AMENDED AND RESTATED
PROCESSING AGREEMENT BETWEEN
OSTEOTECH, INC.
AND
MUSCULOSKELETAL TRANSPLANT FOUNDATION
AND
BIOCON, INC.
***Indicates the omission of confidential material pursuant to a request for
confidential treatment made in accordance with Rule 24b-2 under the Securities
Exchange Act of 1934, as amended. The confidential material is being filed
separately with the Secretary to the Securities and Exchange Commission.
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TABLE OF CONTENTS
Page
1. DELIVERY AND PROCESSING OF TISSUE..........................................1
1.1 MTF COMMITMENT TO DELIVER TISSUE FOR PROCESSING.......................1
1.1.1 ENGAGEMENT OF OSTEOTECH......................................1
1.1.2 COMMITMENT TO DELIVER TISSUE FOR PROCESSING..................1
1.1.3 DELIVERY OF TISSUE FOR PROCESSING OF
GRAFTON(R) DBM PRODUCTS AND BIOIMPLANTS......................3
1.1.4 COSTS OF PROCUREMENT AND DELIVERY. AS BETWEEN THE
PARTIES HERETO, MTF SHALL BE RESPONSIBLE FOR THE
COSTS OF PROCURING, SCREENING, TESTING, STORING,
AND DELIVERY OF TISSUE TO OSTEOTECH FOR PROCESSING...........5
1.1.5 COMPLIANCE WITH APPLICABLE STANDARDS.........................5
1.1.6 DONOR RECORDS................................................8
1.2 PROCESSING RESPONSIBILITIES OF OSTEOTECH..............................9
1.2.1 GENERAL UNDERTAKING..........................................9
1.2.2 PROCESSES AND METHODS.......................................10
1.2.3 PROCESSING CONSIDERATIONS...................................10
2. STORAGE, SHIPPING, REGULATORY COMPLIANCE AND LABELING.....................12
2.1 POSSESSION AND STORAGE OF TISSUE.....................................12
2.2 SHIPPING.............................................................13
2.3 CERTAIN JOINT COMPLIANCE RESPONSIBILITIES............................14
2.4 LIABILITY............................................................15
2.5 RECORDS AND REPORTS..................................................19
2.6 NEW TISSUE FORM DEVELOPMENT..........................................20
2.7 NON-PROPRIETARY NEW PRODUCTS.........................................21
2.8 OTHER SERVICES.......................................................21
2.9 PUBLICATION AND PUBLIC DISCLOSURE OF SCIENTIFIC INFORMATION..........21
3. FINANCIAL TERMS...........................................................23
4. CONFIDENTIALITY AND CERTAIN OTHER COVENANTS...............................23
4.1 NON-DISCLOSURE OF CONFIDENTIAL INFORMATION...........................23
4.2 NON-SOLICITATION OF SALES AGENTS.....................................25
4.3 OSTEOTECH SALES AGENTS...............................................25
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4.4 SURVIVING PROVISIONS.................................................25
5. TERM OF AGREEMENT.........................................................25
6. TERMINATION...............................................................25
7. INSURANCE.................................................................26
8. FORCE MAJEURE.............................................................27
9. BINDING AGREEMENT; ASSIGNMENT.............................................27
10. NAME, EMBLEM, PACKAGING, TECHNOLOGY AND TRADEMARK.........................28
11. NOTICES...................................................................29
12. ENTIRE AGREEMENT..........................................................29
13. MODIFICATION..............................................................29
14. APPLICABLE LAW............................................................30
15. WAIVER....................................................................30
16. INDEPENDENT CONTRACTOR....................................................30
17. SEVERABILITY..............................................................30
18. SUCCESSORS................................................................30
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AMENDED AND RESTATED PROCESSING AGREEMENT
This Amended and Restated Processing Agreement (this "Agreement") is made
as of September 11, 2000 by Musculoskeletal Transplant Foundation, ("MTF"), a
nonprofit District of Columbia corporation, Biocon, Inc., a nonprofit District
of Columbia corporation and the controlling parent corporation of MTF ("Biocon";
for purposes of this Agreement the term "MTF" shall include Biocon and all
existing and future affiliates of MTF), and Osteotech, Inc. ("Osteotech"), a
Delaware corporation as follows:
WHEREAS, Osteotech provides high-quality tissue processing services
("Processing") and other related services to entities engaged in procuring and
distributing human bone and related connective soft tissue for transplantation
(collectively, "Tissue"); and
WHEREAS, MTF, directly, or by or through Biocon and/or other affiliates of
MTF, procures and distributes Tissue from various sources, and wishes to
contract with Osteotech to process such Tissue; and
WHEREAS, MTF wishes to obtain Tissue Processing services from Osteotech and
Osteotech desires to perform such Tissue Processing services for MTF under the
following agreed terms and conditions; and
WHEREAS, Osteotech and MTF are parties to a Processing Agreement dated as
of April 1, 1997 (the "Prior Processing Agreement"), and desire that this
Agreement supersede and replace the Prior Processing Agreement in its entirety
except as otherwise provided herein.
NOW, THEREFORE, the parties agree as follows:
1. DELIVERY AND PROCESSING OF TISSUE
1.1 MTF Commitment to Deliver Tissue for Processing
1.1.1 Engagement of Osteotech. MTF hereby engages Osteotech as a
provider of Tissue Processing.
1.1.2 Commitment to Deliver Tissue for Processing.
(a) Upon the effective date of this Agreement, MTF shall be
required to deliver to Osteotech a good faith forecast
of the number of donors it expects to deliver to
Osteotech for Processing in accordance with this
Agreement in each calendar month during the twelve (12)
calendar month period immediately following such
effective date. Such forecast shall be a rolling twelve
(12) calendar month forecast and MTF shall be required
to update such forecast monthly so that it always
covers a twelve (12) month period by providing
Osteotech with a good faith forecast of the number of
donors MTF expects to deliver to Osteotech for
Processing in accordance with this
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Agreement through and including the twelfth (12th)
calendar month of the twelve (12) calendar month period
commencing with the calendar month in which such
updated forecast is required to be delivered. Such
updated forecast must be received by Osteotech no later
than the first (1st) business day of each month. (For
example, on September 1, 2000 (the effective date of
this Agreement), MTF shall provide a forecast to
Osteotech which covers each of the twelve (12) months
through and including August, 2001. No later than
October 2, 2000 (the first business day of October,
2000) MTF shall deliver to Osteotech a forecast that
covers September, 2001 so that the rolling forecast
would then cover the period from October 2000 through
and including September 2001.) In the event Osteotech
fails to receive such updated forecast from MTF by the
first (1st) business day of each month, the number of
donors forecast for such twelfth (12th) month shall be
deemed to be the same number of donors forecast for the
month immediately preceding such twelfth (12th) month.
(For example, if Osteotech does not receive the twelve
(12) month forecast that includes September 2001 on or
before October 2, 2000, the number of donors forecast
for September 2001 shall be deemed to be the same
number of donors forecast for August 2001 in the prior
twelve (12) month forecast provided to Osteotech in
September 2000.)
(b) MTF shall have the right to increase or decrease the
number of donors which are projected to be delivered to
Osteotech in any month covered by MTF's forecast,
provided that MTF gives Osteotech notice of any such
change at least ninety (90) days prior to the first
(1st) business day of the month being changed.***
(c) Osteotech shall have the right to reduce the number of
donors it will process for MTF pursuant to this
Agreement as projected in MTF's forecast, provided that
Osteotech gives MTF notice of such reduction at least
ninety (90) days prior to the first (1st) business day
of the month being changed.
(d) Osteotech shall have the right to refuse to process
donors provided to it by MTF to the extent such donors
exceed the
----------
*** Indicates the omission of confidential material pursuant to the request for
confidential treatment made in accordance with Rule 24b-2 under the
Securities Exchange Act of 1934, as amended. The confidential material is
being filed separately with the Securities and Exchange Commission.
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forecast provided by MTF or based upon regulatory or
safety concerns as reasonably determined by Osteotech.
