Exhibit 10.12
SUPPLY AND DISTRIBUTION AGREEMENT: COMMERCIAL PHASE
THIS AGREEMENT (the "AGREEMENT") is entered into by and between OMRIX
BIOPHARMACEUTICALS, LTD., an Israeli company (hereinafter, "OMRIX"), and FFF
ENTERPRISES, INC., a United States ("US") corporation organized and existing
under the laws of California (hereinafter, "FFF"), together with Omrix, the
"PARTIES" and each individually a "PARTY."
WHEREAS:
A. Omrix manufactures Omrigam NF, a proprietary immune globulin intravenous
("IGIV") for use in patients with primary immune deficiency, and wishes to
obtain FDA approval of a Biologics License Application ("BLA") to market
Omrigam NF in the US;
B. FFF is a wholesale distributor of pharmaceutical products, including IGIV
products, in North America and wishes to be the exclusive distributor of
Omrigam NF in the United States of America ("US") subsequent to FDA
approval of the BLA for Omrigam;
C. The Parties have agreed to enter into a Supply and Distribution Agreement:
Investigational Phase (the "INVESTIGATIONAL AGREEMENT"), attached hereto as
Exhibit A;
D. Under the Investigational Agreement, FFF will assume sponsorship of the
Investigational New Drug Application for Omrigam NF and will take
responsibility for conducting clinical trials and distributing Omrigam NF
under a treatment protocol;
E. The term of the Investigational Agreement ends upon FDA approval of the BLA
to market Omrigam NF in the US; and
F. Omrix wishes to designate FFF as its exclusive authorized distributor to
market Omrigam NF in the US, and FFF wishes to accept such designation, all
under the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, effective upon the Effective Date, the Parties agree as follows:
1. EFFECTIVE DATE
This Agreement shall be effective immediately upon execution by the
Parties, except Sections 3.4, 4, 5, 6, 11 and 12, which shall become
effective on the date the FDA issues written notice (which will be attached
hereto as Exhibit B and incorporated as part of this Agreement upon its
issuance) that it has approved a Biologics License to market Omrigam NF in
the US for use in humans with primary immune deficiency (hereafter the
"APPROVAL DATE").
2. DEFINITIONS
As used in this Agreement the following definitions shall apply in each
case where the defined term appears in capitalized form:
2.1 "AFFILIATE" - means any entity controlled by, controlling, or under
common control with a Party to this Agreement, through ownership or
control of more than 50% of the voting power of the shares or other
means of ownership or control, provided that such control continues to
exist.
2.2 "BATCH" - means all material intended to have uniform character and
quality that is produced from a single manufacturing procedure in
accordance with established parameters and according to a single
manufacturing order during that same cycle of manufacture.
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 1 of 29
PORTIONS OF THIS EXHIBIT MARKED BY AN *** HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
2.3 "BLA" - means a Biologics License Application, as defined in 21 CFR
Section 601.2, to market Omrigam NF in the US for use in patients with
primary immune deficiency.
2.4 "CALENDAR YEAR" - means the period beginning on January 1 and ending
on December 31 of each year.
2.5 "CFR" - means the US Code of Federal Regulations, as may be amended
from time to time, and any successor thereto.
2.6 "CGMP" - means current Good Manufacturing Practice and General
Biological Products Standards as defined in 21 CFR Parts 210, 211, 600
and 606.
2.7 "COMMERCIAL PHASE" - means the phase of a relationship between the
Parties after FDA approval of a BLA of Omrigam NF has been obtained
and Omrigam NF may be marketed in the US for use in humans with
primary immune deficiency.
2.8 "DCI CONTRACT" - means the Plasma Supply Agreement between Omrix and
DCI Management Group, LLC, attached hereto as Exhibit C, execution of
which is a condition precedent to this Agreement.
2.9 "FDA" - means the US Food and Drug Administration.
2.10 "HANDLING SPECIFICATIONS" - means the specifications for the handling,
the storage, the use, the transport and the general possession of the
Product by FFF as agreed upon by the Parties in consideration of the
specifications and standards defined and specified in an approved BLA
for the Product, as more fully described in Exhibit D hereto. The
Handling Specifications may be amended from time to time by the
Parties as provided under this Agreement.
2.11 "IGIV" - means immune globulin intravenous.
2.12 "INVESTIGATIONAL PHASE" - means the phase of relationship between the
Parties described in the Investigational Agreement, which covers
exclusive use by FFF and its agents of Omrigam NF in clinical trials
and exclusive distribution by FFF of Omrigam NF under a treatment
protocol (as defined in 21 CFR Section 312.34), provided that a
treatment protocol is approved by the FDA.
2.13 "MASTER BATCH RECORD" - means the criteria, methodology, manufacturing
Process, Specifications and formulae for the Product, which includes
the identity and quantities of the Raw Materials and other components,
as such may be amended by mutual agreement of the Parties from time to
time.
2.14 "OMRIGAM NF" - means Omrix's proprietary polyvalent IGIV, as further
described in Exhibit E hereto.
2.15 "OTHER TAXES" - means all taxes, other than US Taxes, associated with
the marketing, distribution, sale and delivery of the Product,
including but not limited to all sales and export taxes imposed by the
Israeli government.
2.16 "PROCESSING," "PROCESS," and "PROCESSED" - have comparable meanings
and mean the act of manufacturing and inspecting the Product in
accordance with the Master Batch Record and specified procedures.
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 2 of 29
2.17 "PRODUCT" - means Omrigam NF approved by the FDA for commercial
distribution for use in humans with primary immune deficiency only by
means of a Biologics License as defined in 21 CFR Part 601.
2.18 "QUALIFIED PERSON" - means any person who possesses the skills,
experience, education, and authority to perform a task or job
described in this Agreement.
2.19 "RAW MATERIALS" - means the plasma, excipients and associated
manufacturing components, all of which are utilized in Processing. The
plasma used to manufacture the Product or any component thereof shall
at all times be obtained from US licensed collection centers.
2.20 "REGULATORY FILINGS" - means any document or report required to be
filed for an FDA approved biological product under the US Federal
Food, Drug and Cosmetics Act and associated regulations in Title 21 of
the CFR, including without limitation any supplement to an approved
BLA and any postmarketing report for the biological product.
2.21 "SPECIFICATIONS" - means, with respect to the Product, the
Specifications for Processing the Product as agreed upon by the
Parties in consideration of the specifications and standards defined
and specified in an approved BLA for the Product, as more fully
described in Exhibit F hereto. The Specifications may be amended from
time to time by the Parties as provided under this Agreement.
2.22 "TECHNOLOGY" - means all the technical information, whether tangible
or intangible, including (without limitation) any and all data,
techniques, discoveries, inventions, Processes, formulations,
know-how, patents (including any divisional, continuation, extension,
reissue, reexamination certificate, or renewal patents), patent
applications, inventor certificates, trade secrets, method of
production and other proprietary information, that Omrix has rights to
(as either owner, licensee or sublicense), or may hereafter obtain
rights to, relating to the Product.
2.23 "TERM" - as defined in Section 7.1, below.
2.24 "US TAXES" - means all taxes associated with the marketing,
distribution, sale and delivery of the Product that are due, payable
and/or collectable under the laws of US federal, state, and/or local
government, including but not limited to sales, use, excise,
withholding, value-added and similar taxes and all customs, duties or
other US governmental impositions, but excluding taxes calculated on
Omrix's income.
3. GRANT OF RIGHTS
3.1 FFF Rights. Omrix owns certain Technology and facilities to
manufacture the Product. Omrix agrees to use the Technology to
manufacture the Product for FFF subject to the terms and conditions
set forth in this Agreement. Except as otherwise provided in section
5.2.d and 5.2.e, FFF shall have and Omrix hereby grants to FFF the
exclusive right (exclusive even as to Omrix and its Affiliates) to
distribute, market, offer for sale, sell, import and promote the
Product in the US.
