EXHIBIT 10.4
SUPPLY AGREEMENT
This Supply Agreement ("Agreement") is entered into as of October 11, 2002
between bioMerieux, Inc., a Missouri corporation ("BMX"), and OraSure
Technologies, Inc., a Delaware corporation ("OSUR").
BACKGROUND
BMX, through its predecessor, Organon Teknika Corporation, a Delaware
corporation, and OSUR, through its predecessor, Epitope, Inc., an Oregon
corporation, previously entered into a Supply Agreement (the "Original Supply
Agreement") and Distribution Agreement (the "Original Distribution Agreement"),
each dated as of April 1, 1994. Pursuant to the Original Supply Agreement, BMX
agreed to supply all of OSUR's requirements of Antigen (as defined below) in
connection with the research and development, manufacture, use and sale of
Products (as defined below) to BMX under the Original Distribution Agreement.
Pursuant to the Original Distribution Agreement, OSUR appointed BMX and its
Affiliates (as defined below) as exclusive distributor of the Products. BMX and
OSUR desire to enter into this Agreement in order to amend and restate the terms
of the Original Supply Agreement.
AGREEMENT
In consideration of the mutual covenants contained herein, and the premises
set forth above, the parties hereby amend and restate the Original Supply
Agreement in its entirety, and agree as follows:
1. Definitions.
1.1 "Affiliate" shall mean any individual or entity that controls, is
controlled by, or is under common control with, the specified party. For
purposes of this definition, "Control" shall mean direct or indirect beneficial
ownership of more than 50% of the voting stock, ownership interest or income
interest in an entity.
1.2 "Antigen" shall mean purified disrupted Human Immunodeficiency
Virus Type 1, H-9 (HIV-1) strain produced by BMX's Affiliate(s) and supplied
hereunder by BMX as described in the Specifications. The Antigen may be produced
via either BMX's Prostak process (referred to as "Prostak Antigen") or, if made
available by BMX and included in the Product specifications, the Prostak Plus
process (referred to as "Prostak Plus Antigen").
1.3 "Products" shall mean oral fluid confirmatory tests for HIV-I
manufactured from time to time during the Term hereof by OSUR using the Antigen.
A list of the current Products is contained in Exhibit 1.3 hereto.
1.4 "Specifications" shall mean the specifications set forth on
Exhibit 1.4 attached hereto with respect to the Antigen and Vironostika Assays
(as defined below), or such other specifications as may be established pursuant
to Article 6 hereof.
1.5 "Distribution Agreement" shall mean that certain Distribution
Agreement entered into by BMX and OSUR as of the date hereof, which amends and
restates the Original Distribution Agreement.
1.6 "Term" shall have the meaning described in Section 9.1.
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1.7 "Transfer Price" for the types of Antigen and Vironostika Assays
shall be as set forth in Exhibit 1.7 attached hereto and shall be subject to
adjustment as provided in Section 3.1 hereto.
1.8 "FDA" shall mean the U. S. Food and Drug Administration, or any
successor agency thereto.
1.9 "Vironostika Assay" means the BMX Vironostika HIV-1 microplate
assay which is approved by the FDA for detecting HIV-1 in an oral fluid specimen
for use solely for QA and other internal testing by OSUR for the Products.
2. Supply.
2.1 BMX shall sell to OSUR all of OSUR's requirements for Antigen and
Vironostika Assays in connection with OSUR's research and development,
manufacture, use and sale of the Products to BMX under the Distribution
Agreement, or for other internal research or development purposes by OSUR. OSUR
shall not resell or use the Antigen or Vironostika Assays acquired from BMX for
any other purpose nor make for, or sell to, any third party, the Products
covered by the Distribution Agreement or any other products made from the
Antigen, except as expressly provided under Sections 9.6.3 or 9.7.
2.2 As of the effective date of this Agreement and, upon request of
BMX, on the first business day of each calendar quarter thereafter, OSUR shall
inform BMX, in writing, of the quantity of Antigen and Products that OSUR has in
inventory.