In the event Osteotech decides to refuse to process a
donor it must notify MTF of its decision to do so and
explain its reasons for doing so no later than the
close of business on the fifth (5th) business day after
Osteotech receives from MTF all required paperwork
relating to such donor. If Osteotech fails to provide
such notice of refusal to process to MTF within such
time period, Osteotech will be deemed to have accepted
such donor and will be required to process such donor
in accordance with this Agreement.
(e) ***
1.1.3 Delivery of Tissue for Processing of Grafton(R)DBM Products
and Bioimplants.
(a) At Osteotech's request, MTF shall use its Best Efforts
to provide to Osteotech for Processing (i) Tissue
suitable for Processing into Grafton(R)DBM products and
any products that are line extensions (as defined
herein) of Grafton(R)DBM products sufficient to meet
Osteotech's good faith forecast of hospital/end user
demand for such products; and (ii) Tissue suitable for
Processing into bioimplants in the form of threaded
cylinder dowels ("Bioimplants"), including without
limitation the bio-d(TM)Threaded Cortical Bone Dowel,
and any products that are line extensions of the
bio-d(TM) Threaded Cortical Bone Dowel, in each case in
quantities which are sufficient to meet Osteotech's
good faith forecast of hospital/end user demand for
such products. For purposes of this Agreement,
Grafton(R)DBM products and Bioimplants and any line
extensions of such products are referred to as
"Proprietary Products." MTF may request that Osteotech
provide reasonable supporting information for any
Proprietary Product forecast that MTF disputes in good
faith. If such supporting information is confidential,
Osteotech may require that it be revealed only to a
mutually agreeable third party as contemplated in
Section 1.1.5(d) hereof. The parties agree to use their
respective Best Efforts to resolve any disputes
regarding such forecasts.
----------
*** Indicates the omission of confidential material pursuant to the request for
confidential treatment made in accordance with Rule 24b-2 under the
Securities Exchange Act of 1934, as amended. The confidential material is
being filed separately with the Securities and Exchange Commission.
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(b) ***
(c) ***
(d) MTF shall screen Donors using criteria provided by
Osteotech to determine which Tissue is suitable for
Grafton(R) DBM products and which Tissue is suitable
for Bioimplants. Notwithstanding anything to the
contrary contained herein, if MTF determines in good
faith that Tissue which would satisfy such criteria is
necessary to meet the demand for other products
processed for MTF by Osteotech pursuant to this
Agreement, MTF may direct Osteotech to process such
Tissue for such other products rather than for
Grafton(R) DBM products or Bioimplants.***
(e) For purposes of this Agreement, "line extension" shall
mean, with respect to Osteotech's Grafton(R) DBM and
bio-d(TM) products in existence as of the date of this
Agreement ("Current Proprietary Products"), any
derivative or variation of a Current Proprietary
Product that is processed from substantially the same
Tissue components, is of substantially the same
configuration and function as the Current Proprietary
Product from which it is derived, and has a comparable
monetary yield per donor (plus or minus 20%) as the
Current Proprietary Product from which it is derived.
In the event Osteotech shall develop a line extension
of a Current Proprietary Product, it shall provide MTF
with a good faith estimate of the expected sales of
such new product for the initial six (6) months of its
commercialization.***
----------
*** Indicates the omission of confidential material pursuant to the request for
confidential treatment made in accordance with Rule 24b-2 under the
Securities Exchange Act of 1934, as amended. The confidential material is
being filed separately with the Securities and Exchange Commission.
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(f) For purposes of this Agreement, "Best Efforts" shall
mean, as to a party hereto, an undertaking by such
party to perform or satisfy an obligation or duty or
otherwise act in a manner reasonably calculated to
obtain the intended result by action or expenditure not
disproportionate or unduly burdensome in the
circumstances.
(g) Notwithstanding anything to the contrary contained
herein, it is the intent of the parties to act in good
faith and use their Best Efforts to not allow
back-orders or inventory shortfalls to occur and to
elimnate back-orders and inventory shortfalls when they
do occur as soon as possible.***
(h) For purpose of this Agreement, inventory shall include
inventory maintained at both MTF and Osteotech.***
(i) *** The parties agree to use their respective Best
Efforts to resolve any dispute as to whether a specific
Proprietary Product is anatomically unfeasible to
produce.
1.1.4 Costs of Procurement and Delivery. As between the parties
hereto, MTF shall be responsible for the costs of procuring,
screening, testing, storing, and delivery of Tissue to Osteotech for
Processing.
1.1.5 Compliance With Applicable Standards.
(a) Compliance with Recovery Standards. All Tissue
delivered to Osteotech for Processing pursuant to this
Agreement shall conform to all standards, guidelines,
rules, regulations and laws applicable to the donation,
recovery, and suitability of Tissue (the "Recovery
Standards"). The Recovery Standards shall include
applicable standards and requirements relating to donor
----------
*** Indicates the omission of confidential material pursuant to the request for
confidential treatment made in accordance with Rule 24b-2 under the
Securities Exchange Act of 1934, as amended. The confidential material is
being filed separately with the Securities and Exchange Commission.
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referral, informed consent, tissue recovery,
pre-processing storage, packaging and shipping of
pre-processed Tissue and all records, activities and
standards related to obtaining, testing, documenting
and evaluating serological test results; obtaining,
documenting and evaluating medical history and
lifestyle data; and related organizational, management
and quality assurance activities as may be contained in
(i) applicable laws, regulations, and guidelines of the
United States Food and Drug Administration ("FDA");
(ii) applicable standards and guidelines promulgated by
the American Association of Tissue Banks ("AATB");
(iii) applicable laws and regulations of other U.S.
federal, state and local government agencies with
jurisdiction over the procurement and distribution of
human musculoskeletal tissue; (iv) applicable laws and
regulations of non-U.S. jurisdictions where such Tissue
Processed by Osteotech is procured pursuant to this
Agreement or distributed by or on behalf of MTF; (v)
MTF's standard operating procedures ("SOPs"), as may be
amended from time to time by MTF; and (vi) Osteotech's
standards for recovered Tissue, to the extent
applicable to MTF-supplied Tissue, as specified in
Osteotech's SOPs, as may be amended from time to time
by Osteotech and as provided to MTF in advance of their
effectiveness. If interpretation of the Recovery
Standards is required or if there is a disagreement
about the interpretation of the Recovery Standards, MTF
and Osteotech will attempt to negotiate a resolution in
good faith. If such interpretations or disagreements
are not resolved by the parties, the parties will
mutually agree to a third party who will assist the
parties in arriving at a resolution.
(b) Compliance with Applicable Processing Standards. MTF
shall comply with the Processing Standards (as
hereinafter defined) to the extent applicable to MTF's
activities as contemplated hereunder.
(c) Standard Operating Procedures. Each of MTF and
Osteotech shall make available to the other a copy of
its SOPs and copies of any material amendments to its
SOPs promptly after such material amendments are
adopted; provided, however, that doing so will not
require such party to disclose any trade secrets,
technical know how or unpublished scientific data or
technical art to the other party.
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(d) Reciprocal Audit Rights.
(i) Upon reasonable notice and at its own expense, each
of Osteotech, on the one hand, and MTF, on the other
hand, shall have the right to conduct an annual audit
of the other party's facilities and records related to
regulatory compliance and, in the event there are
repeated significant defects in such other party's
compliance with its SOPs or any applicable Recovery
Standards or Processing Standards, as the case may be,
each of Osteotech, on the one hand, and MTF, on the
other hand, may conduct such additional audits of the
other party's facilities and records related to
regulatory compliance as are reasonably necessary to
ensure that such defects have been rectified.
Notwithstanding the foregoing, in any such audit MTF
will be entitled to review Osteotech's records only to
the extent such records relate to donors delivered to
Osteotech for Processing pursuant to this Agreement and
Osteotech will be entitled to review MTF's records only
to the extent such records relate to donors delivered
to Osteotech for Processing pursuant to this Agreement.