3.2 Omrix Obligations. Omrix agrees that:
a. Omrix shall use reasonable commercial efforts to reply to
technical and commercial queries received from FFF in the course
of the performance of its obligations hereunder and shall provide
FFF with such technical assistance and technical, professional,
and clinical data and information as Omrix and
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 3 of 29
FFF, working together, determine are reasonably necessary for the
promotion and solicitation of sale of the Product in the US;
b. Omrix and its Affiliates shall not engage in any marketing,
promotion, advertisement, sale or distribution of the Product
within the US including placing resale and export restrictions in
all contracts for the sale of the Product to third parties other
than FFF; and;
c. Omrix shall not use its Technology, or allow any of its
Affiliates or any third party to use its Technology (e.g., by
grant of a license), for the purpose of competing with FFF,
directly or indirectly, in the US.
3.3 Omrix Rights. Except as provided in Section 3.2 above, Omrix shall
retain all rights to develop, distribute, market, offer for sale,
sell, import and promote the Product outside the US.
3.4 FFF Obligations. FFF agrees that:
a. FFF shall use commercially reasonable efforts to sell, market,
and distribute the Product in the US, faithfully and diligently
perform its obligations as Omrix's distributor, and
professionally promote and develop the sale and use of the
Product in the US;
b. FFF shall perform all marketing and sales activities for the
Product in the US, including, but not limited to, promotion of
the Product by way of meetings, seminars, advertisement in
magazines, participation in exhibitions, sales of the Product and
after sales support;
c. FFF shall make written periodic reports, at least quarterly,
commencing in the quarter in which the BLA is approved by the
FDA, specifying: (i) the promotional activities carried out by
FFF in the reported quarter; and (ii) complaints and requests of
customers of which FFF is aware. FFF shall promptly report to
Omrix any significant developments that could be reasonably
foreseen to have an immediate material adverse impact on its
marketing activities in the US;
d. FFF shall conduct business in a manner that reflects favorably at
all times on the Product, goodwill and reputation of Omrix and
avoid deceptive, misleading or unethical practices, and refrain
from making any representations, warranties or guarantees with
respect to the Product that are known by FFF to be inconsistent
with those made by Omrix in its published or provided literature
for the Product. FFF shall submit to Omrix for its prompt review
and approval all promotional material intended by FFF for use in
the promotion of the Product;
e. FFF shall appoint a Qualified Person as a product manager to
serve as a liaison and chief point of contact between FFF and
Omrix for all marketing, sales, and technical issues related to
the Product;
f. FFF shall employ a professional sales and technical support
organization to provide sales and technical support for Product
to its customers;
g. FFF shall keep Omrix informed as to problems encountered and
resolutions proposed in relation to the Product and communicate
promptly to Omrix all modifications, design changes, or
improvement of the Product suggested by
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 4 of 29
any customers, or any employee of FFF, provided that Omrix
shall be and remain the exclusive owner of such information in
connection with the Product;
h. FFF shall refrain from incurring any liability on behalf of Omrix
except as expressly authorized by this Agreement; and
i. FFF shall not sell, market, offer for sale, sell, import and
promote the Product outside the US.
4. REGULATORY MATTERS
4.1 General. In connection with performing their obligations pursuant to
this Agreement, FFF and Omrix shall use all commercially reasonable
efforts to perform such responsibilities diligently, with the
objective of maximizing the sales potential of the Product and
promoting the therapeutic profile and benefits of the Product in the
most commercially beneficial manner. Without limiting the generality
of the foregoing, each Party shall, at its own expense, except as
otherwise specifically provided in this Agreement:
a. Collaborate and cooperate in the preparation and filing of all
Regulatory Filings as defined in Section 2.20, above and all
other aspects necessary to implement this Agreement;
b. Use commercially reasonable efforts to perform the work set out
for such Party to perform in this Agreement;
c. Conduct all work pursuant to this Agreement in compliance in all
material aspects with all requirements of applicable laws, rules
and regulations, and all other requirements of any applicable
cGMP to achieve the objectives of this Agreement efficiently and
expeditiously; and
d. Maintain records in sufficient detail, which shall be complete
and accurate and shall fully and properly reflect all work done
and results achieved in connection with the Product in the form
required under all applicable laws and regulations.
4.2 Ownership. Omrix shall own the Biologics License for the Product, and
any reissuance or reinstatement thereof. Omrix shall also own all
Regulatory Filings in connection with the Product.
4.3 Duties.
a. As the owner of the Biologics License for the Product, Omrix
shall be primarily responsible for preparing and filing all
Regulatory Filings, including any supplemental applications and
postmarketing reports as required by 21 CFR Parts 314, 600 and
601. Omrix shall consult with FFF in preparing all Regulatory
Filings and FFF shall provide Omrix with timely assistance and
information necessary to prepare Regulatory Fillings as required.
b. Omrix shall be responsible for conducting all communications with
the FDA regarding the Product. Omrix shall provide FFF with
copies of all correspondence received from the FDA regarding the
Product, including any FDA adverse product experience reports as
defined in 21 CFR Section 600.80 or MEDWATCH reports forwarded to
Omrix by the FDA. Additionally, Omrix shall discuss with FFF any
commitments to the FDA prior to agreeing to them.
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 5 of 29
c. Omrix shall be responsible for compliance of the manufacturing
and Processing procedures in accordance with the Specifications.
4.4 Notices Regarding Product. Omrix and FFF shall each give the other
prompt notice of any information either of them receives regarding the
safety of the Raw Materials or the Product, including any confirmed or
unconfirmed information on adverse experience or unexpected adverse
experience, as defined in 21 CFR Part 600, associated with the use of
the Product. For serious adverse experience or unexpected adverse
experience, as defined in 21 CFR Part 600, notice must be given by
telephone within one (1) business day after receipt of the information
and followed by written notice not less than one (1) week thereafter.
Omrix shall be responsible for all responses due and cost for filing
any report with the FDA concerning such adverse reactions associated
with the use of the Product, as required by applicable laws and
regulations (including 21 CFR Section 600.80).
5. PRODUCT SUPPLY
5.1 Commercial Supply. Subject to the terms and conditions of this Section
5, Omrix shall supply FFF with FFF's requirements for Product for
commercial use in the US pursuant to this Agreement. Product shall be
ordered and supplied at the Purchase Price (as defined below),
according to the procedures outlined in this Section 5. Omrix will
make reasonable commercial efforts to negotiate favorable pricing (at
least fair market pricing) for the purchase by Omrix of US sourced
recovered plasma.
5.2 Annual Supply and Purchase Amounts.
a. In the Calendar Year that a BLA for the Product is approved by
the FDA for use in humans with primary immune deficiency, Omrix
agrees to sell to FFF and FFF shall purchase all Product produced
by Omrix from US sourced recovered plasma, provided, however,
that under no circumstances shall FFF be responsible for
purchasing more than the pro rata share of *** grams of the
Product based on the actual number of days from when the BLA is
approved by the FDA until the end of the year in which the
approval is received, unless Omrix has obtained FFF's prior
written agreement that FFF will purchase any such excess Product.
b. Except as provided in Section 5.2.d below, each Calendar Year
thereafter, Omrix agrees to sell to FFF and FFF shall purchase
all Product produced by Omrix from US sourced recovered plasma,
provided, however, that under no circumstances shall FFF be
responsible for purchasing more than *** grams of the Product in
a Calendar Year, unless Omrix has obtained FFF's prior written
agreement that FFF will purchase any such excess Product.
c. In the Calendar Year that this Agreement is terminated or
expired, Omrix agrees to sell to FFF and FFF shall purchase all
Product produced by Omrix from US sourced recovered plasma
purchased, provided, however, that under no circumstances shall
FFF be responsible for purchasing more than the Pro Rata share of
*** grams of the Product based on the actual number of days from
January 1 of the year until the date on which this Agreement is
terminated or expired, unless Omrix has obtained FFF's prior
written agreement that FFF will purchase any such excess Product.
d. In the event that more than *** liters of recovered plasma
sourced in the US is available to Omrix during a Calendar Year,
then FFF will have the option to purchase the Product
manufactured by Omrix from such excess recovered
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 6 of 29
plasma (the "Excess Product"). provided that Omrix will provide
FFF with at least six (6) months prior written notice of the
availability and Purchase Price applicable to the Excess Product.