2.3 Notwithstanding anything to the contrary herein, OSUR shall be
entitled to purchase additional Antrigen and Vironostika Assays for production
of Products sufficient to effect a transfer of Product manufacturing from OSUR's
facilities in Beaverton, Oregon to OSUR's facilities in Bethlehem, Pennsylvania
and to effect a transfer of manufacturing of the OraSure(R) Oral Specimen
Collection Device from a contract manufacturer in Oregon to OSUR's facilities in
Bethlehem, Pennsylvania, and to obtain FDA approval of such transfers.
3. Price; Payment.
3.1 OSUR shall pay to BMX an amount equal to the applicable Transfer
Price for the Antigen and any Vironostika Assays sold hereunder. Commencing on
January 1, 2004 and on each January 1 thereafter during the Term, BMX may
increase the Transfer Price for the Antigen and any Vironostika Assays purchased
during the calendar year beginning on such January 1, upon 60 days prior notice
to OSUR, by an amount equal to the percentage change in the Consumer Price Index
published by the United States Bureau of Labor Statistics of the United States
Department of Labor during the twelve (12) consecutive calendar months
immediately prior to the date of the notice for which data (either preliminary
or final) is then available. Comparisons shall be made using the index entitled
U.S. City Average - All Items and Major Group Figures for All Urban Consumers
(1982-84 = 100), or the nearest comparable data on changes in the cost of living
if such index is no longer published. The Transfer Price shall not include
sales, use or similar taxes, and OSUR shall be responsible for payment of any
such taxes.
3.2 OSUR shall pay BMX within 30 days of the date of BMX's invoice,
which shall not be dated earlier than the date of shipment of Antigen and/or
Vironostika Assays. Amounts not paid when due shall bear interest from the
invoice date at 1 percent per month or, if less, the highest rate of interest
permitted under applicable law.
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4. Purchase Orders; Forecasts.
4.1 All purchases of Antigen and/or Vironostika Assays pursuant to
this Agreement shall be effected by OSUR's issuance of its purchase order forms.
Each purchase order shall identify the Antigen and/or Vironostika Assays
purchased, quantity purchased, delivery date(s) (in accordance with applicable
forecasts, unless otherwise agreed), dating, routing instructions, destination
and confirmation of price. For accounting convenience, each purchase order may
bear a separate number having no numerical relationship to this Agreement. No
term or condition contained in any such purchase order shall alter, amend,
modify or supplement BMX's obligations hereunder unless specifically agreed to
in writing by BMX. BMX shall accept facsimile orders. OSUR shall submit orders
at least 45 days in advance of the requested delivery date. BMX may, but shall
not be required to, accept orders placed less than 45 days before the requested
delivery date.
4.2 Provided BMX delivers forecasts of Product purchases in
accordance with Section 4.2 of the Distribution Agreement, by the 46th day of
each calendar quarter, OSUR shall provide BMX with a forecast of the amount of
Antigen and Vironostika Assays that OSUR expects to order for shipment during
the next four calendar quarters. The forecast shall constitute a binding
commitment by OSUR to purchase not less than the quantity of Antigen and
Vironostika Assays stated for each of the first three months of the forecast;
provided that OSUR shall be permitted to change any forecast, including the
first three months of a forecast if necessary, in order to reflect any changes
in actual yields from the Antigen in manufacturing Products or any changes in
Product forecasts provided by BMX under the Distribution Agreement. BMX shall
use its best efforts to meet all delivery dates for Antigen and Vironostika
Assays up to the amounts specified in the applicable forecast and shall use
commercially reasonable efforts to meet requested delivery dates for Antigen and
Vironostika Assays ordered by OSUR in excess of such quantities. Notwithstanding
the foregoing, and subject to Article 2 of this Agreement, BMX may at its option
and without being in breach of this Agreement decline to accept an order, or if
accepted, revoke the acceptance of an order, in total or in part, which exceeds
the amount of Antigen which is reasonably required by OSUR to produce the amount
of Products which BMX has made a firm commitment to purchase under the
Distribution Agreement. Upon request, OSUR will provide reasonable documentation
to show the amount of Antigen required to produce such Products.