(ii) Osteotech will grant designated MTF personnel
access to its facilities to observe all steps of
Processing for the purpose of conducting a standard MTF
inspection of Osteotech's compliance with the
Processing Standards conducted pursuant to this Section
1.1.5(d). As part of this inspection, all Processing
Standards will be made available to the inspectors;
provided, that such access will not require Osteotech
to reveal any proprietary know-how or trade secrets
unless it is necessary to MTF's understanding of
whether Osteotech is in compliance with the Processing
Standards and to the extent applicable to Osteotech,
the Recovery Standards, and then, in such case, such
information and documents shall be revealed only to a
mutually agreeable third party. Such third party will
have access to such proprietary know-how and trade
secrets only if it signs a confidentiality agreement
satisfactory to Osteotech. If such personnel require
access to Osteotech's clean rooms, the personnel must
have on file with Osteotech appropriate blood serum
test results and such other appropriate test results as
Osteotech may require prior to such personnel being
granted access to Osteotech's clean rooms. Osteotech
may, at its sole discretion, refuse any individual
access to Osteotech's clean rooms for cause. Such
denial of access will not be a violation of this
Agreement
(iii) MTF will grant designated Osteotech personnel
access to its facilities to observe MTF's Tissue
recovery activities for the
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purpose of conducting a standard Osteotech inspection
of MTF's compliance with the Recovery Standards and to
the extent applicable to MTF, the Processing Standards
pursuant to this Section 1.1.5(d). As part of this
inspection, all Recovery Standards will be made
available to the inspectors; provided, that such access
will not require MTF to reveal any proprietary know-how
or trade secrets unless it is necessary to Osteotech's
understanding of whether MTF is in compliance with the
Recovery Standards and to the extent applicable to MTF,
the Processing Standards, and then, in such case, such
information and documents shall be revealed only to to
a mutually agreeable third party. Such third party will
have access to such proprietary know-how and trade
secrets only if it signs a confidentiality agreement
satisfactory to MTF
(e) Meetings. Osteotech will arrange with MTF to hold
regular meetings to discuss Processing and other
related issues. At these meetings the following
information will be discussed, along with any other
relevant information related to the Processing
Standards and Recovery Standards, the approval of
donors for Processing and the release of donors for
Processing: Donors released month to date, Grafton(R)
DBM product releases, Bioimplant releases, rework list,
unprocessed Donor list at Osteotech, Grafton(R) DBM
products and Bioimplants WIP lists, and list of raw
Tissue at Osteotech for Grafton(R) DBM products,
Bioimplants and other demineralized Tissues.
(f) Serology Testing. MTF shall be responsible for the
performance of all serology testing on each donor
procured pursuant to this Agreement which shall be
performed by a laboratory certified by the Department
of Health and Human Services under the Clinical
Laboratory Improvement Amendments of 1988. The results
of such tests will be forwarded to Osteotech promptly
in accordance with the Recovery Standards and the
Processing Standards. In addition, if MTF becomes aware
of adverse test results from tests performed by another
party (e.g. eye bank, etc.) on tissue or organs
obtained from a donor procured by MTF and to be
processed by Osteotech, MTF shall notify Osteotech of
such test results promptly after MTF becomes aware of
such test results.
1.2 Donor Records
(a) MTF will obtain and maintain complete and accurate
records as required of MTF by the Recovery Standards
(including without
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limitation Donor medical history, Donor life style
information, serology and blood culture testing), as
well as records with respect to (i) inventory of Tissue
shipped to Osteotech pursuant to this Agreement; (ii)
inventory of Tissue processed pursuant to this
Agreement and received by MTF from Osteotech; and (iii)
the receipt and processing of all end user orders
received from MTF's customers who utilize the Tissue
processed by Osteotech pursuant to this Agreement.
(b) MTF shall also obtain and forward to Osteotech, in
English, such records, within the requisite time
period, as may be reasonably necessary to satisfy all
of the Processing Standards, including, but not limited
to, Donor medical history, donor life style information
and all donor testing information.
(c) In the event any regulatory agency audits or otherwise
inspects MTF's facilities or records and requires
information maintained by Osteotech relating to the
Processing of MTF Tissue by Osteotech, Osteotech will
provide MTF with such information as is necessary to
satisfy any such request by any such regulatory agency.
(d) In the event any regulatory agency audits or otherwise
inspects Osteotech's facilities or records and requires
information maintained by MTF relating to MTF's
recovery, screening and testing of Tissue Processed for
MTF by Osteotech, MTF will provide Osteotech with such
information as is necessary to satisfy any such request
by any such regulatory agency.
1.2 Processing Responsibilities of Osteotech
1.2.1 General Undertaking
(a) Processing and packaging of Tissue received by
Osteotech pursuant to Section 1.1.2 into then currently
available finished units of Tissue shall be conducted
by Osteotech pursuant to the Processing Standards in
accordance with Section 1.2.2. For purposes hereof,
Processing shall include all operations necessary to
prepare procured Tissue for transplantation.
(b) Osteotech shall, upon reasonable prior written notice
from MTF and subject to MTF's compliance with its
obligations under Section 1.1.3 hereof, permit MTF to
change the production plan for a donor determined
pursuant to Section 1.2.3(a).
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1.2.2 Processes and Methods
(a) Processing of Tissue will be performed by Osteotech
under applicable Processing Standards. "Processing
Standards" shall mean all standards, guidelines, rules,
regulations and laws applicable to the Processing,
storage, packaging, labeling, and shipping of Tissue by
Osteotech. The Processing Standards shall include (i)
applicable laws, regulations, and guidelines of the
FDA; (ii) applicable standards and guidelines
promulgated by the AATB; (iii) applicable laws and
regulations of other U.S. federal, state and local
government agencies with jurisdiction over the
processing and distribution of human musculoskeletal
tissue; (iv) applicable laws and regulations of
non-U.S. jurisdiction where Tissue processed by
Osteotech is procured or distributed by or on behalf of
MTF; (v) MTF's SOPs, as may be amended from time to
time by MTF and as provided to Osteotech in advance of
their effectiveness; and (vi) Osteotech's SOPs. If
interpretation of the Processing Standards is required
or if there is a disagreement about the interpretation
of the Processing Standards, MTF and Osteotech will
attempt to negotiate a resolution in good faith. If
such interpretations or disagreements are not resolved
by the parties, the parties will mutually agree to a
third party who will assist the parties in arriving at
a resolution.
(b) In the event the FDA, any other applicable regulatory
agency or the AATB, implements new or additional
regulations applicable to Tissue, Osteotech and MTF
shall each implement such changes to its SOPs as are
necessary to comply with such regulations. In the event
Osteotech is unable or unwilling to implement such
changes, MTF shall have the remedy set forth in Section
6.3 and in the event MTF is unable or unwilling to
implement such changes, Osteotech shall have the remedy
set forth in Section 6.3.
1.2.3 Processing Considerations
(a) Subject to MTF's compliance with its obligations under
Section 1.1.3 hereof, MTF will pre-plan, including a
written primary and secondary donor plan, the expected
production from each donor at least three (3) working
days prior to the scheduled day of Processing. Upon
inspection of the Tissue in the Processing Rooms, if
the Tissue cannot be processed according to either the
primary or secondary donor plan Osteotech will use its
Best Efforts to process the donor in accordance with
prior general guidelines to maximize the yield from the
donor.
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(b) Osteotech may present valid evidence to MTF if
Osteotech determines that FDA, AATB or other applicable
government agency mandated changes in processing
techniques or the quality and condition of MTF Tissue
prevents the achievement of the planned yield provided
for in subsection (a). The parties agree to discuss the
implications of such parameters and to determine a
reasonable yield based on such new requirements.
(c) MTF and Osteotech shall each undertake reasonable
efforts to present a consistent flow of donors and
Tissue to the other with the goal of minimizing
second-half-of-month bunching of Donors and Tissue.
Subject to the foregoing sentence and to Osteotech's
right to refuse to process donors pursuant to Section
1.1.2(d) hereof, donors received at Osteotech for
Processing pursuant to this Agreement will be processed
within a reasonable period of time (which shall be
reviewed at the meetings provided for in Section
1.1.5(e)) from the time all required, complete and
accurate donor documentation as specified by the
Processing Standards is received at Osteotech. Subject
to the foregoing, Osteotech will use commercially
reasonable efforts to complete the Processing of Tissue
delivered to it pursuant to this Agreement and deliver
such processed Tissue to MTF within a reasonable period
of time. Once Processing of the donor is complete,
subject to the provisions of Section 2.1, all Tissue
will be shipped to MTF upon final inspection and
release thereof by Osteotech's Quality Assurance
Department. Osteotech will advise MTF no later than the
following business day if there will be a material
delay in the commencement of Processing of donors which
have been released from Osteotech's Quality Assurance
Department.