Omrix will provide FFF with evidence of the price to be paid by
Omrix for the recovered plasma sufficient for FFF to verify the
applicable Purchase Price for the Product. If within sixty (60)
days of receipt of such written notice from Omrix of the quantity
and price of the Excess Product FFF does not agree in writing to
purchase such Excess Product, then the exclusivity granted to FFF
under this Agreement shall not apply to such Excess Product.
e. Notwithstanding anything to the contrary in this Agreement, and
in addition to any right to which Omrix may be entitled under
this Agreement, in the event that FFF shall fail to order and
purchase from Omrix the quantity of Product as required under
this section 5 (i.e., *** grams, plus any higher amounts agreed
to by FFF, including the Excess Product, if the purchase option
is exercised by FFF), then Omrix shall have the right at its sole
discretion to terminate FFF's exclusivity rights granted
hereunder. Omrix shall exercise such right by issuing written
notice to FFF; provided, however, such termination of exclusivity
rights shall not affect the continued validity of those
reasonably applicable remaining provisions of this Agreement and
shall not preclude Omrix from the exercise of any other remedy
available to Omrix under this Agreement or applicable law.
5.3 Processing. Omrix, as the owner of the Technology and any improvements
thereof, shall be responsible for Processing the Product, whether by
itself or by third parties, subsidiaries or Affiliates, in accordance
with the Specifications. Said Processing shall include, without
limitation, all product labeling and other package inserts and
materials required by the FDA. Omrix shall ensure that all services,
facilities and goods used in connection with such manufacture comply
with the applicable cGMPs in effect.
5.4 Change in Processing. Omrix shall not implement any changes relating
to the Product without providing FFF with 20-day prior written notice
of such changes. A change is defined as any variation in the written
procedures currently in place that: (a) impacts the regulatory
commitments for the Product, (b) may require revalidation, (c) may
materially affect the quality, purity, identity or strength of the Raw
Materials or the Product, or (d) would necessarily result in changing,
altering or modifying the Specifications, Handling Specifications,
Testing Methods (defined below), sampling procedures, validation
procedures or Master Batch Record relating to the Product. In the
event that Omrix intends at any time to implement such a change, Omrix
shall complete and bear all costs associated with implementing said
change and performing the studies necessary to meet any and all
requirements from the FDA (including, without limitation, the
requirements of 21 CFR Sections 600.14 and 601.12) needed to approve
such change, except that FFF may, at its sole discretion, complete and
bear the costs of any clinical trials necessary to implement said
change. Omrix shall supply at its expense all the Product required for
such clinical trials.
5.5 Forecasts. During the Term of this Agreement, Omrix shall, by November
30th of each Calendar Year, provide FFF with a non-binding good faith
forecast for the following Calendar Year, broken down into months, for
the quantity of the Product that Omrix anticipates producing from US
sourced recovered plasma. The forecast will be updated every other
month, or more frequently, as otherwise updated by Omrix. The Parties
acknowledge that the actual supply of the Product that Omrix is
obligated to provide is subject to volumes provided under the DCI
Contract.
5.6 Orders for the Product. All FFF's orders for the Product shall be made
pursuant to written purchase orders. Subject to the limitations set
forth in Sections 5.2.a, 5.2.b,
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 7 of 29
5.2.c and 5.2.d above, FFF shall issue purchase orders (or if not
issued, will be deemed to be issued) each calendar quarter, based upon
Omrix's forecast provided in Section 5.5 above. All purchase orders
must be faxed to Omrix at ▇▇▇▇-▇-▇▇▇-▇▇▇▇. Any additional or different
terms on FFF's purchase orders shall have no force or effect and shall
be superseded by the terms of this Agreement. Purchase orders shall be
signed by an authorized official of FFF and shall specify: (a) the
purchase order number; (b) quantities; (c) requested delivery
schedule; (d) preferred shipping method; and (e) exact "Ship to"
address. Any additional or different terms on Omrix's written
acceptance shall have no force or effect and shall be superseded by
the terms of this Agreement. Once accepted by Omrix, FFF's purchase
orders, including those for any excess Product as provided in Section
5.2.d, shall be binding on Omrix to supply to FFF the quantities of
the Product provided in the purchase orders. Omrix reserves the right
to cancel, suspend, refuse, or delay any orders if FFF fails to make
payment when due as required in Section 6.2 below or otherwise fails
to comply with the terms and conditions of this Agreement.
5.7 Delivery. Omrix shall ship the quantity of the Product ordered on the
schedule set forth in Omrix's forecasts. Omrix shall be responsible
for payment of the costs of shipping and insurance associated with the
delivery of the Product to FFF. Omrix shall ship all Products F.O.B.
FFF's designated facility in the US or at any alternative receiving
location if agreed in writing by the Parties. For purposes of this
Agreement, risk of loss in the Product shall pass to FFF at the time
the Product is received by FFF.
5.8 Title. Title to the Product to be delivered to FFF shall remain in
Omrix until delivery of the Product to FFF as described in Section
5.7. Thereafter title to the Product shall transfer to FFF.
5.9 Conformity; Specifications; Quality Control.
a. All quantities of the Product supplied by Omrix pursuant to this
Agreement will comply in all material respects with the
Specifications and shall adhere in all material respects to all
applicable governmental laws and regulations relating to the
manufacture, packaging, sale, storage, and shipment of each
shipment of the Product at the time it is shipped by Omrix
hereunder.
b. Omrix shall conduct, or cause to be conducted, quality control
testing of the Product prior to shipment, in accordance with the
Specifications as are in effect and such other quality control
testing procedures adopted by Omrix from time to time
(collectively, the "TESTING METHODS"). The Testing Methods shall
include all FDA required release testing and Omrix shall
undertake all such tests. Omrix shall retain records pertaining
to such testing. Each shipment of the Product hereunder shall be
accompanied by a certified quality control protocol and
certificate of analysis for each Batch of the Product therein as
well as such customs and other documentation as is necessary or
appropriate.
5.10 Acceptance/Rejection. After receipt of a shipment of the Product,
including documentation as provided in Section 5.9 above, FFF shall
have ten (10) days to accept or reject the Product. Any such rejection
should be based on a documented deviation from the Master Batch Record
and shall be handled as hereafter set forth in Section 5.11.
5.11 Rejection Procedures.
a. Should FFF reject any Batch pursuant to Section 5.10, and Omrix
agrees that such rejection was justified, Omrix shall promptly
credit FFF's account if the
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 8 of 29
invoice with respect to the Batch so rejected will have been paid
by that time by FFF by virtue of Section 6.
b. Should FFF reject any Batch pursuant to Section 5.10, and should
Omrix, after good faith negotiation, fail to agree that such
rejection was justified, the Parties shall jointly appoint an
independent third party to test samples of such Batch and to
review any pertinent record and information developed by both
Parties relating thereto to ascertain the validity of the
rejection. The findings of such third party shall be binding upon
both Parties. If the Product is found to meet the Specifications
in all material respects, FFF shall pay the costs of such tests
and shall be deemed to have accepted the Product as of the date
such findings are published. If the Product is found not to meet
Specifications in any material respect, Omrix shall pay the costs
of such tests and shall promptly credit FFF's account.
c. Upon Omrix's receipt of a claim that a shipment or Batch thereof
of the Product does not meet the Specifications, and Omrix agrees
that such claim is justified, Omrix shall use commercially
reasonable efforts to replace such shipment or Batch thereof with
an additional shipment of the Product that does conform to such
Specifications as soon as practicable.