5. Delivery; Acceptance; Returns.
5.1 All Antigen and Vironostika Assays shall be delivered EX WORKS
(Incoterms 2000) BMX's facility. Antigen shall be shipped on dry ice by
overnight air express, the cost of which shall be borne by OSUR. BMX shall
obtain all necessary regulatory approvals prior to the shipment of Antigen. BMX
shall not deliver any Antigen more than 15 days in advance of OSUR's requested
delivery date, and OSUR may return any Antigen delivered prior to such time at
BMX's expense.
5.2 BMX shall be responsible for boxing, crating, handling, storage
and other packing requirements prior to shipment. All Antigen and Vironostika
Assays shall be packaged, marked and otherwise prepared for shipment in a manner
which is (i) in accordance with good commercial practice, (ii) acceptable to
common carriers for shipment and (iii) adequate to ensure safe arrival of the
Antigen and Vironostika Assays. All such costs shall be paid by BMX.
5.3 BMX shall supply to OSUR for evaluation purposes only and at no
charge to OSUR except for shipping expenses, a 250-microgram sample taken from
Prostak Antigen lots
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and Prostak Plus Antigen lots. Such samples shall be sent to OSUR prior to BMX's
shipping of the applicable type of Antigen to fill an order. OSUR will evaluate
the sample for compliance by the lot with the Specifications, and shall notify
BMX of its approval or rejection of the Antigen represented by the sample within
37 days of receipt. In the absence of such notice, OSUR will be deemed to have
accepted and approved the sample. Evaluation by and acceptance of, or any
failure to evaluate or accept, any Antigen by OSUR shall in no way relieve BMX
of its obligation to deliver Antigen in accordance with the warranties set forth
in Section 7.1 or otherwise comply with this Agreement. Upon written approval of
each lot by OSUR, BMX may include (but may not mix) more than one lot in a
shipment and shall ship in volumes of approximately 130 milligrams or such
smaller amounts as OSUR may reasonably request. With respect to any unused
portion of a sample remaining after OSUR's evaluation (or in the event no
evaluation is made), OSUR may use the remaining sample for manufacturing
Products, but shall not use such sample for any other purpose whatsoever without
BMX's prior written consent. OSUR, at its option, may destroy or otherwise
dispose of such remaining Antigen sample, and upon termination of this
Agreement, any remaining sample material shall be destroyed by OSUR.
Notwithstanding the foregoing, OSUR may permanently retain a portion of each
sample for lot control or other quality control purpose.
5.4 OSUR is authorized upon reasonable notice and during normal
business hours to inspect BMX's or its Affiliates' manufacturing facilities,
operations and quality control records to review compliance with Specifications,
FDA Quality Systems Regulations and this Agreement. Any such inspection and
review shall be subject to the obligations of confidentiality set forth in
Article 8 hereof. Any such inspection or right to inspect by OSUR shall in no
way relieve BMX of its obligation to deliver Antigen or Vironostika Assays
conforming to the applicable Specifications and shall in no way waive OSUR's
rights to inspect and accept or reject Antigen or Vironostika Assays.
5.5 BMX shall advise OSUR in writing (including a description of any
and all observations or notices made or given relating to this part of BMX's
business) of any inspection of its facilities by any governmental or regulatory
agency or authority and of any other governmental or regulatory action, which
BMX's management reasonably believes, or should reasonably believe, may
substantially and adversely affect the Antigen, the Vironostika Assays or BMX's
performance of its obligations under this Agreement (including, without
limitation, BMX's obligation to comply with applicable laws and regulations). In
addition, at OSUR's request, BMX shall make available for review by the FDA the
manufacturing and control documentation required in connection with any FDA
approvals, which may be accomplished in any manner acceptable to the FDA,
including the review of a suitable master file.