(d) If the release of processed Tissue back to MTF is
delayed due to (i) Tissue histology of unknown
etiology; or (ii) microbial contamination of final
product, Osteotech will notify MTF of the reason for
the hold and the approximate time period expected for
the hold (in weeks).
(e) Osteotech will maintain a quality assurance program,
the goal of which is to achieve zero defect Processing.
To the extent there are rejects of Tissue, it is
Osteotech's goal that such rejects of Tissue be no more
than an average of five per cent (5%) of Tissue
initially processed per Donor (not taking into account
any reworks). All rejected Tissue that can be reworked
will be reworked and returned to MTF within ten (10)
weeks from the time of rejection.
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(f) MTF shall use its Best Efforts to establish and
maintain a queue of planned donors at Osteotech's
facility to insure that there are enough donors to meet
each week's donor Processing requirements in accordance
with the forecast provided pursuant to Section 1.1.2
hereof, provided however that MTF will be deemed to
have satisfied its obligation under this Section
1.2.3(f) if it fails to maintain such a queue of donors
as a result of an event or condition that is not within
the control of MTF.
2. STORAGE, SHIPPING, REGULATORY COMPLIANCE AND LABELING
2.1 Possession and Storage of Tissue
(a) Tissue delivered to Osteotech for Processing pursuant
to this Agreement and any finished units or other
byproducts derived from such Tissue shall be held by
Osteotech on behalf of MTF at all times until delivery
thereof to MTF or pursuant to MTF's instructions,
except that MTF may grant Osteotech written permission
to use excess Tissue for research purposes. In
accordance with the National Organ Transplant Act and
the Uniform Anatomical Gift Act (i) neither MTF nor
Osteotech shall buy, sell, or trade banked human
tissue; and (ii) MTF and Osteotech may market recovery,
testing, processing, storage, distribution and other
services in compliance with state and federal law and
in accordance with the terms of this Agreement.
(b) To the extent Osteotech stores any Tissue delivered to
it pursuant to this Agreement, including but not
limited to MTF Grafton(R) DBM and Bioimplants
inventory, such storage shall be in compliance with all
applicable portions of the Processing Standards. Except
as provided in Section 2.1(c) and Section 2.2(e)
hereof, MTF shall bear the risk of loss for all Tissue
delivered to Osteotech pursuant to this Agreement.
(c) ***
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*** Indicates the omission of confidential material pursuant to the request for
confidential treatment made in accordance with Rule 24b-2 under the
Securities Exchange Act of 1934, as amended. The confidential material is
being filed separately with the Securities and Exchange Commission.
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2.2 Shipping
(a) Except as otherwise provided in a written document
signed by both Osteotech and MTF and other than
demineralized bone, Tissue used for Grafton(R) DBM
products or Bioimplants and items being reworked,
Osteotech shall ship all finished units of Tissue
derived from a Donor received for Processing pursuant
to this Agreement to MTF in one shipment by a carrier
designated by MTF. Osteotech shall ship finished units
of Grafton(R) DBM products and Bioimplants processed by
Osteotech pursuant to this Agreement to MTF upon
release from Osteotech's Quality Assurance Department,
except that in the case of finished units of MTF
Grafton(R) DBM products and Bioimplants inventory which
have been released by Osteotech's Quality Assurance
Department, Osteotech will ship such units to MTF upon
and in accordance with MTF's order. Any item being
reworked will be shipped back to MTF as soon as it is
completed and released by Osteotech's Quality Assurance
Department. MTF shall be responsible for payment of all
shipping costs.
(b) Osteotech shall ship all finished units of Tissue in
shipping containers which meet the requirements
specified in the Processing Standards. All packaging
and shipping containers must be validated and the
validation studies shall be available for review by
MTF's Quality Assurance and Regulatory Affairs
Departments.
(c) Osteotech shall clearly label each shipping container
as containing transplantable tissue and with the
addresses of both the shipping and receiving facility.
Such labeling shall meet the specifications included in
the Processing Standards.
(d) Each shipment from Osteotech shall include a packaging
slip listing the contents and corresponding donor lot
and batch numbers, if applicable. All tissue containers
in each shipment shall be packed with sufficient
materials between containers so that breakage will be
minimized.
(e) MTF will promptly notify Osteotech of any damage to the
finished units of Tissue during shipment thereof.
Osteotech will file a claim against the shipping
carrier for the amount of damage up to the amount
insured. The amount recovered from the shipping carrier
for claims will be passed on to MTF within ten (10)
days of receipt by Osteotech. Osteotech shall have no
liability for any damage to finished Tissue incurred
during shipping, except to the extent Osteotech fails
to ensure that the shipping carrier has the
aforementioned insurance or except where such damage is
caused by the negligence or misconduct of Osteotech or
its agents (other than the carrier) or employees.
E-16
(f) Osteotech shall pay for shipping, and related costs
arising from the return of finished units of Tissue to
Osteotech due to complaints which are shown to have
been caused by defects in Osteotech's workmanship or
Osteotech's failure to comply with the Processing
Standards, except for Tissue damaged during shipment,
as specified in (e) above.
2.3 Certain Joint Compliance Responsibilities
(a) MTF shall comply with applicable laws, regulations and
guidelines as required under Section 1.1.5 Osteotech
shall comply with applicable laws, regulations and
guidelines as required under Section 1.2.2. In
instances where the party's compliance responsibilities
overlap, or where otherwise necessary and appropriate,
each party shall use its Best Efforts to cooperate with
and assist the other party in such other party's
regulatory compliance activities. If a difference
arises as to which party is responsible for meeting a
particular regulatory compliance responsibility, MTF
and Osteotech will attempt to negotiate a resolution in
good faith. If the difference is not resolved by the
parties, MTF and Osteotech will agree on a third party
who will assist the parties in arriving at a
resolution. Notwithstanding the foregoing, it is agreed
that both MTF and Osteotech shall have regulatory
compliance responsibility with respect to labeling,
including without limitation, product inserts, label
content, sales sheets, advertising and product brochure
wording and marketing clearance. If a difference arises
with regard to such joint compliance responsibilities,
MTF and Osteotech will attempt to negotiate a
resolution in good faith. If the difference is not
resolved, MTF and Osteotech will agree on a third party
who will assist the parties in arriving at a
resolution.
(b) Containers of finished units of Tissue processed by
Osteotech for MTF must bear a standard MTF bone product
label, approved by Osteotech and MTF, that contains the
product name and identity code, donor number and
expiration date.
(c) Osteotech shall bear the costs of producing labels in
conformance with the Processing Standards. If the
labels and/or package inserts are changed by request of
▇▇▇, ▇▇▇ will bear the costs of these changes,
including label inventory replacements.
(d) All labeling will be in accordance with Sections
2.2(c), 2.2(d) and the Processing Standards.
(e) Specifications for all Tissue products to be processed
from MTF donors will be developed and approved
according to MTF and Osteotech SOPs. Requests to
Osteotech about its ability to accomplish special
specifications and for labeling changes, including
package inserts, will be made in writing
E-17
by MTF and will receive a written response from
Osteotech within a reasonable period of time.
2.4 Liability
(a) Indemnification by Osteotech. Osteotech agrees to
defend, hold harmless, and indemnify MTF and its member
organizations against any damages, litigation costs,
losses, obligations, liabilities, claims, actions or
causes of action sustained or suffered by MTF or any of
its member organizations arising from (i) a breach or
default by Osteotech of any of its representations,
warranties or covenants contained in this Agreement;
(ii) a defect in any finished unit of Tissue processed
by Osteotech under this Agreement to the extent such
defect results from an error or omission by Osteotech
(including any employee or agent of Osteotech or other
person to whom Osteotech has delegated any Processing
activities or any Processing related activities
hereunder), or from a failure of workmanship, by
Osteotech; (iii) any medical claim made by any employee
or authorized agent of Osteotech regarding any MTF
Tissue processed by Osteotech (A) which is required by
applicable laws or regulations to be approved by a
relevant regulatory agency and has not been so approved
and/or (B) which is not supported by credible objective
scientific evidence; or (iv) a false and misleading
representation made by any employee or authorized agent
of Osteotech regarding any MTF Tissue processed by
Osteotech.