5.12 Inventory Management. Omrix shall maintain an inventory of the Product
in accordance with Omrix's usual and customary inventory management
practices that Omrix applies to its other therapeutic products, but
sufficient to satisfy the requirements of this Section 5.
5.13 Shortage of Supply.
a. Omrix shall notify FFF: (a) as promptly as possible, but in no
event more than ten (10) days after Omrix's receipt of a purchase
order from FFF as provided in Section 5.6, or (b) immediately
upon becoming aware of Omrix's inability to supply the quantity
of the Product to FFF that Omrix is required to supply hereunder,
Omrix's inability to supply such quantities of the Product. In
such event, Omrix shall implement all commercially reasonable
efforts to remedy such shortage.
b. In the event of Omrix's inability to supply both FFF's
requirements of the Product and Omrix's other requirements,
including any third party requirements as of the date of this
Agreement, for the Product due to force majeure or otherwise,
Omrix shall first allocate the Product that Omrix has in
inventory and that Omrix is able to produce among the quantities
of all such requirements, so that FFF receives all of its
required annual supply of Product, as determined from purchase
orders and where purchase orders are not in place, from the
forecasts, for the Product.
6. PAYMENT
6.1 Purchase Price. The purchase price for the Product supplied by Omrix
to FFF pursuant to this Agreement is listed in Exhibit G ("PURCHASE
PRICE"). The Purchase Price does not include any applicable taxes. FFF
shall pay all US Taxes associated with the sale and delivery of
Omrix's Product to FFF. The Purchase Price represents the net amount
to be received by Omrix. If FFF shall be required to deduct, collect,
withhold or pay such US Taxes, the sum payable to Omrix shall be
increased as may be necessary so that after making all required
deductions, Omrix receives the amount equal to the sum it would have
received had no such deductions been made. Omrix shall pay all Other
Taxes associated with the sale and delivery of Omrix's Product to FFF.
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 9 of 29
6.2 Invoices. Omrix shall invoice FFF for the Purchase Price for all
Products upon shipment (i.e., when shipped from Omrix's plant). All
invoices shall be due and payable within sixty (60) calendar days
after receipt of the invoice by FFF, unless paid within 30 calendar
days, which 30-day payments will receive a 2% discount. If FFF
disagrees for any reason with the amount of an invoice submitted by
Omrix, FFF shall notify Omrix in writing of such disagreement within
thirty (30) calendar days of receipt of such invoice, and the Parties
shall promptly attempt to resolve the difference. Omrix shall
reference FFF's purchase order on all invoices.
6.3 Late Payment Charge. Payments not received by Omrix when due are
subject to a late payment charge at the lower of: (i) one and one half
percent (1.5%) per month; and (ii) the maximum interested permitted
under applicable law.
6.4 Record Keeping. FFF shall keep full, true, and accurate records and
accounts in accordance with generally accepted accounting practices in
connection with this Section 6. These records and accounts shall be
retained for a period of at least two (2) years following termination
or expiration of this Agreement, or such longer period as required
under applicable law. FFF shall allow Omrix representatives not more
frequently than once each calendar year, upon five (5) business days
notice and at reasonable intervals during normal business hours, to
examine FFF's books, ledgers and records covering sales of the Product
under this Agreement (the "AUDIT"). Omrix shall bear the expense of
the Audit, provided, however, if any such Audit reveals that FFF has
understated the amount of payments payment to Omrix pursuant hereto by
an amount of more than five percent (5%) of the amount paid to Omrix
during the period audited, in addition to any other rights and
remedies available to Omrix under this Agreement, FFF shall pay, in
additional to all payments contractually due and applicable interest
thereon, all reasonable costs associated with the Audit.
6.5 Financial Information. FFF shall provide to Omrix quarterly financial
statements, annual audited financial statements, and any other
information that may be reasonably requested by a credit or
receivables insurance entity, or an entity extending credit to Omrix
based upon receivables.
7. TERMS AND CONDITIONS
7.1 Term. The term of this Agreement shall be five (5) years, beginning on
the Approval Date of the Product ("TERM").
7.2 Condition Concurrent. Execution of the Supply and Distribution
Agreement: Investigational Phase, attached hereto as Exhibit A, is a
concurrent condition of execution of this Agreement.
7.3 Processing, Changes to Processing. Omrix shall perform services under
this Agreement in compliance with: (a) all applicable laws and
regulations; (b) cGMP requirements; (c) the Omrix standard operating
procedures in effect as of the date of this Agreement, including any
written revisions as may later be required by either Party; and (d) in
accordance with this Agreement, including the Specifications.
7.4 Modifications to Specifications. Omrix will advise FFF in writing of
any proposed or required modifications to the Specifications prior to
their implementation.
7.5 Adherence to Specifications. Omrix warrants that all Product shall be
Processed in accordance with the Specifications. FFF warrants that,
for the entire period the Product is in possession and under the
responsibility of FFF (i.e., as from the time the Product is received
by FFF until such time the Product has been successfully
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 10 of 29
distributed, marketed, offered for sale sold and/or imported by FFF to
a third party or user), FFF shall comply with the Handling
Specifications.
7.6 Inspection by FFF. Omrix shall permit FFF representatives to enter
Omrix's facility upon reasonable notice and at reasonable intervals
during regular business hours for the purpose of making quality
control inspections of the facilities used in manufacturing,
receiving, sampling, analyzing, storing, handling, packaging, and
shipping of the Raw Materials and the Product as FFF may reasonably
request. FFF shall also have the right to have suitable
representatives present in Omrix's plant to observe the Processing of
the Product, storing, and shipping processes relevant to the Product.
7.7 Inspection by Omrix. FFF shall permit Omrix representatives to enter
FFF's facility upon reasonable notice and at reasonable intervals
during regular business hours for the purpose of making quality
control inspections of the facilities used in receiving, sampling,
analyzing, storing, handling, packaging, and shipping of the Product
as Omrix may reasonably request.
8. CONFIDENTIAL INFORMATION
8.1 Confidential Information. The Parties agree to protect the
confidentiality of all "CONFIDENTIAL INFORMATION." For purposes of
this Agreement, Confidential Information shall include all data and
information generated or derived as the result of the work performed
under this Agreement, the terms and existence of this Agreement, all
Regulatory Filings, the Technology, and any and all materials or
information in written, oral, or any other form concerning processes,
methods, apparatus, specifications, products, materials, inventions,
literature, patents (including applications and rights in either),
finances, personnel, including any matters not technically or legally
considered trade secrets, and any other information related to the
business or activities of any disclosing Party which is not generally
known to third parties. Confidential Information shall be designated
"Confidential" when disclosed, provided that, if Confidential
Information is not marked "Confidential" but, under the circumstances
surrounding the disclosure, such information should in good faith to
be treated as Confidential Information, the receiving Party shall
treat such information as Confidential Information. Confidential
Information does not include information that:
a. Has been in the public domain prior to such disclosure;
b. Becomes part of the public domain through no breach of an
obligation by the receiving Party or its employees;
c. Is furnished to the receiving Party by others or by a third party
who was or is not under an obligation of confidence to the
disclosing Party at the time of the disclosure to the receiving
Party;
d. Is or can be accurately documented to have been independently
developed by the receiving Party, provided that information was
not acquired directly or indirectly from the disclosing Party;
however, the burden of proving that information disclosed by one
Party to the other should not be considered "Confidential
Information" shall be the receiving Party's; or
e. Is required to be disclosed pursuant to court order, legal
proceeding or as required by law or regulation and the receiving
Party first notifies the disclosing Party of the required
disclosure.
