided by the insurer to Talecris and
Bayer Canada shall certify the following:

 

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

 

(ii)                                  that
HQ has been added to the certificate as an additional named insured with
respect to the general liability insurance referred to in Section 14.1;

 

(iii)                               a
cross-liability clause is in existence;

 

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

 

(v)                                 a
waiver of subrogation in favor of HQ.

 

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

 

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

 

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

 

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

 

14.2                        HQ
Insurance

 

HQ shall provide and maintain
during the Term of the Agreement, at its own expense, the following insurance
coverage: general liability insurance shall have limits no less than five
million dollars ($5,000,000) per incident and five million dollars ($5,000,000)
per annum in the aggregate.

 

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

 

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

 

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

 

(ii)                                  that
Bayer Canada has been added to a certificate as an additional named insured
with respect to the general liability insurance referred to in Section 14.2;

 

(iii)                               a
cross-liability clause is in existence;

 

(iv)                              the
insurer shall provide notice of amendments or cancellation to Bayer Canada; and

 

(v)                                 a
waiver of subrogation in favor of Bayer Canada.

 

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

 

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

 

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

 

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

 

14.3                        Indemnity

 

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

 

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

 

(i)                                     the
negligence of, or an intentional act or failure to act by Talecris or Bayer
Canada; or,

 

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

 

(iii)                               any
unauthorized or false warranty made by Talecris or Bayer Canada.

 

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

 

(i)                                     the
negligence of, or an intentional act or failure to act by HQ; or,

 

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

 

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

 

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

 

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

 

14.4                        Approval
of Counsel

 

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

 

15.                               CHANGE

 

15.1                        Technological
Change

 

(a)                                  If
HQ believes, acting reasonably, that:

 

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

 

(ii)                                  the
Commercial Products are obsolete;

 

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

 

If Bayer Canada agrees with HQ,
HQ may immediately proceed to acquire Replacement Products from
alternative source(s). If Replacement Products are obtained by HQ the relevant
quantity of Commercial Product to be obtained from Bayer Canada pursuant to the
Agreement shall be decreased accordingly.

 

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

 

(b)                                 Subject
to Section 1.6, if HQ believes, acting reasonably, that:

 

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

 

(ii)                                  the
Fractionation Products are obsolete;

 

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

 

If Bayer Canada agrees with HQ,
HQ may immediately proceed to contract with alternative source(s) for the
purchase of fractionation services. If an alternative source of service is
obtained by HQ the portion of the Agreement relating to Fractionation Services
or particular Fractionation Products shall be terminated, subject to Section 5.5.

 

If Bayer Canada fails to
respond to HQ within fifteen (15) days, then HQ shall have the right to cancel
the Agreement with respect to the Services, subject to Section 5.5.

 

15.2                        Dispute
Resolution

 

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

 

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

 

(ii)                                  that
the Commercial Product is obsolete;

 

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

 

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

 

(b)                                 If,
after the thirty (30) day period set out in (a) such dispute remains
unresolved, HQ shall be entitled to purchase Commercial Products or
Fractionation Services from the third party pending resolution of the dispute. If
the dispute is resolved in Bayer Canada’s favor, HQ shall be required to resume
purchasing the Products or Services from Bayer Canada as soon as is reasonably
possible and shall be liable to Bayer Canada for any loss, including any loss
of profit, incurred by Bayer Canada as a result of HQ purchasing products or
fractionation services from a third party pursuant to this Section. The parties
hereto agree that a reasonable estimate of Bayer Canada’s loss for the purposes
of this Section shall be 15% of the price HQ pays for Product that HQ
failed to purchase because of HQ’ decision to purchase products or services
from a third party.

 

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15.3                        Intentionally
Omitted

 

15.4                        Parvovirus
B19 Testing and the Change to the Caprylate/Chromatography Process

 

The Parties have entered into a
Supplemental Services Agreement (the “SSA”), effective April 1, 2005. All
Plasma picked up on or after April 1, 2005 will be tested for high levels
of parvovirus B 19, and the terms of the SSA shall govern this.