(b) Indemnification by MTF. MTF agrees to defend, hold
harmless, and indemnify Osteotech against any damages,
litigation costs, losses, obligations, liabilities,
claims, actions or causes of action sustained or
suffered by Osteotech arising from (i) a breach or
default by MTF of any of its representations,
warranties or covenants contained in this Agreement;
(ii) a defect in any finished unit of Tissue processed
by Osteotech under this Agreement to the extent such
defect results from an error or omission by MTF
(including any employee or agent of MTF or other person
to whom MTF has delegated any Tissue recovery or
distribution activities or any Tissue recovery or
distribution related activities hereunder), in
connection with its Tissue recovery and distribution
activities, including without limitation any testing
performed by or at the direction of MTF; (iii) any
medical claim made by any employee or authorized agent
of MTF regarding any MTF Tissue processed by Osteotech
(A) which is required by applicable laws or regulations
to be approved by a relevant regulatory agency and has
not been so approved and/or (B) which is not supported
by credible objective scientific evidence; or (iv) a
false and misleading representation made by any
employee or authorized agent of MTF regarding any MTF
Tissue processed by Osteotech.
(c) Indemnification Procedures. For purposes of subsection
(a) above, Osteotech shall be the "indemnifying party"
and MTF shall be the
E-18
"indemnified party" and for the purposes of subsection
(b) above, MTF shall be the "indemnifying party" and
Osteotech shall be the "indemnified party." The
obligations and liabilities of the indemnifying party
hereunder with respect to claims resulting from the
assertion of liability by third parties shall be
subject to the following terms and conditions:
(i) The indemnified party shall give written notice to
the indemnifying party of any assertion of
liability by a third party which might give rise
to a claim by the indemnified party against the
indemnifying party based on the indemnity
contained in Section 2.2(a) hereof, or Section
2.2(b) hereof, as the case may be, stating the
nature and basis of said assertion and the amount
thereof, to the extent known, within five (5)
business days after an officer of the indemnified
party learns of the claim or receives notice
thereof. Failure to give such notice within five
(5) business days may, at the indemnifying party's
option, result in a reduction in any subsequent
indemnification payment by an amount equivalent to
the expenses and/or losses demonstrated to have
been caused by such delay in notification.
(ii) In the event any action, suit or proceeding is
brought against the indemnified party, with
respect to which the indemnifying party may have
liability under the indemnity agreement contained
in subsection (a) or (b) hereof, as the case may
be, the action, suit or proceeding shall, upon the
written agreement of the indemnifying party that
it is obligated to indemnify under the indemnity
agreement contained in subsection (a) or (b)
hereof, as the case may be, be defended (including
all proceedings on appeal or for review which
counsel for the defendant shall deem appropriate)
by the indemnifying party. The indemnified party
shall have the right to be represented by advisory
counsel and accountants, at its own expense, and
shall be kept fully informed of such action, suit
or proceeding at all stages thereof, whether or
not it is so represented. The indemnifying party
shall make available to the indemnified party and
its attorneys and accountants all books and
records of the indemnifying party relating to such
proceedings or litigation. The parties will render
to each other such assistance as they may
reasonably require in order to ensure the proper
and adequate defense of any such action, suit or
proceeding.
(iii) The indemnifying party shall not make any
settlement of any claims without the written
consent of the indemnified party, which consent
shall not be unreasonably withheld or delayed.
(iv) The indemnified party shall not make any
settlement of any claims without the written
consent of the indemnifying party.
E-19
(d) Release of Claims by MTF. Except for: (1) sums and
monies which are due or owing to MTF from Osteotech in
the ordinary course of its business relations with
Osteotech; (2) any claims based upon Osteotech's misuse
or infringement of any intellectual propoerty of MTF;
(3) Osteotech's obligations under Section 2.2
(Liability and Indemnification) of the Prior Processing
Agreement (it being understood that notwithstanding any
other provision herein to the contrary, the provisions
of Section 2.2 of the Prior Processing Agreement shall
survive in accordance with their terms with respect to
any facts, events, actions or omissions which occurred
or arose during the term of the Prior Processing
Agreement); (4) Osteotech's obligations under Section
4.1 (Confidentiality) of the Prior Processing Agreement
(it being understood that notwithstanding any other
provision herein to the contrary, the provisions of
Section 4.1 of the Prior Processing Agreement shall
survive in accordance with their terms with respect to
any facts, events, actions or omissions which occurred
or arose during the term of the Prior Processing
Agreement, including without limitation any such facts,
events, actions or omissions which relate to any
Confidential Information of MTF disclosed to Osteotech
during the term of the Prior Processing Agreement); and
(5) Osteotech's obligations under this Agreement that
arise on and after the date of this Agreement; MTF on
behalf of and for itself and its subsidiaries,
affiliates, parents, employees, officers, directors,
employees, shareholders, successors and assigns hereby
freely and unconditionally releases, acquits and
forever discharges Osteotech and its parents,
subsidiaries, affiliates, employees, directors,
officers, shareholders, successors and assigns from any
and all manner of actions, causes of action, claims,
obligations, demands, damages, costs, expenses,
compensation or other relief, whether known or unknown,
whether in law or equity, based upon any breach or
default by Osteotech of any provision, covenant,
representation or obligation of or under the Prior
Processing Agreement. MTF represents and warrants to
Osteotech that neither Biocon nor MTF have heretofore
assigned or transferred, or purported to assign or
transfer, any claim, obligation, demand, debt,
liability or cause of action herein released.
E-20
(e) Release of Claims by Osteotech. Except for: (1) sums
and monies which are due or owing to Osteotech from MTF
in the ordinary course of its business relations with
MTF, including without limitation any fees for
Processing owed by MTF to Osteotech under the Prior
Processing Agreement; (2) any claims based upon or
arising out of MTF's misuse or infringement of any
intellectual property of Osteotech; (3) MTF's
obligations under Section 2.2 (Liability and
Indemnification) of the Prior Processing Agreement (it
being understood that notwithstanding any other
provision herein to the contrary, the provisions of
Section 2.2 of the Prior Processing Agreement shall
survive in accordance with their terms with respect to
any facts, events, actions or omissions which occurred
or arose during the term of the Prior Processing
Agreement); (4) MTF's obligations under Section 4.1
(Confidentiality) of the Prior Processing Agreement (it
being understood that notwithstanding any other
provision herein to the contrary, the provisions of
Section 4.1 of the Prior Processing Agreement shall
survive in accordance with their terms with respect to
any facts, events, actions or omissions which occurred
or arose during the term of the Prior Processing
Agreement, including without limitation any such facts,
events, actions or omissions which relate to any
Confidential Information of Osteotech disclosed to MTF
during the term of the Prior Processing Agreement); and
(5) MTF's obligations under this Agreement that arise
on and after the date of this Agreement; Osteotech on
behalf of and for itself and its subsidiaries,
affiliates, parents, employees, shareholders,
successors and assigns hereby freely and
unconditionally releases, acquits and forever
discharges MTF and its parents, subsidiaries,
affiliates, employees, directors, officers,
shareholders, successors and assigns from any and all
manner of actions, causes of action, claims,
obligations, demands, damages, costs, expenses,
compensation or other relief, whether known or unknown,
whether in law or equity, based upon any breach or
default by MTF of any provision, covenant,
representation or obligation of or under the Prior
Processing Agreement. Ostoetech represents and warrants
to MTF that Ostoetech has not heretofore assigned or
transferred, or purported to assign or transfer, any
claim, obligation, demand, debt, liability or cause of
action herein released.