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 11 of 29
8.2 Confidentiality Obligations. The Parties agree to not disclose,
resell, transfer or use Confidential Information for any purpose other
than performance of work under this Agreement, without the prior
written consent of the disclosing Party. This provision shall remain
in effect throughout the term of this Agreement and for a period of
ten (10) years following the termination of this Agreement. The
disclosing Party's Confidential Information provided to the receiving
Party shall remain the exclusive property of the disclosing Party and
shall be returned promptly to the disclosing Party upon written
request or upon termination or expiration of this Agreement. Upon
mutual agreement of the Parties, in lieu of returning Confidential
Information, a receiving Party may destroy Confidential Information
and provide written certification to the disclosing Party that such
destruction took place.
8.3 Publicity. During the term of this Agreement, neither Party shall,
without the prior written consent of the other Party, use the other
Party's name, logo, symbol or other images in connection with any
products, promotion or advertising, nor disclose the existence or
substance of this Agreement except as required by law.
8.4 Permitted Disclosures. Notwithstanding the Sections 8.1 and 8.2, (i)
the Parties may, to the extent necessary, disclose and use
Confidential Information to prepare Regulatory Filings, to fulfill all
regulatory requirements related to work performed under this Agreement
including, without limitation, correspondence with the FDA, and to
comply with securities and other agency regulations upon advice of
counsel, and (ii) the Parties may, to the extent necessary, disclose
Confidential Information to their affiliates, attorneys, and
accountants, or to any potential investor or acquirer of a substantial
part of such Party's business (whether by merger, sale of assets, sale
of stock, or otherwise) that is bound by a written agreement to keep
such terms confidential, or as may be required by law. Omrix agrees to
provide FFF with prior notice if the terms of this Agreement will be
disclosed by Omrix to an entity that directly competes in the
manufacture or distribution of IGIV. Omrix's notice will state the
identity of such competitor, and such information will be the
Confidential Information of Omrix.
9. WARRANTIES AND REPRESENTATIONS
9.1 Warranties and Representations of Omrix. Omrix represents and warrants
to FFF that:
a. Omrix is a company duly organized, validly existing and is in
good standing under the laws of the jurisdiction of organization
and has all necessary power to enter into and perform its
obligations under this Agreement;
b. The execution, delivery and performance of this Agreement by
Omrix has been duly authorized and approved by all necessary
action and the Agreement is binding upon and enforceable against
Omrix in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws and general
principles of equity; and
c. Any document provided to FFF concerning the Product and the
Master Batch Record is to the knowledge of Omrix, accurate.
9.2 Warranties and Representations of FFF. FFF represents and warrants to
Omrix that:
a. FFF is a corporation duly organized, validly existing and is in
good standing under the laws of the jurisdiction of organization
and has all necessary power to enter into and perform its
obligations under this Agreement; and
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 12 of 29
b. The execution, delivery and performance of this Agreement by FFF
has been duly authorized and approved by all necessary corporate
action and the Agreement is binding upon and enforceable against
FFF in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws and general
principles of equity.
10. INDEMNIFICATION AND INSURANCE
10.1 Indemnification by FFF. FFF shall defend, indemnify and hold harmless
Omrix, its officers, agents, employees and Affiliates from any loss,
claim, action, damage, expense or liability (including defense costs
and attorneys' fees) finally imposed by court, arbitration, regulatory
agency or settlement resulting from third party claims ("CLAIM") to
the extent that the Claim is based on, arises out of, or is due to
FFF's failure to perform its obligations under this Agreement or FFF's
misconduct or negligence in the shipment, storage, handling,
promotion, marketing, distribution and sale of the Product. Omrix
shall promptly notify FFF of any such Claim coming to its attention
and will cooperate with FFF in the defense of such Claim. If any such
Claims or causes of action are made, Omrix shall be defended by
counsel selected by FFF at FFF's expense, subject to Omrix's
reasonable approval. Omrix reserves the right to be represented by its
own counsel at its own expense.
10.2 Indemnification by Omrix. Except for Claims for which FFF is obligated
to indemnify under Section 10.1, Omrix shall defend, indemnify and
hold harmless FFF, its officers, agents, employees and Affiliates from
any Claim, to the extent that the Claim is based on, or arises out of,
or is due to: (a) a defect of the Products; (b) the failure of the
Product to meet Specifications; (c) a failure of Omrix to perform its
obligations under this Agreement; or (d) infringement of any third
party's intellectual property relating to the manufacturing,
importing, use or sale of the Product. FFF shall promptly notify Omrix
of any such Claim coming to its attention and will cooperate with
Omrix in the defense of such Claim. If any such Claims or causes of
action are made, FFF shall be defended by counsel selected by Omrix at
Omrix's expense, subject to FFF's reasonable approval. FFF reserves
the right to be represented by its own counsel at its own expense.
If the Product is, or in Omrix's opinion, might be held to infringe as set
forth above, Omrix may, at its option and cost, replace or modify the
Product so as to avoid infringement, or procure the right for FFF to
continue the use and sell the Product. The indemnification set forth in
this section 10.2 shall be FFF's sole remedy and Omrix's sole liability
arising out of Claims of infringement.
10.3 Notices. In the event that either Party seeks indemnification (the
"INDEMNIFIED PARTY") under the terms of this Section 10, the
Indemnified Party shall notify the other Party (the "INDEMNIFYING
PARTY"), in writing, of the action, suit, proceeding, claim,
liability, demand or assessment giving rise to the claim for
indemnification as soon as reasonably practicable after its assertion.
The Indemnified Party shall permit the Indemnifying Party, at the
Indemnifying Party's cost, to assume direction and control of the
defense of the claim, and shall cooperate as requested (at the expense
of the Indemnifying Party), in the defense of the claim. The
Indemnified Party shall not settle or otherwise compromise any claims
or suit without the prior written consent of the Indemnifying Party.
10.4 Insurance. Each Party shall procure and maintain, at its own expense,
in full force and effect at all times during which the Product are
being sold pursuant to this Agreement, product liability insurance
with respect to the Product, on the part of Omrix, and FFF, written by
a responsible insurance carrier, Best Rated A, with a combined single
limit of not less than ten million U.S. dollars (U.S. $10,000,000).
Such insurance policy shall name both Parties hereto as additional
insureds and will
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 13 of 29
provide for at least thirty (30) days prior written notice to the
other Party of the cancellation or substantial adverse modification
thereof. Each Party hereto shall deliver a certificate of such
insurance to the other Party promptly upon issuance of the policy and
shall, from time to time as reasonably requested by such other Party,
furnish such other Party with evidence of the maintenance thereof. If
any of the insurance policies described herein are written on a claims
made basis, the applicable Party maintaining such insurance agrees
either to (a) continue to purchase such coverage or (b) purchase an
extended reporting period endorsement ("tail" insurance), in either
instance for the entire Term, and for a period of five (5) years after
the end of such Term.
10.5 Waiver. Each Party hereby waives any claims against the other (whether
found upon the indemnification provisions contained in this Agreement
or otherwise) to the extent any such claim is covered by, and loss
proceeds are paid to and received by such waiving Party, from the
insurance either carried by and for the benefit of such waiving Party,
and provided such waiver: (i) is not in violation of the policies of
insurance under which such loss proceeds are so paid; (ii) does not
invalidate such insurance; and (iii) does not disproportionately
increase the premiums thereof.
11. RECALLS AND WITHDRAWALS
11.1 Implementation. If any Product must be recalled or withdrawn by reason
of failure to meet any applicable Specifications, requirements of the
FDA or any other requirements of law, FFF shall have the sole
responsibility to effect the recall or withdrawal of the Product.
Omrix shall cooperate as reasonably required in FFF's efforts, and
shall notify FFF if it is determined by Omrix that such a recall or
withdrawal is warranted based on Omrix's quality control findings.