 

16.                               TERMINATION

 

16.1                        Termination
of Agreement

 

HQ or Talecris, at its option,
may, without prejudice to any other right or remedy it may have,
immediately terminate this Agreement or suspend its obligations hereunder if an
Event of Default (as defined in Section 16.2, 16.3 or 16.4 as applicable)
occurs (other than, in the case of HQ, an Event of Default with respect to
itself, or, in the case of Talecris, an Event of Default with respect itself or
with respect to Bayer Canada) by giving the other Parties written notice
thereof. If such termination or suspension occurs, the terminating party shall
be relieved of any further obligations under this Agreement, other than
obligations that are intended to survive termination and payment of any
outstanding invoices or obligations previously incurred.

 

16.2                        Talecris
Event of Default

 

A Talecris “Event of Default”
shall mean:

 

(a)                                  the
failure by Talecris to meet the claims, representations or warranties made on
labeled promotional or product information or on labeled products as required
pursuant to this Agreement;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

16.3                        HQ Event
of Default

 

An HQ “Event of Default” shall
mean:

 

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

 

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

 

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

 

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

 

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

 

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

 

(g)                                 HQ,
or its successor, ceases to coordinate or loses the authority to coordinate the
blood supply program in the province of Quebec.

 

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

 

16.4                        Bayer
Canada Event of Default

 

A Bayer Canada “Event of Default” shall mean:

 

(a)                                  the
failure by Bayer Canada to meet the claims, representations or warranties made
on labeled promotional or product information or on labeled products as
required pursuant to this Agreement;

 

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

 

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

 

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

 

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

 

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

 

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

 

An Event of Default shall, for
the events described in Subsections 16.4(a) and (b) above, take
effect thirty (30) days after notice being given by HQ specifying the default
or breach, during which time Bayer Canada shall be entitled to cure the noted
default.

 

17.                               DISPUTE
RESOLUTION

 

17.1                        Arbitration

 

(a)                                  The
Parties agree that in the event of any dispute or claim between HQ and Talecris
or between HQ and Bayer Canada arising under or in connection with this
Agreement other than described in Section 15.1, or any order issued
pursuant to this Agreement, including, but not limited to, the interpretation
or application of this Agreement, the Parties will endeavour to resolve the
dispute with diligence and good faith negotiations. Any dispute between
Talecris and Bayer Canada shall be resolved in accordance with the agreement
between them, and HQ will have no obligation to participate in any such
resolution.

 

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

 

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

 

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

 

(e)                                  In
the event that one Party wishes a dispute to be put to arbitration then such
party shall give fifteen (15) days written notice thereof to the other parties.
If the Parties cannot agree upon a single arbitrator within fifteen (15) days
after demand by one of them for arbitration, then each of:

 

(i)                                     HQ,
and

 

(ii)                                  Bayer
Canada and Talecris shall select one arbitrator.

 

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The two arbitrators selected
shall then choose a third arbitrator in order that the dispute may be
finally resolved by a majority of the panel of three arbitrators.

 

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

 

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

 

18.                               OPTION
TO RENEW

 

18.1                        Renewal

 

The Term for Commercial
Products may be extended for three (3) one-year terms from April 1,
2007, upon written agreement of Talecris and HQ; provided that Bayer Canada
shall have no obligations under this Agreement for any such extended term
without its express written consent.

 

The Term for Fractionation
Services may be extended for one (1) year from April 1, 2007,
upon written agreement of Talecris and HQ; provided that Bayer Canada shall
have no obligations under this Agreement for any such extended term without its
express written consent.

 

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

 

19.                               GENERAL

 

19.1                        Notices

 

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

 

(i)                                     personally
delivered;

 

(ii)                                  sent
by courier, prepaid; or

 

(iii)                               sent by facsimile.

 

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

 

(i)                                     in
the case of HQ to:

 

 

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Héma Québec

4045 Côte-Vertu Blvd.

Saint-Laurent, Québec H4R 2W7

CANADA

 

	
  Attention:

  	
   

  	
  Directeur
  des produits stables

  
	
  Telephone:

  	
   

  	
  (514)
  832-5000 ext. 319

  
	
  Facsimile:

  	
   

  	
  (514)
  832-0267

  

 

(ii)                                  in
the case of Talecris to:

 

Talecris Biotherapeutics, Inc.