(f) Covenant Not to ▇▇▇. MTF and Osteotech each agree and
covenant to the other that with regard to those matters
which it has released as described herein, it will
never institute a lawsuit or administrative proceeding,
nor will it assert any claim of any nature against any
person or entity hereby released with regard to any
such matters which have been released.
E-21
(g) Settlement. This Agreement effects the settlement of
potential claims which are denied and contested.
Nothing contained herein shall be construed as an
admission by any party hereto of any liability of any
kind to any other party. Each of the parties hereto
denies any liability in connection with any claim and
intends hereby solely to avoid litigation and establish
the basis for a mutually beneficial continuation of the
business relationship between the parties.
(h) Settlement Negotiations. All actions taken and
statements made by the parties hereto or their
representatives relating to their participation in
drafting this Agreement, including its development and
implementation, were taken and made in the context of
privileged settlement negotiations, and shall be
without prejudice or value as precedent, and shall not
be taken as a standard by which other matters may be
judged or against which other matters may be compared.
Neither this Agreement nor statements made in
negotiations of it shall be used by any party hereto,
or any third-party in any court or tribunal or formal
or informal dispute resolution proceedings, mediation,
or otherwise, to create or interpret any obligations by
any party under this Agreement.
(i) The provisions of this Section 2.4 shall survive
termination of this Agreement.
2.5 Records and Reports
(a) Osteotech shall maintain complete and accurate records
concerning Tissue received by Osteotech pursuant to
this Agreement, Tissue processed pursuant to this
Agreement and in storage at Osteotech and finished
units of Tissue stored and shipped by Osteotech
pursuant to this Agreement. Such records shall be
available to MTF during normal business hours upon
reasonable advance notice at MTF's expense. Osteotech
shall not be required to produce any data other than
data which it is required to obtain and maintain by the
Processing Standards.
(b) In addition to the information provided in subsection
(a), Osteotech shall provide the following reports on
each MTF donor in a timely manner showing Tissue
processed and shipped by Osteotech:
Daily Reports
List of donor Releases to MTF
Weekly Reports
Pending donor List
E-22
Listing of donors processed during prior week with
detailed processing notes
Monthly Reports
Grafton(R)DBM and Bioimplants Releases by Serial Number
in inventory at Osteotech
(c) Osteotech shall ensure that all information pertaining
to MTF will be disclosed only to those Osteotech
personnel with a need-to-know who have signed
Osteotech's standard confidentiality agreement.
(d) Osteotech shall notify MTF prior to the release of any
identifying information, such as the donor identifying
number, related to any donor delivered to Osteotech
pursuant to this Agreement where such release is
legally required by a regulatory or governmental agency
or court or administrative order or subpoena. The
provisions of this Section 2.5 (d) shall survive
termination of this Agreement.
(e) In connection with the marketing and distribution of
Grafton(R) DBM products and Bioimplants, during the
course of each month and in the case of monthly
reports, no later than the tenth (10th) business day
following the end of the month, MTF shall provide to
Osteotech such reports and data as Osteotech may
reasonably request, including hospital/end user sales
of such products detailed by account.
(f) Osteotech will periodically (no less than once every
six (6) months) provide MTF with a list of the agents
who are marketing Grafton(R) DBM products and
Bioimplants that bear MTF's label and the territories
they are covering; provided such information shall be
treated as Osteotech's Confidential Information
pursuant to Section 4.1 hereof.
2.6 New Tissue Form Development
It is the understanding of MTF and Osteotech that each of them
may independently develop new Tissue forms and/or processes or improve
upon existing products and/or processes.
E-23
(a) Subject to subsection (c), Osteotech shall own all
rights, title and interest in and to all information,
technology, data, inventions, products, and processes,
conceived, made or developed solely by employees of
Osteotech as well as the intellectual property rights
based thereon, including but not limited to copyrights
and patent rights.
(b) Subject to subsection (c), MTF shall own all rights,
title and interest in and to all information,
technology, data, inventions, products, and processes,
conceived, made or developed solely by employees of MTF
as well as the intellectual property rights based
thereon, including but not limited to copyrights and
patent rights.
(c) Any joint development of information, technology, data,
inventions, products, and processes, shall be conducted
pursuant to a formal written development agreement
signed by Osteotech and MTF and a development budget
for the project agreed to in writing by Osteotech and
MTF.
(d) The provisions of this Section 2.6 shall survive
termination of this Agreement.
2.7 Non-Proprietary New Products
It is understood and agreed that Osteotech may develop new
information, technology, data, inventions, products, and processes
(collectively, "new products") on its own or jointly with its other
Tissue processing clients and that certain of such new products may
not be subject to trade secret, patent or copyright protection
("nonproprietary new products"). MTF agrees that it shall not have
access to, or the right to utilize, such non-proprietary new products
and shall not be able to cause Osteotech to process or produce such
non-proprietary new products for MTF or on MTF's behalf unless and
until MTF and Osteotech shall have executed a written agreement which
provides for such access or utilization by or on behalf of MTF.
2.8 Other Services
Osteotech may provide such services other than the Processing
services contemplated in this Agreement as are requested by MTF in
accordance with one or more separate agreements entered into between
MTF and Osteotech. Reasonable fees for such services will be
established at the time such agreements are entered into and will be
separate from the fees listed in Exhibits 3.1 and 3.2. MTF shall be
free to obtain any such services from third parties.
2.9 Publication and Public Disclosure of Scientific Information
(a) Either party shall have the right to publish or
otherwise publicly at its own expense disclose
scientific information or data developed by such party
which utilizes or relates to the other party's
technology or other proprietary or confidential
processes or information; provided, however, that
notwithstanding any other provision in this Agreement
to the contrary, no
E-24
such publication or disclosure shall be made by the
publishing party if such publication or disclosure
would result in the disclosure of information defined
as Confidential Information in Section 4.1 or would
otherwise violate or jeopardize any proprietary rights
the other party may have with respect to such
technology. Publication of jointly developed
information will be covered in a separate agreement.
(b) Within a reasonable period of time (not less than
thirty (30) days) prior to publication or other public
disclosure of the information or data described in
Section 2.9(a), the publishing party shall submit to
the other party for review a draft of the publication
or, if oral disclosure, a written copy of the remarks.
The other party shall then use Best Efforts to notify
the publishing party as soon as practicable (not to
exceed thirty (30) days from its receipt of such draft
or written copy) of (i) any reasonable changes to the
publication or disclosure it deems appropriate, which
changes the publishing party will make so long as they
do not change materially the meaning of the information
or data being disclosed or published; (ii) any error in
the information or data being disclosed, which the
publishing party shall correct upon verification of the
error; or (iii) the necessity to delay publication or
disclosure to enable the filing of any patent
application or regulatory filing if applicable, in
which event the publishing party will delay such
publication or disclosure as reasonably requested by
the other party. Management of both parties shall
attempt in good faith to resolve any disputes regarding
such publications.
(c) If there has been no mutual agreement to publish or
disclose within thirty (30) days after the other party
has received the notice and draft of the publication or
oral disclosure from the publishing party, the
publishing party shall again notify the other party in
writing of its intention to publish or disclose and may
proceed to do so fifteen (15) days after delivery of
such second notice, subject to the provisions of
Section 2.9(a).
(d) Authorship of any publication shall be determined in
accordance with normal scientific practice.
(e) The provisions of this Section 2.9 shall survive
termination of this Agreement.
E-25
3. FINANCIAL TERMS
3.1 Fees
(a) MTF will pay Osteotech Processing fees as set forth in
Section 1.1.3 and Exhibits 3.1 and 3.2.
(b) ***
3.2 Invoicing and Payment
(a) Osteotech shall submit invoices in U.S. dollars to MTF for
all Processing services rendered in accordance with the then
existing fee schedule. The invoice date shall be the date
that Osteotech's Quality Assurance Department releases the
finished units of Tissue for shipment to MTF or the date of
shipment of Grafton(R) DBM products or Bioimplants, as the
case may be.
(b) MTF will pay all invoices within forty-five (45) days of the
invoice date. In the event there is an error in an invoice
submitted to it by Osteotech, MTF shall notify Osteotech of
such error within three (3) business days of the date such
invoice is received by MTF and the invoice date will then be
the date of the corrected invoice submitted by Osteotech.