11.2 Costs. FFF shall reimburse Omrix for any costs reasonably expended by
Omrix to effect the recall or withdrawal, unless the reason for the
recall or withdrawal is due to Omrix's failure to Process the Product
in accordance with the Specifications, a manufacturing error or
omission, or the negligence of Omrix. In such case, Omrix shall
reimburse FFF for any costs reasonably expended to effect the recall
or withdrawal.
12. RECORDS AND AUDITS
12.1 Maintenance of Records. During the Term of this Agreement and for ten
(10) years or such other period required by the FDA after the
expiration date of any particular Batch of the Product manufactured by
Omrix for FFF, Omrix shall maintain records and samples relating to
such Batch(es) sufficient to substantiate and verify its duties and
obligations hereunder, including but not limited to records of orders
received, Raw Materials provided including the source and donor
information of the human plasma, Product manufactured, work in
progress, validation reports, Processing analyses and quality control
tests, and the like.
12.2 Regulatory Audits. Omrix shall be responsible for all routine
stability testing and sample retention as required by the FDA. Omrix
shall immediately inform FFF of all FDA or other regulatory audits
pertinent to the Raw Materials, the Product or Specifications. Omrix
shall inform FFF in advance of planned FDA or other regulatory audits
as soon as the schedule therefor is known. Omrix shall provide FFF
with copies of any regulatory letters or other documents issued by the
FDA in connection with the audit or inspection within five (5) days of
Omrix's receipt of such a document.
12.3 Review of Records. Omrix shall allow FFF representatives, upon
reasonable notice and at reasonable intervals during normal business
hours, to enter Omrix's plant for
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 14 of 29
the purpose of taking inventories. Omrix shall further allow FFF
representatives, upon reasonable notice and at such intervals as may
be reasonably necessary, to examine and copy the records referenced in
Section 12.1 and test the samples according to the procedures outlined
in the Specifications during normal business hours for product
liability, regulatory and quality control purposes.
13. TERMINATION
13.1 Termination by Either Party. Either Party shall have the right to
terminate this Agreement by giving the other Party written notice if:
a. The other Party fails to perform or violates any material
provision of this Agreement in any material respect, and such
failure continues unremedied for a period of sixty (60) days
after the date the notifying Party gives written notice to the
defaulting Party with respect thereto; or
b. The other Party is declared insolvent or bankrupt by a court of
competent jurisdiction, or a voluntary petition of bankruptcy is
filed in any court of competent jurisdiction by the other Party,
or the other Party makes or executes any assignment for the
benefit of creditors, or a receiver is appointed to control the
business of the other Party, or the other Party becomes subject
to any proceedings under any bankruptcy or insolvency laws (which
proceedings or appointment is not terminated within thirty (30)
days).
13.2 Termination by FFF for Cause. FFF may terminate this Agreement by
giving Omrix written notice if during the Term of this Agreement, the
Biologics License for the Product is suspended or revoked and cannot
be reissued or reinstated without undue hardship to either Party.
13.3 Termination by FFF without Cause. FFF may, upon sixty (60) days' prior
written notice, terminate this Agreement subject to payment by FFF to
Omrix of:
a. All purchases of the Product required to be made by FFF at the
time of such termination pursuant to accepted Purchase Orders,
plus
b. A sum equal to the unavoidable expenses for which Omrix will be
liable because of such termination, including (i) amounts
committed by Omrix in connection with the DCI Contract; provided,
however, that if Omrix requires FFF to bear such costs in
connection with such agreements, FFF will have the option to have
such agreements assigned to FFF, subject to the approval of DCI,
and Omrix shall have no obligations or liability after such
assignment; and (ii) the proportionate part of the annual FDA fee
paid by Omrix in connection with the marketing of the Product in
the US on a pro-rata basis. The obligations of FFF under this
Section 13.3 shall similarly apply if this Agreement is
terminated by Omrix for cause under Section 13.1 above, in
addition to any rights and remedies available to Omrix under this
Agreement or law.
13.4 Automatic Termination. This Agreement will automatically terminate if
the Investigational Agreement is terminated prior to the Approval
Date.
13.5 Effect of Termination. This Agreement shall terminate in accordance
with the time periods set forth in Sections 13.1, 13.2 and 13.3. On
the date of termination or expiration of this Agreement, all rights
and obligations granted under or imposed by this Agreement will cease
and terminate, except as set forth in this Section 13.4 and Section
28. Notwithstanding any other provision to the contrary contained
herein,
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 15 of 29
such expiration or termination shall not affect any claim, demand,
liability or right of a Party arising pursuant to this Agreement prior
to the expiration or termination hereof.
13.6 Transitional Matters.
a. Outstanding Purchase Orders. Upon expiration of this Agreement or
earlier termination by Omrix or FFF:
1. Omrix, at its option, may cancel all unfilled orders; and
2. The due date of all outstanding invoices for the Product,
and the obligation to pay the sums detailed in Section 13.3
above, will automatically be accelerated so that they become
due and payable on the effective date of expiration or
termination, as the case may be, even if longer terms had
been provided previously.
b. Remaining Inventory. Upon termination of this Agreement by either
Party or upon the expiration of this Agreement, FFF shall be
entitled to sell any Product that remains in its inventory over a
number of days determined by multiplying 1.2 times the average
days of inventory which remains in FFF's inventory on the date
the Agreement is terminated. After that time, FFF may not sell
the Product.
14. INTELLECTUAL PROPERTY
14.1 Omrix Intellectual Property. All right, title and interest in and to
all Omrix Intellectual Property shall be the sole and exclusive
property of Omrix. Nothing in this Agreement should be construed to
confer upon or grant FFF any right, title and interest therein.
a. Under this Agreement, "OMRIX INTELLECTUAL PROPERTY" includes the
following as owned by Omrix: the Technology, as that term is
defined in Section 2.22; patents, patent applications, patent
disclosures and all related continuation, continuation-in-part,
divisional, reissue, reexamination, utility model, certificate of
invention and design patents, patent applications, registrations
and applications for registrations; trademarks, service marks,
trade dress, Internet domain names, logos, trade names and
corporate names and registrations and applications for
registration thereof; copyrights and registrations and
applications for registration thereof; mask works and
registrations and applications for registration thereof; computer
software, data and documentation; inventions, trade secrets and
confidential business information, whether patentable or
nonpatentable and whether or not reduced to practice, know-how,
manufacturing and product processes and techniques, research and
development information, copyrightable works, financial,
marketing and business data, pricing and cost information,
business and marketing plans and customer and supplier lists and
information; and copies and tangible embodiments thereof.
b. FFF expressly agrees that the name "Omrix," Omrigam NF and any
related designs are the sole property of Omrix. It is further
understood that there may be in the future other commercial names
or marks identified with Omrix's products, and that the same are
the property of Omrix. The said names, designs, and other marks
are referred to collectively herein as the "OMRIX MARKS" which
marks Omrix may, in its sole discretion, revise from time to
time. FFF hereby acknowledges and agrees that Omrix shall retain
ownership of all intellectual property rights in the Omrix Marks,
including, but not limited to, any and all, modifications and
derivatives thereto. All rights not expressly granted to FFF
herein are reserved by Omrix.
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 16 of 29
c. Upon termination or expiration of this Agreement, FFF shall
return all Omrix Intellectual Property, provided that FFF may
retain one copy of any documentation if necessary to comply with
regulatory requirements, and that FFF may, in lieu of returning
Omrix Intellectual Property, request permission from Omrix to
destroy such property and provide written certification to Omrix
of such destruction.
14.2 Limited License. Omrix herby grants FFF the right and license to use
Omrix Intellectual Property and Omrix Marks for the purpose of
marketing, advertising, promoting, importing, selling and supporting
the Product. The right and license granted hereunder is only in
connection with the marketing, advertising, promoting, importing,
selling and supporting the Product.