P. O. Box 13887

79 TW Alexander Drive

4101 Research Commons

Research Triangle Park

Raleigh, NC 27709

 

	
  Attention:

  	
   

  	
  general
  legal counsel

  
	
  Facsimile:

  	
   

  	
  (919)
  316-6669

  

 

(iii)                               in
the case of Bayer Canada to:

 

Bayer Inc. Biological Products

77 Belfield Road

Toronto, ON M9W 1 G6

 

	
  Attention:

  	
   

  	
  Vice
  President, Biological Products

  
	
  Telephone:

  	
   

  	
  (416)
  240-5965

  
	
  Facsimile:

  	
   

  	
  (416)
  248-0907

  

 

(iv)                              in
the case of Bayer US to:

 

Bayer Healthcare LLC

400 Morgan Lane

Westhaven, CT 06516-4175

USA

 

Attention:                                         President,
Biological Products

Fax: <>

 

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

 

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19.2                        Assignment

 

Neither this Agreement nor any
of the rights or obligations of any Party may be assigned without the
prior written consent of the other Parties which consent shall not unreasonably
be withheld provided that such consent will not be required for assignment to a
Party’s affiliate as defined by the Canadian Business Corporations Act,

 

19.3                        Independent
Contractors

 

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

 

19.4                        Severability

 

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

 

19.5                        Communication

 

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

 

19.6                        Governing
Law

 

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

 

19.7                        Currency

 

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

 

19.8                        Successors
and Assigns

 

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

 

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19.9                        Confidential
Information

 

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

 

(i)                                     to
the auditors, legal counsel and professional advisors of the Parties hereto,
provided that the professional advisors have entered into a confidentiality
agreement with the disclosing Party,

 

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

 

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

 

19.10                 Pricing
Information to Customers

 

(a)                                  Talecris
and Bayer Canada agree that HQ has the right to provide detailed pricing or
cost information to its Members, the provincial and territorial Ministers of
Health and their delegates.

 

(b)                                 Talecris
and Bayer Canada agree that HQ may provide a range (not to be less than [***] o of the actual specific price of any Commercial
Products) to customers upon request.

 

(c)                                  HQ
agrees that any request (other than as set out in Subsection 19.10(a) above)
for the specific cost of any Commercial Products will be referred to Bayer
Canada.

 

(d)                                 Bayer
Canada will consult with HQ prior to Talecris or Bayer Canada releasing any
pricing or cost information relating to any Fractionation Products.

 

19.11                 Public
Announcements

 

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

 

19.12                 Force Majeure

 

Except as otherwise provided in
this Agreement, neither party shall be liable to the other party and no party
hereto shall be deemed in default hereunder for any failure or delay to perform any
of its covenants and Agreements caused or arising out of the following acts
(providing the same is not within the control of the said party): acts of God,
strikes, lockouts or other industrial disputes, acts of the public enemy,
riots, fire, storm, flood or explosion. If a failure or delay is caused by
one of the events above-mentioned, all times provided for in this Agreement
shall be extended for a period commensurate with the period of the delay and,
to the extent possible, the said party affected will take 

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

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all reasonable steps to remedy
the delay caused by the events above-mentioned; provided; however, that nothing
contained in this Section shall require either party to settle any
industrial dispute.

 

19.13                 Talecris and
Bayer Canada jointly and severally liable

 

Talecris and Bayer Canada shall
be held jointly and severally liable for the obligations set out in this
Agreement.

 

19.14                 No Waiver

 

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

 

19.15                 Counterparts

 

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

 

19.16                 Amendment

 

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

 

19.17                 Acknowledgement

 

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

 

	
  HÉMA-QUÉBEC

  
	
   

  
	
  BY:

  	
  /s/ Francine
  Décary

  	
   

  	
   

  	
   

  	
   

  
	
  NAME:

  	
  Francine
  Décary

  	
   

  	
   

  	
   

  	
   

  
	
  TITLE:

  	
  Chief
  Executive Officer

  	
   

  	
   

  	
   

  	
   

  
	
  DATE:

  	
  April 6,
  2005

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  BAYER
  INC.