All such payments shall be in U.S. dollars.
(c) Any balance of any invoice which is not paid within the time
specified above, at the option of Osteotech, shall accrue
interest at the rate of one percent (1%) per month.
4. CONFIDENTIALITY AND CERTAIN OTHER COVENANTS
4.1 Non-Disclosure of Confidential Information
(a) For purposes of this Agreement, "Confidential Information"
means all general and specific knowledge, experience and
information that is confidential and of value to MTF or to
Osteotech, including without limitation, formulations,
designs, products, processes, supplies, methods of
manufacture or processing, SOPs, cost data, master files,
the nature of research and/or development projects, as well
as data relating thereto, marketing or business plans, donor
data and financial data. It shall also
----------
*** Indicates the omission of confidential material pursuant to the request for
confidential treatment made in accordance with Rule 24b-2 under the
Securities Exchange Act of 1934, as amended. The confidential material is
being filed separately with the Securities and Exchange Commission.
E-26
mean any information disclosed to either party by any third
party which either MTF or Osteotech is obligated to treat as
confidential or proprietary.
(b) Both parties agree that neither party will, at any time,
without the express agreement of the other party, or except
as expressly permitted by this Agreement, disclose to any
other person or use any Confidential Information of the
other party, except for the purposes of performing this
Agreement or any successor Agreement or as may be required
by law, governmental regulation or court order. Information
shall not be considered to be Confidential Information of a
party if it can be established that (i) such information was
in the possession of the other party prior to disclosure to
such other party by the party claiming that it is
Confidential Information and such information is not
otherwise subject to a confidentiality agreement; (ii) such
information is then part of the public domain and became so
without the breach of this or any other confidentiality
agreement by such other party or any of its affiliates; or
(iii) such information is developed independently by such
other party or becomes known to or acquired by such other
party by means other than as a result of a breach of a
confidentiality agreement or any fiduciary obligation.
(c) MTF and Osteotech each agree to require employees,
consultants or others granted access to such Confidential
Information pursuant to Section 4.1(a) hereof to execute
appropriate confidentiality agreements; provided that each
organization's agreements are approved by such
organization's counsel.
(d) MTF and Osteotech recognize that violation in any material
respect of any provision of Section 4.1(b) may cause
irreparable injuries to Osteotech or MTF and agree that MTF
or Osteotech shall be entitled to preliminary and final
injunctive relief against such violation. Such injunctive
relief shall be in addition to, and in no way in limitation
of, any and all remedies or rights which MTF or Osteotech
shall have at law or in equity for the enforcement of the
provisions of this Section 4.1. In addition, MTF and
Osteotech agree that the party responsible for the breach of
confidentiality shall be responsible for all legal fees and
other costs and expenses incurred in the successful
enforcement of the non-breaching party's rights and remedies
under this Section 4.1.
E-27
4.2 Non-Solicitation of Sales Agents
MTF shall not engage any (i) sales agent retained by Osteotech or (ii)
any employee, independent contractor or other sales personnel affiliated
with such sales agent ("affiliated personnel"), while any such sales agent
or affiliated personnel is under contract directly or indirectly to
Osteotech and for a period of one (1) year after any such contract is
terminated, to promote or represent any form of Tissue developed, processed
or distributed by or on behalf of MTF or any of MTF's licensees, licensors,
partners or agents which competes with any of Osteotech's Proprietary
Products, including without limitation Grafton(R) DBM products or
Bioimplants.
4.3 Osteotech Sales Agents
MTF acknowledges the existence and importance of the independent sales
agent network established and maintained by Osteotech. MTF shall not be
entitled to engage independent agents to promote Osteotech's Grafton(R) DBM
products or Bioimplants distributed by MTF unless Osteotech shall have
first consented in writing to MTF engaging such agent. Osteotech shall have
full discretion to determine whether to withold or grant such consent.
4.4 Surviving Provisions
The provision of Section 4.1 and 4.2 shall survive the termination of
this Agreement in accordance with their terms.
5. TERM OF AGREEMENT
This Agreement shall become effective on September 1, 2000 (the "Effective
Date") and shall terminate on August 31, 2005; unless terminated earlier in
accordance with the provisions hereof. Either party may terminate this Agreement
as of March 31, 2002 by delivering written notice of such termination to the
other party on or before October 1, 2001. Subsequent to October 1, 2001 this
Agreement may be terminated by either party upon six (6) months prior written
notice of such termination delivered by the party seeking to terminate the
Agreement to the other party.
6. TERMINATION
6.1 Either party may terminate this Agreement at any time upon:
(a) The material breach by the other party of any of its
obligations under this Agreement, if such breach shall not
be cured within ninety (90) days after written notice
thereof is given by the non-breaching party to the
breaching, party; or
(b) An adjudication of the other party as bankrupt or insolvent;
or the admission in writing by such other party of its
inability to pay its debts as they mature; or an assignment
by such other party for the benefit of its creditors; or
such other party applying for or consenting to the
appointment of a receiver, trustee or similar officer for
its assets; or the appointment of a receiver, trustee or
similar officer for such other party's assets without the
application or consent of such other
E-28
party, if such appointment shall continue undischarged for a
period of ninety (90) days; or such other party instituting
(by petition, application, answer, consent or otherwise) any
bankruptcy, insolvency arrangement or similar proceeding
relating to it under the laws of any jurisdiction; or the
institution of any bankruptcy, insolvency arrangement or
similar proceeding relating to such other party, if such
proceeding shall remain undismissed for a period of ninety
(90) days; or the issuance or levy of any judgment, writ,
warrant of attachment or execution or similar process
against a substantial part of the property or assets of such
other party, if such judgment, writ, warrant of attachment
or execution or similar process shall not be released,
vacated or fully bonded within ninety (90) days after its
issue or levy.
6.2. MTF may terminate this Agreement at any time upon ninety (90)
days prior written notice to Osteotech if MTF makes a determination to end
its program of procuring and distributing Tissue; provided that if MTF
resumes such program at any time during the term of this Agreement it shall
provide prompt written notice of such resumption to Osteotech and this
Agreement shall become effective again in accordance with its terms as soon
as is practicable, but in no event later than ninety (90) days after such
notice is received by Osteotech.
6.3 In the event MTF enters into an agreement or arrangement with a
third party whereby finished units of Tissue processed by Osteotech for MTF
are used as part of such third party's technology or product, MTF shall
promptly inform Osteotech of its intent to enter into such agreement or
arrangement and Osteotech shall have the right to terminate this Agreement
at any time upon ninety (90) days prior written notice to MTF without any
further obligation to MTF, other than (A) Osteotech's obligations hereunder
with respect to MTF Tissue which Osteotech has begun to Process and MTF
Tissue which Osteotech has finished Processing but not yet delivered to
MTF, which obligations shall continue until all such Tissue is delivered to
MTF and (B) those obligations which otherwise survive termination of this
Agreement in accordance with their terms.
6.4 MTF may terminate this Agreement at any time upon thirty (30) days
prior written notice to Osteotech if Osteotech is unwilling or unable to
comply with the provisions of Section 1.2.2(b) to the extent such
provisions are applicable to Osteotech. Osteotech may terminate this
Agreement at any time upon thirty (30) days prior written notice to MTF if
MTF is unwilling or unable to comply with the provisions of Section
1.2.2(b) to the extent such provisions are applicable to MTF.
6.5 Osteotech may terminate this Agreement as provided in Section
1.1.3 hereof.
7. INSURANCE
(a) Osteotech shall secure and maintain in force reasonable and
adequate insurance coverage for Osteotech's Tissue Processing
activities, provided such coverage is available at reasonable
prices and terms. Osteotech has previously delivered to MTF
certificates of insurance.
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(b) MTF shall secure and maintain in force reasonable and adequate
insurance coverage of MTF Tissue recovery and distribution
activities, provided such coverage is available at reasonable
prices and terms. MTF has previously delivered to Osteotech
certificates of insurance.