14.3 FFF Intellectual Property. All right, title and interest in and to all
FFF Intellectual Property shall be the sole and exclusive property of
FFF. Nothing in this Agreement should be construed to confer upon or
grant Omrix any right, title and interest therein.
a. Under this Agreement, "FFF INTELLECTUAL PROPERTY" includes:
trademarks, service marks, trade dress, Internet domain names,
logos, trade names and corporate names and registrations and
applications for registration thereof; copyrights and
registrations and applications for registration thereof; mask
works and registrations and applications for registration
thereof; computer software, data and documentation; inventions,
trade secrets and confidential business information, whether
patentable or nonpatentable and whether or not reduced to
practice, know-how, manufacturing and product processes and
techniques, research and development information, copyrightable
works, financial, marketing and business data, pricing and cost
information, business and marketing plans and customer and
supplier lists and information; and copies and tangible
embodiments thereof as owned by FFF.
b. Upon termination or expiration of this Agreement, Omrix shall
return all FFF Intellectual Property, provided that Omrix may
retain one copy of any documentation if necessary to comply with
regulatory requirements, and that Omrix may, in lieu of returning
FFF Intellectual Property, request permission from FFF to destroy
such property and provide written certification to FFF of such
destruction.
15. INDEPENDENT CONTRACTORS
It is not the intent of the Parties hereto to form any partnership or joint
venture. Each Party shall, in relation to its obligations hereunder, act as
an independent contractor, and nothing in this Agreement shall be construed
to give such Party the power or authority to act for, bind or commit the
other Party in any way whatsoever.
16. LIMITED WARRANTY; LIMITATION OF LIABILITY
16.1. Limited Warranty. Omrix warrants to FFF that the Omrigam NF will meet
the specifications detailed in the BLA, the Specifications, and FFF's
standard operating procedures (as reviewed and approved by Omrix) at
the time of delivery of each shipment to FFF. FFF will inspect each
such shipment within ten (10) days following receipt of the shipment
(the "INSPECTION PERIOD") to determine whether the Omrigam NF complied
with this warranty. FFF shall promptly notify Omrix within the
Inspection Period if any particular shipment does not so comply with
such warranty. If FFF does not deliver written notice to Omrix within
the applicable Inspection Period of receipt of a shipment that FFF
rejects such shipment because of a non-compliance with such
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 17 of 29
warranty, FFF will be deemed to have accepted the shipment. Any
defective Omrigam NF shall, with Omrix's prior written authorization,
be returned to Omrix, or any third party designated by Omrix, as set
forth below, within the warranty period. Prior to returning any
Omrigam NF, FFF must first obtain a Return Materials Authorization
("RMA") number from Omrix. Should the Omrigam NF prove defective prior
to receipt by FFF, Omrix will remedy or replace, at its discretion,
the defective Omrigam NF when it is returned to Omrix. If Omrix is
unable to remedy or replace the Omrigam NF, it shall so notify FFF,
and Omrix shall credit to FFF the amount paid by FFF to Omrix for such
defective Omrigam NF, if any. This warranty shall not apply to the
extent that Omrix determines the Omrigam NF has been subject to
storage, use or other conditions caused by FFF not in accordance with
the applicable specifications, or has otherwise been the subject of
mishandling, misuse, neglect, alteration, or damage by FFF.
16.2. WARRANTY EXCLUSION. EXCEPT AS EXPRESSLY SET FORTH ABOVE, THE OMRIGAM
NF IS PROVIDED "AS IS", AND NO OTHER WARRANTIES, EITHER EXPRESSED OR
IMPLIED, ARE MADE WITH RESPECT TO THE OMRIGAM NF, INCLUDING, WITHOUT
LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. FFF's sole and exclusive remedy for any breach of
the foregoing limited warranty will be, at Omrix's option, remedy or
replacement of the Omrigam NF or refund the amount paid, if any. For
the Omrigam NF that becomes defective after the warranty has expired,
FFF may return it to Omrix for replacement after obtaining an RMA
number. Provided FFF has received credit for the returned Product, FFF
will be invoiced for the replacement Product upon shipment to FFF.
16.3. EXCLUSION OF DAMAGES. EACH PARTY SHALL NOT UNDER ANY CIRCUMSTANCES BE
LIABLE TO THE OTHER OR ANY CUSTOMER OR THIRD PARTY FOR ANY SPECIAL,
INCIDENTAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING IN ANY
WAY UNDER THIS AGREEMENT OR FROM DEFECTS IN OR USE OF THE OMRIGAM NF,
AND UNDER ANY THEORY OF LIABILITY, EVEN IF A PARTY IS INFORMED IN
ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED THAT THE
FOREGOING SHALL NOT APPLY TO DAMAGES AWARDED IN THE CASE OF PERSONAL
INJURY OR DEATH TO THE EXTENT SUCH DAMAGES CANNOT BE DISCLAIMED UNDER
APPLICABLE LAW, OR FOR BREACH OF CONFIDENTIALITY.
16.4. CAP ON LIABILITY. TO THE EXTENT PERMISSIBLE UNDER APPLICABLE LAW, IN
NO EVENT WILL EITHER PARTY'S LIABILITY IN CONNECTION WITH OMRIGAM NF
OR THIS AGREEMENT EXCEED $10,000,000. THESE LIMITATIONS APPLY TO ALL
CAUSES OF ACTION IN THE AGGREGATE. THIS LIMITATION SHALL NOT APPLY TO
AMOUNTS OWING FOR REQUIRED PURCHASES OF OMRIGAM NF BY FFF UNDER THIS
AGREEMENT, INCLUDING AS REQUIRED UNDER THE DCI CONTRACT. THE FOREGOING
LIMITATIONS IN THIS SECTION 16.4 SHALL NOT APPLY TO DAMAGES AWARDED IN
THE CASE OF PERSONAL INJURY OR DEATH OR INFRINGEMENT UNDER SECTION 10.
17. ASSIGNMENT AND DELEGATION; REORGANIZATION
This Agreement may not be assigned by either Party without the prior
written consent of the other Party, except that either Party shall be
permitted to assign this Agreement, without the other Party's consent, to
an Affiliate or a company acquiring all or substantially all of the first
Party's relevant assets, voting stock or business to which this Agreement
relates, upon written notice to the other Party. Such assignment shall be
subject to the assignee agreeing in writing to assume the benefits and
obligations of this Agreement. Any assignment made without prior written
consent, if such consent is required, shall be wholly void and invalid. If
either party is reorganized in such a manner
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 18 of 29
that a substantial portion of the assets of a party are transferred to an
Affiliate, then such party shall require such Affiliate to guaranty the
performance of such party's obligations under this Agreement. Anything to
the contrary herein notwithstanding, each Party agrees that the right and
obligations under this Agreement of the other Party may, from time to time,
be exercised or performed, as the case may be, in whole or in part by
Affiliates of such Party; provided that each Party shall remain liable for
any such obligations delegated to its Affiliates.
18. GOVERNING LAW AND VENUE
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York without regard to
conflict of laws principles. The UN Convention on Contracts for the
International Sale of Goods shall not apply. Any action or proceeding
arising out of this Agreement permitted to be brought in court under
section 19.2 will be litigated in courts located in New York. Each Party
consents and submits to the jurisdiction of any local, state, or federal
court located in New York for such purpose.
19. DISPUTE RESOLUTION
19.1 Initial Efforts. The Parties agree to use their best efforts to
resolve any controversy or claim arising out of or relating to this
Agreement through good faith negotiations for a thirty (30) day
period, unless otherwise agreed by the parties.
19.2 Arbitration. The Parties agree that any dispute, controversy or claim
that is not resolved under section 19.1, above, shall be settled by
binding arbitration under the then current Commercial Arbitration
Rules of the American Arbitration Association. Any such arbitration
shall be conducted in the State of New York, in the English language.