  	
   

  
	
   

  	
   

  
	
  BY:

  	
  /s/
  Authorized Signatory

  	
   

  	
  BY:

  	
  /s/
  Authorized Signatory

  	
   

  
	
  NAME:

  	
  Authorized
  Signatory

  	
   

  	
  NAME:

  	
  Authorized
  Signatory

  	
   

  
	
  TITLE:

  	
   

  	
   

  	
  TITLE:

  	
   

  	
   

  
										

 

41 of 52

 

	
  DATE:

  	
   

  	
   

  	
  DATE:

  	
   

  	
   

  
	
   

  	
   

  
	
  TALECRIS
  BIOTHERAPEUTICS, INC.

  	
   

  
	
   

  	
   

  
	
  BY:

  	
  /s/ Lawrence
  D. Stern

  	
   

  	
  BY:

  	
   

  	
   

  
	
  NAME:

  	
  Lawrence D.
  Stern

  	
   

  	
  NAME:

  	
   

  	
   

  
	
  TITLE:

  	
  Chairman
  & CEO

  	
   

  	
  TITLE:

  	
   

  	
   

  
	
  DATE:

  	
   

  	
   

  	
  DATE:

  	
   

  	
   

  
											

 

 

Bayer Healthcare LLC is
executing this Agreement for the sole purpose of assigning to Talecris and
Bayer Canada all of its rights under the Main Agreement relating to activities
after the Effective Date of this Agreement. Bayer Healthcare LLC is not a party
to and has no other rights under this Agreement relating to activities after
the Effective Date of this Agreement other than the right to enforce or seek
damages from Talecris or Bayer Canada relating to such assignment. For greater clarity, Bayer Healthcare
LLC shall remain responsible and liable for Existing Products as defined in Section 12.2.2.

 

	
  BAYER
  HEALTHCARE LLC

  	
   

  
	
   

  	
   

  
	
  BY:

  	
  /s/ JA Akers

  	
   

  	
  BY:

  	
  /s/ Paul R.
  Berry

  	
   

  
	
  NAME:

  	
  JA Akers

  	
   

  	
  NAME:

  	
  Paul R.
  Berry

  	
   

  
	
  TITLE:

  	
   

  	
   

  	
  TITLE:

  	
  Senior Vice
  President

  	
   

  
	
  DATE:

  	
   

  	
   

  	
   

  	
  General
  Counsel and Secretary

  	
   

  
	
   

  	
   

  	
   

  	
  DATE:

  	
   

  	
   

  
										

 

42 of
52

 

 

SCHEDULE “A” - COMMERCIAL PRODUCTS

 

	
   

  	
   

  	
  2005-2006 Volume

  	
   

  	
  Price

  	
   

  
	
  Product

  	
   

  	
  Total

  	
   

  	
  CBS

  	
   

  	
  Héma-Québec

  	
   

  	
  (2005-2006)*

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [***]

  	
   

  

 

[***]

 

	
  Product

  	
   

  	
  Combined CBS/HQ Volume

  	
   

  	
  Price

  (2005-2006 Index)

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
   

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

43 of 52

 

SCHEDULE “A” - COMMERCIAL PRODUCTS
(continued)

 

Pricing Schedule - Consumer Preference Section 4.4 (b)

 

	
  Product

  	
   

  	
  Combined CBS/HQ Volume

  	
   

  	
  (2005-2006 Pricing)*

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  

 

[***]

[***]

***CONFIDENTIAL
TREATMENT REQUESTED

 

44 of 52

 

SCHEDULE “B” - Plasma Pick-Up Schedule

 

	
  CBS

  	
   

  
	
  Centre Name

  	
   

  	
  Address

  	
   

  	
  Min Pick up Frequency

  	
   

  	
  Ann Vol.

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [***]

  	
   

  
	
  HQ

  	
   

  
	
  Centre Name

  	
   

  	
  Address

  	
   

  	
  Min Pick up Frequency

  	
   

  	
  Ann Vol.