(c) Osteotech shall require each subcontractor or assignee who
Processes MTF Tissue on behalf of Osteotech (if any are permitted
by MTF) to procure and maintain insurance of the types and
amounts required of Osteotech. In addition, once approved by MTF,
the subcontractor or assignees shall sign the indemnity agreement
as it appears in Section 2.4(a) in favor of MTF. If there is any
assignment to a majority owned subsidiary of Osteotech as
provided in Section 9 of this Agreement, that subsidiary shall
meet each requirement of this Section 7.
8. FORCE MAJEURE
Neither party shall be responsible to the other for nonperformance or
delayed performance of the terms and conditions hereof due to acts of God, acts
of government, wars, riots, accidents and transportation, fuel or material
shortages, or other causes (except strikes), in the nature of force majeure
which is beyond its control. To the extent Osteotech is unable to perform
Processing of MTF's Tissue due to such events, Osteotech shall arrange to have
MTF's Tissue processed under Osteotech's oversight within thirty (30) days of
the occurrence of such event.
9. BINDING AGREEMENT; ASSIGNMENT
(a) Each of Biocon and MTF represents, warrants and covenants (i)
that this Agreement does not conflict with or cause a breach of
or default under any other agreement to which either of them or
any other organization, entity or person which they control, are
controlled by, or are under common control with, either through
ownership, common management, contract or otherwise (any such
organization, entity or person being an "affiliate" for purposes
of this Agreement) is a party or is bound; and (ii) that neither
of them or any of their affiliates will enter into any agreement
which would conflict with or interfere with MTF's ability to
comply with its obligations under this Agreement. Each of Biocon
and MTF agree that all of MTF's obligations under this Agreement
are and will be binding upon Biocon and MTF and all existing and
future affiliates of either of them and that each party whose
signature to this Agreement is required to make such obligation
binding on all such affiliates has in fact executed this
Agreement. Each of Biocon and MTF, on the one hand, and
Osteotech, on the other hand, represents, warrants and covenants
that it is not a party to any agreement, or subject to any
obligation or other duty, that would materially conflict with or
intefere with MTF's or Osteotech's respective ability to comply
with its obligations under this Agreement.
(b) Osteotech represents, warrants and covenants (i) that this
Agreement does not conflict with or cause a breach of or default
under any other agreement to which it or any of its affiliates is
a party or is bound; and (ii) that neither it or any of its
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affiliates will enter into any agreement which would conflict
with or interfere with Osteotech's ability to comply with its
obligations under this Agreement. Osteotech agrees that all of
Osteotech's obligations under this Agreement are and will be
binding upon all existing and future affiliates of Osteotech and
that each party whose signature to this Agreement is required to
make such obligation binding on all such affiliates has in fact
executed this Agreement.
(c) Except as otherwise expressly herein provided, this Agreement may
not be assigned in whole or in part without the prior written
consent of the other party, provided that either party may assign
its rights under this Agreement to any majority-owned subsidiary
of such party without the consent of the other party, provided
that such subsidiary agrees in writing to be bound by the terms
and conditions of this Agreement. In the event of any such
assignment, the party making such assignment shall not be
relieved of its obligations under this Agreement unless otherwise
agreed to in a writing executed by the other party.
10. NAME, EMBLEM, PACKAGING, TECHNOLOGY AND TRADEMARK
(a) Except to the extent Osteotech indicates in any literature,
including without limitation promotional materials, that MTF is
one of Osteotech's Tissue Processing clients, Osteotech shall
have no right to use the trademark or emblem of MTF in connection
with its Processing activities or to use the name of MTF for
commercial purposes without the prior written consent of MTF;
provided, however, Osteotech may disclose MTF's name as may be
required by law, government regulation or court order.
(b) Except to the extent MTF indicates in literature, including
without limitation promotional materials, that Osteotech
processes Tissue distributed by ▇▇▇, ▇▇▇ shall not have the right
to use any trademark or emblem of Osteotech, including the name
Osteotech, without the prior written consent of Osteotech;
provided, however, MTF may disclose Osteotech's name as may be
required by law, government regulation or court order.
(c) (i) Nothing in this Agreement shall be interpreted to convey to
MTF any trademark, patent or proprietary technology owned by
Osteotech;
(ii) Nothing in this Agreement shall be interpreted to convey to
Osteotech any trademark, patent, or proprietary technology
owned by MTF.
(d) MTF recognizes that Osteotech currently performs, and intends in
the future to perform, Processing services for others in addition
to MTF, and therefore, agrees that unless specifically developed
or customized for MTF or as otherwise provided herein, all
packaging and technology used by Osteotech to perform Processing
services for MTF may also be used by Osteotech to perform such
services for others.
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(e) MTF recognizes that Osteotech processes Proprietary Products and
agrees that if it were to distribute these products it will do so
only under the trademark, packaging, labels and emblems developed
and provided by Osteotech.
11. NOTICES
All notices and other communications provided for hereunder shall be in
writing and shall be mailed by certified mail, return receipt requested,
telecopied, with a copy sent promptly thereafter by U.S. mail, or delivered by
hand or overnight delivery, as follows.
If to MTF: Chief Executive Officer
Musculoskeletal Transplant Foundation
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
If to Osteotech: Chief Executive Officer
Osteotech, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇
or such other person or address as either party may designate by written notice
to the other party complying as to delivery with the terms of this Section 11.
All such notices and other communications shall be effective (i) if mailed by
certified or registered mail, when received as indicated by the return receipt;
(ii) if telecopied, when transmitted, as indicated by the facsimile transmission
report, provided same is on a business day in the U.S. (excludes weekends and
federal holidays) and, if not, on the next business day; or (iii) if delivered,
upon delivery, provided same is on a business day and, if not, on the next
business day.
12. ENTIRE AGREEMENT
This Agreement sets forth the entire agreement between the parties. Any
prior agreements, promises, negotiations, or representations, either oral or
written, relating to the subject matter of this Agreement not expressly set
forth in this Agreement, are of no force or effect. Without limiting the
foregoing, except as expressly provided in Section 2.4 hereof, it is agreed that
the Prior Processing Agreement is superseded in its entirety by this Agreement
and is of no force and effect as of the effective date of this Agreement.
13. MODIFICATION
This Agreement, or any part or section of it, may not be amended or
modified except by the written consent of both parties to such Agreement.
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14. APPLICABLE LAW
This Agreement shall be construed in accordance with the laws of the State
of New Jersey, without giving effect to any conflict of laws principles.
15. WAIVER
Waiver or breach of any provision of this Amended and Restated Agreement
shall not be deemed a waiver of any other breach of the same or a different
provision of this Agreement.
16. INDEPENDENT CONTRACTOR
Osteotech is providing its services hereunder as an independent contractor.
Nothing herein shall create any affiliation, partnership or joint venture
between the parties hereto, or any employer/employee relationship.
17. SEVERABILITY
The provisions of this Agreement shall be severable, and if a court of
competent jurisdiction holds any provisions of this Agreement to be in violation
of any applicable law, the remaining provisions shall nevertheless remain in
full force and effect.
18. SUCCESSORS
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective parents, subsidiaries, affiliates, successors and
assigns.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers as of the date first written above.
MUSCULOSKELETAL TRANSPLANT FOUNDATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
and Chief Executive Officer
BIOCON, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
OSTEOTECH, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief
Executive Officer
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Exhibit 3.1
MTF
Schedule of Processing Fees
***
----------
*** Indicates the omission of confidential material pursuant to the request for
confidential treatment made in accordance with Rule 24b-2 under the
Securities Exchange Act of 1934, as amended. The confidential material is
being filed separately with the Securities and Exchange Commission.
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Exhibit 3.2
MTF
Schedule of Processing Fees
***
----------
*** Indicates the omission of confidential material pursuant to the request for
confidential treatment made in accordance with Rule 24b-2 under the
Securities Exchange Act of 1934, as amended. The confidential material is
being filed separately with the Securities and Exchange Commission.
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Exhibit 3.2.2
MTF
Schedule of Processing Fees
***
----------
*** Indicates the omission of confidential material pursuant to the request for
confidential treatment made in accordance with Rule 24b-2 under the
Securities Exchange Act of 1934, as amended. The confidential material is
being filed separately with the Securities and Exchange Commission.
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