The arbitration shall be conducted by a sole arbitrator who shall be
appointed by mutual agreement of the Parties. The Arbitrator shall be
appointed by agreement of the Parties; provided, if the Parties fail
to agree upon the Arbitrator within thirty (30) days of notice of
arbitration provided by either Party, the Arbitrator shall be
appointed by the American Arbitration Association. Upon rendering an
award or a decision, the Arbitrator shall set forth in writing the
basis of such award or decision. The Arbitrator's awards and decisions
shall be final and binding upon the Parties. Judgment on the award or
any other final or interim decision rendered by the Arbitrator may be
entered, registered or filed for enforcement purposes in any court
having jurisdiction thereof. The Parties agree that, any provision of
applicable law notwithstanding, they will not request, and the
arbitrator shall have no authority to award, punitive or exemplary
damages against any Party. The costs of any arbitration, including
administrative fees and fees of the arbitrator(s), shall be shared
equally by the Parties, unless otherwise specified by the arbitrator.
Each Party shall bear the cost of its own attorneys' and expert fees;
provided that the arbitrator(s) may in their discretion award to the
prevailing Party the costs and expense incurred by the prevailing
Party in connection with the arbitration proceeding.
19.3 Attorneys' Fees. If any arbitration or litigation is instituted to
interpret, enforce, or rescind this Agreement, including but not
limited to any proceeding brought under the United States Bankruptcy
Code, the prevailing party on a claim will be entitled to recover with
respect to the claim, in addition to any other relief awarded, the
prevailing party's reasonable attorneys' fees and other fees, costs,
and expenses of every kind.
20. WAIVER
A failure by one of the Parties to this Agreement to assert its rights for
or upon any breach or default of this Agreement shall not be deemed a
waiver of such rights nor shall any such waiver be implied from acceptance
of any payment. No such failure or waiver in writing by any one of the
Parties
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 19 of 29
hereto with respect to any rights shall extend to or affect any subsequent
breach or impair any right consequent thereon.
21. AMENDMENTS
No alteration or amendment of this Agreement shall be valid unless agreed
to in writing by both Parties.
22. SEVERABILITY
The Parties agree that it is the intention of neither Party to violate any
public policy, statutory or common laws, and governmental or supranational
regulations; that if any sentence, paragraph, clause or combination of the
same is in violation of any applicable law or regulation, or is
unenforceable or void for any reason whatsoever, such sentence, paragraph,
clause or combinations of the same shall be inoperative and the remainder
of the Agreement shall remain binding upon the Parties.
23. FORCE MAJEURE
Neither Party hereto shall be liable to the other in damages for, nor shall
this Agreement be terminable by reason of, any delay or default in such
Party's performance hereunder, if such delay or default is caused by
conditions beyond such Party's control including, but not limited to, acts
of God, war, insurrection, civil commotion, destruction of production
facilities or materials by earthquake, fire, flood or storm, labor
disturbances including strikes or lockouts, epidemic or failure of
suppliers, public utilities or common carriers. Each Party hereto agrees to
promptly notify the other Party of any event of force majeure under this
Section and to employ all reasonable efforts toward prompt resumption of
its performance hereunder when possible if such performance is delayed or
interrupted by reason of such event.
24. NOTICES
24.1 All notices and other communications required or desired to be given
or sent by one Party to the other Party shall be in writing, in the
English language, and shall be deemed to have been given:
a. On the date of delivery, if delivered to the persons identified
below,
b. Five (5) calendar days after mailing if mailed, with proper
postage, by certified or registered airmail, postage prepaid,
return receipt requested, addressed as set forth below,
c. On the date of receipt if sent by telex or telecopy, and
confirmed in writing in the manner set forth in Section 24.1.b on
or before the next day after the sending of the telex or
telecopy, or
d. Two (2) business days after delivered to an internationally
recognized overnight courier service marked for overnight
delivery.
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 20 of 29
24.2 Notices shall be addressed to the following addresses:
TO FFF: To Omrix:
FFF Enterprises, Inc. Omrix Biopharmaceuticals, Ltd
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Tel Hashomer Hospital,
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇, President and CEO
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Phone: ▇▇▇▇ ▇ ▇▇▇ ▇▇ ▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: + ▇▇▇ ▇ ▇▇▇ ▇▇ ▇▇
Email: ▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ Email: ▇▇▇▇▇▇.▇▇▇▇@▇▇▇▇▇.▇▇▇
With a copy to: With a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Adv.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇ LLP Meitar, Liquornik, Geva & Leshem,
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
Israel
25. ENTIRE AGREEMENT
This Agreement and the Investigational Agreement constitute the entire
agreement between the Parties with respect to the subject matter hereof and
supersede and replace all prior agreements, understandings, writings and
discussions between the Parties. The Parties acknowledge and agree that
neither of the Parties is entering into this Agreement on the basis of any
representations or promises not expressly contained herein. It is agreed
that no usage of trade or other regular practice or method of dealing
between the Parties hereto shall be used to modify, interpret, supplement,
or alter in any manner the terms of this Agreement. This Agreement may not
be changed in any way except by an instrument in writing singed by both
Parties.
26. CAPTIONS
The captions in this Agreement are solely for convenience of reference and
shall not be used for purposes of interpreting or construing the provisions
hereof.
27. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, but all of which together shall
constitute one and the same agreement.
28. SURVIVAL OF CERTAIN PROVISIONS
The terms of any section which by their nature survives termination or
expiration of this Agreement shall survive the termination or expiration of
this Agreement, including without limitation Sections 4, 8 through 14, 16,
17, 18, 19 and 23.
SIGNATURES, NEXT PAGE
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 21 of 29
PORTIONS OF THIS EXHIBIT MARKED BY AN *** HAVE BEEN OMITTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives, effective on this date first set forth
above.
OMRIX BIOPHARMACEUTICALS, LTD. FFF ENTERPRISES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ By:
--------------------------------- ------------------------------------
Signature Signature
Name: ▇▇▇▇▇▇ ▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------- Title: President
Title: Date: December 21, 2005
------------------------------
Date:
-------------------------------
EXHIBITS
Exhibit A: Supply and Distribution Agreement: Investigational Phase
Exhibit B: Biologics License Application Approval Letter
Exhibit C: DCI Contract
Exhibit D: Handling Specifications
Exhibit E: Description of Omrix's Immune Globulin Intravenous
Exhibit F: Specifications
Exhibit G: Product Purchase Price
FFF - Omrix Agreement: Commercial Phase CONFIDENTIAL Page 22 of 29
EXHIBIT A
SUPPLY AND DISTRIBUTION AGREEMENT: INVESTIGATIONAL PHASE
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EXHIBIT B
BIOLOGICS LICENSE APPLICATION APPROVAL LETTER
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EXHIBIT C
DCI CONTRACT
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EXHIBIT D
HANDLING SPECIFICATIONS
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EXHIBIT E
DESCRIPTION OF OMRIX'S IMMUNE GLOBULIN INTRAVENOUS
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EXHIBIT F
SPECIFICATIONS
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EXHIBIT G
PRODUCT PURCHASE PRICE
The Product Purchase Price shall be calculated as follows:
The per gram price is ***, based upon recovered plasma prices of (1) *** per
liter for recovered plasma frozen within 24 hours after phlebotomy ("24 Hour
Plasma") and (2) *** per liter for recovered plasma frozen within 72 hours after
phlebotomy ("72 Hour Plasma"). Assuming that the proportion of 24 Hour Plasma
and 72 Hour Plasma is 80% 24 Hour Plasma and 20% 72 Hour Plasma, the weighted
average per liter price would be *** per liter (the "Weighted Average Price").
The Weighted Average Price will change based upon (1) changes in the per liter
price paid by Omrix under its supply arrangements and (2) the then current
proportions of 24 Hour Plasma and 72 Hour Plasma.
Accordingly, the Purchase Price will be adjusted in an amount equal to *** of
the change in the Weighted Average Price per liter. For example, if the Weighted
Average Price per liter for recovered plasma increases/decreases by *** per
liter, then the corresponding increase/decrease in the Purchase Price per gram
will be ***.
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