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
   

  	
   

  

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

45 of 52

 

SCHEDULE “C” - Commercial Product Specifications

 

	
  Product

  	
   

  	
  Specifications

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

46 of 52

 

SCHEDULE “D” - Fractionation Products And Price Adjustments For
Fractionation Products

 

-Volume Of Plasma Picked Up

 

Fractionation
Products

 

	
  Product

  	
   

  	
  Unit of
  Measure

  	
   

  	
  2005-2006
  Index

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  

 

[***]

 

Price
Adjustments for Fractionation - Volume of Plasma Picked-Up

 

	
   

  	
   

  	
  Price
  Adjustment/Volume

  (2005-2006 Prices)

  
	
  Product

  	
   

  	
  Unit of
  Measure

  	
   

  	
  120,000
  - 140,000

  	
   

  	
  >
  140,001

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  

 

[***]

[***]

***CONFIDENTIAL
TREATMENT REQUESTED

 

47 of 52

 

SCHEDULE “E” – Héma-Québec Inventory Target Levels

 

[***]

 

 

	
  Product

  	
   

  	
  Héma-Québec

  E1

  	
   

  	
  Bayer
  Canada

  E2

  	
   

  	
  Bayer
  Canada

  E3

  
	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  

 

[***]

 

[***]

 

[***]

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

48 of 52

 

SCHEDULE “F” - Collection Centres

 

	
  CBS

  
	
  Centre Name

  	
   

  	
  Address

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  
	
  HQ

  
	
  Centre Name

  	
   

  	
  Address

  
	
  [***]

  	
   

  	
  [***]

  
	
  [***]

  	
   

  	
  [***]

  

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

49 of 52

 

SCHEDULE “G” - Delivery Schedule (Intentionally Omitted)

 

Tables
Intentionally omitted.

 

50 of 52

 

SCHEDULE “H” - Vial Sizes Substitution / Wastage

 

[***]

 

***CONFIDENTIAL
TREATMENT REQUESTED

 

51 of 52

 

Schedule H
(continued) Vial Size Substitution Clause Example 

 

[***]

 

	
   

  	
   

  	
  May

  	
   

  	
  June

  	
   

  	
  July

  	
   

  	
  Aug

  	
   

  	
  Sept

  	
   

  	
  Oct

  	
   

  	
  Nov

  	
   

  	
  Dec

  	
   

  	
  Jan-03

  	
   

  	
  Feb

  	
   

  	
  Mar

  	
   

  	
  Apr

  	
   

  	
  May

  	
   

  	
  Jun

  	
   

  	
  July

  	
   

  
	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
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  [***]

  	
   

  	
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  [***]

  	
   

  	
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  [***]

  	
   

  	
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  [***]

  	
   

  	
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  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
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  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
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  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  	
  [***]

  	
   

  

 

 

Compensation example

 

	
  [***]

  	
   

  	
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  [***]

  	
   

  	
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  [***]

  	
   

  	
  [***]

  	
   

  
	
  [***]

  	
   

  	
  [***]

  	
   

  

 

[***]

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
   

  	
   

  	
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  [***]

  	
   

  	
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  [***]

  	
   

  	
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***CONFIDENTIAL
TREATMENT REQUESTED

 

52 of 52Exhibit 10.29.2

 

***TEXT
OMITTED AND SUBMITTED SEPARATELY

PURSUANT
TO CONFIDENTIAL TREATMENT REQUEST

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

 

FURTHER ASSIGNMENT AND EXTENSION AGREEMENT

 

THIS FURTHER ASSIGNMENT AND EXTENSION AGREEMENT is effective as of April 1, 2006 (“Effecti ve Date”) and is made

 

BETWEEN:

AND AMONGST:

 

HÉMA-QUÉBEC

4045 Côte-Vertu Blvd.

Saint-Laurent, Quebec H4R 2W7 CANADA

 

(hereinafter referred to as “HQ”)

 

AND:                                                                BAYER INC.

 

77 Belfield Road

Toronto, ON M9W 1G6 CANADA

(hereinafter referred to as “Bayer Canada”)

 

AND                                                                   TALECRIS BIOTHERAPEUTICS, INC.

(F/K/A NPS BIOTHERAPEUTICS, Inc.)

P.O. Box 13887

79 TW Alexander Drive

4101 Research Commons

Research Triangle Park

Raleigh, NC 27709

USA

 

(hereinafter referred to as “Talecris”)

 

 

1 of 6

 

AND                                                                   TALECRIS BIOTHERAPEUTICS LTD

5800 Explorer Drive, Suite 310

Mississauga, ON        L4W 5K9

CANADA

 

(hereinafter referred to as “Assignee”)

 

(the above collectively referred to as the “Parties”)

 

WHEREAS:

 

1)                                      Bayer
Canada, Bayer Healthcare LLC (“Bayer US”) and HQ were parties to a Purchase
Agreement for Fractionation Services and Commercial Products dated as of April
1, 2003, which included Recombinant Hemophilia Products;

 

2)                                      Bayer
Canada, Bayer US and HQ have amended the above-mentioned Purchase Agreement to
split it into two (2) agreements: one with respect to Recombinant Hemophilia
Products (the “RHP Agreement”) and one with respect to the Fractionation
Services and Commercial Products other than Recombinant Hemophilia Products
(the “Main Agreement”);

 

3)                                      Bayer
US and Talecris entered into a certain Amended and Restated Joint Contribution
Agreement, dated as of March 30, 2005 pursuant to which Talecris acquired Bayer’s
plasma business;

 

4)                                      Bayer
US wished to terminate its ongoing rights and obligations under the Main
Agreement relating to activities after the effective date of April 1, 2005, and
Bayer Canada, Bayer US, Talecris and HQ wished to amend and restate the Main
Agreement to reflect Talecris’ acquisition of Bayer US’ manufacturing
fractionation facility in Clayton, North Carolina and assumption of Bayer’s
rights and obligations pursuant to the Main Agreement, all as documented by the
Assignment and Second Amended and Restated Purchase Agreement for Fractionation
Services and Commercial Products effective April 1, 2005 (the “Restated
Agreement”);

 

5)                                      Bayer
Canada, Bayer US, and HQ entered into a B19 Supplemental Services Agreement (the
“SSA”) effective April 1, 2005. Bayer US’ rights and obligations were
subsequently assigned to, and assumed by, Talecris by the Assignment Agreement
(the “Assignment Agreement”) also effective April 1, 2005;

 

6)                                      Bayer
Canada wishes to assign its rights and obligations under the Restated
Agreement, under the SSA, and under the Assignment Agreement, and Assignee
agrees to assume all such rights and obligations.

 

 

2 of 6

 

NOW THEREFORE this Further Assignment and Extension Agreement
witnesseth that, in consideration of the premises, covenants and agreements set
out herein the Parties hereto agree as follows:

 

1.0          ENTIRE AGREEMENT

 

The Parties acknowledge that the Main
Agreement, the SSA, the Assignment Agreement, and the Restated Agreement
incorporated by reference herein and this Further Assignment and Extension
Agreement cumulatively represent the entire agreement between and among the
Parties (the “Entire Agreement”) relating to the subject matter hereof.

 

2.0          CHANGES

 

The Parties agree as follows:

 

2.1                                 HQ
consents to the assignment of Bayer Canada’s rights and obligations under the
Restated Agreement, the SSA, and the Assignment Agreement to the Assignee and
hereby releases and forever discharges Bayer Canada from further performance
under the Entire Agreement. Notwithstanding anything in this agreement to the
contrary, Bayer Canada shall remain liable to HQ for its obligations arising
under the Entire Agreement prior to the Effective Date;

 

2.2                                 The
Assignee hereby accepts the aforesaid assignment and covenants and agrees with
Bayer Canada that, from and after the date hereof, the Assignee will observe,
perform and fulfill each and every obligation, term and condition of Bayer
Canada in, to, and under the Restated Agreement, the SSA, the Assignment
Agreement and this Further Assignment and Extension Agreement. Talecris and the
Assignee hereby agree to indemnify and save harmless HQ and Bayer Canada from
and against any and all loss or damage (including legal fees and expenses)
which may be suffered or sustained by HQ or Bayer Canada as a result of any
breach by the Assignee of its obligations hereunder and/or any act or omission
of the Assignee or those for whom the Assignee is legally responsible with
respect to the Entire Agreement from and after the date of this Further Assignment
and Extension Agreement. Talecris and the Assignee shall be jointly and
severally liable to HQ for their cumulative obligations pursuant to the Entire
Agreement;

 

2.3                                 For
greater certainty, Bayer Canada remains liable for actions or omissions taken
or made prior to the Effective Date of this Further Assignment and Extension
Agreement, whether any damages accrue prior to or after such date;

 

2.4                                 Further,
Bayer Canada remains responsible for its obligations pursuant to the RHP
Agreement (#803-2005); which agreement is not affected by any of the terms and
conditions of this Further Assignment and Extension Agreement.

 

2.5                                 [***]

 

 

***CONFIDENTIAL TREATMENT REQUESTED

 

 

3 of 6

 

[***]

 

3.0          REPRESENTATIONS AND WARRANTIES

 

3.1                               Representations
and Warranties

 

The Assignee represents and warrants that at
the time of entering into this Further Assignment and Extension Agreement:

 

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

 

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

 

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

 

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

 

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

 

(c)                                  The
Entire Agreement is a legal, valid and binding obligation of it enforceable
against it in accordance with its terms;

 

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

 

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

 

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

 

***CONFIDENTIAL TREATMENT REQUESTED

 

 

4 of 6

 

3.2                               Survival
of Representations and Warranties

 

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

 

4.0          GENERAL

 

4.1                               Further
Assurances

 

Each of the Parties shall execute and deliver all such further
documents and do such other things as the other party may reasonably request to
give full effect to this Further Assignment and Extension Agreement.

 

4.2                               Successors
and Assigns

 

This Further Assignment and Extension Agreement shall enure to the
benefit of and shall be binding upon the Parties hereto and their respective
successors and assigns.

 

4.3                               Governing
Law

 

This Further Assignment and Extension Agreement shall be construed and
enforced in accordance with the laws of the Province of Ontario and the laws of
Canada applicable therein.

 

4.4                               Counterparts

 

This Further Assignment and Extension Agreement may be executed in
several counterparts which, together, shall constitute one and the same
agreement.

 

5.0                               TERM

 

The Parties agree that the Term of the Entire Agreement shall be
extended to end March 31, 2008 (the “Extended Term”).

 

6.0          ALL OTHER TERMS AND
CONDITIONS TO REMAIN

 

(a)                                  Except
as amended in writing by the Parties, the defined terms contained herein shall
have the same meaning as ascribed to them in the Main Agreement, the Restated
Agreement, the SSA, and the Assignment Agreement.

 

 

5 of 6

 

(b)                                 All
other covenants, terms and conditions contained in the Main Agreement, the
Restated Agreement, the SSA, and the Assignment Agreement, shall, unless
otherwise specifically amended, apply to the matters contemplated herein and
shall continue in full force and effect for the Extended Term.

 

IN WITNESS WHEREOF the Parties have caused
this Further Assignment and Extension Agreement to be executed by their duly
authorized officers, as of the date first written above.

 

	
  HÉMA-QUÉBEC

  	
   

  	
  TALECRIS BIOTHERAPEUTICS, INC

  
	
   

  	
   

  	
   

  
	
  BY:

  	
  /s/ Francine Décary

  	
   

  	
   

  	
  BY:

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
   

  	
   

  
	
  NAME:

  	
  Francine Décary

  	
   

  	
   

  	
  NAME:

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  	
   

  
	
  TITLE:

  	
  Chief Executive Officer

  	
   

  	
   

  	
  TITLE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DATE:

  	
  21-03-2006

  	
   

  	
   

  	
  DATE:

  	
  03/22/06

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TALECRIS BIOTHERAPEUTICS LTD

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BY:

  	
  /s/ Alberto Martinez

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NAME:

  	
  Alberto Martinez

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TITLE:

  	
  President - CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DATE:

  	
  03/22/06

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BAYER INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BY:

  	
  /s/ Philip Blake

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NAME:

  	
  Philip Blake

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TITLE:

  	
  President - CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DATE:

  	
  March 28, 2006

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Authorized Signatory

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized Signatory

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Doug Grant

  	
   

  
	
   

  	
   

  	
   

  	
  Doug Grant, VP, Hematology/Cardiology 

  	
   

  
																	

 

 

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