6. Specifications.
BMX shall notify OSUR at least 90 days prior to any changes in the
Specifications proposed by BMX and shall not make any change that would affect
Product performance or regulatory approval without OSUR's prior approval, except
as may be required by FDA. BMX will notify OSUR of changes required by FDA
within 10 days of receipt of notice thereof. Any change in Specifications made
in accordance with the provisions of this Article 6 shall be subject to the
warranties given by BMX in Section 7.1. If BMX shall effect the change in
Specifications in accordance with this Article 6, (i) either party shall be
entitled to terminate this Agreement and the Distribution Agreement if its
ability to make and/or sell the Products will be materially adversely affected
by its inability to use Antigen with such modified Specifications in connection
therewith; provided, however, BMX shall be entitled to make such termination
only if such change is required by FDA; and (ii) the parties shall cooperate
with each other in seeking
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to obtain any FDA approvals required with respect to the Products as a result of
any change in Specifications.
7. Warranties and Indemnities.
7.1 BMX warrants that it has full right, title and authority to sell
the Antigen and Vironostika Assays to OSUR in accordance with the terms hereof.
BMX further warrants that the Antigen will conform to the Specifications through
18 months from the date of delivery to OSUR and the Vironostika Assays will
conform to the Specifications through the expiration date stated on the package;
that in the production of the Antigen and Vironostika Assays, by BMX, or any
Affiliate producing the Antigen or Vironostika Assays, as applicable, will
comply with the FDA Quality Systems Regulations as well as the then current good
manufacturing practices, good laboratory practices and all other applicable
requirements of the FDA, and with all other applicable Federal, state and local
laws; and that the Antigen and Vironostika Assays will be free from defects in
materials and workmanship through their respective warranty periods stated
above. THE FOREGOING WARRANTIES ARE THE SOLE AND EXCLUSIVE WARRANTIES CONCERNING
THE ANTIGEN AND VIRONOSTIKA ASSAYS, AND ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING ALL WARRANTIES OF MERCHANTIBILITY AND FITNESS FOR PARTICULAR
PURPOSE, ARE EXPRESSLY DISCLAIMED.
7.2 BMX shall indemnify, defend and hold harmless OSUR from all
claims, suits, liabilities, damages and expenses (including reasonable attorney
fees) incurred on account of any third party product liability claim, including
recall claims, resulting from, arising out of or connected with BMX's breach of
any of the foregoing warranties or its other obligations under this Agreement;
provided, however, that the foregoing indemnity shall not extend to any claim,
suit, liability, damage or expense of any kind attributable to the negligent
conduct of OSUR or a defect in Products not resulting from defective Antigen or
Vironostika Assays.
7.3 It shall be a condition to BMX's indemnification obligation that
OSUR follow the procedures set forth below:
7.3.1 OSUR shall promptly notify BMX upon learning of any claim
as to which indemnification may be sought; provided, however, that
failure to give such prompt notice shall only relieve BMX of its
obligation to provide indemnification to the extent such failure has a
material adverse effect which limits BMX from making a proper defense
of such claim.
7.3.2 OSUR shall permit BMX to control the response to and any
settlement or defense of any claim for which indemnification may be
sought, but may require that any settlement agreement impose no
obligation on OSUR other than the payment of monetary damages for
which BMX indemnifies OSUR. OSUR's written consent, not to be
unreasonably withheld, shall be required on any term other than the
payment of such damages. OSUR shall have the right to participate in
the response to and any settlement or defense of the claim using its
own counsel at its own expense. If BMX fails within a reasonable time
to respond to or undertake a settlement or defense of the claim, OSUR
shall have the right, but not the obligation, to undertake such
response, settlement, and defense at BMX's expense and risk.
7.3.3 OSUR shall cooperate fully with BMX with respect to any
claim as to which indemnification may be sought, making available all
information and assistance that BMX may reasonably request and that is
under OSUR's control.
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7.4 Each party shall immediately notify the other in writing should
it become aware of any defect or condition that may constitute a deviation from
the Specifications or warranties for Antigen or Vironostika Assays. BMX shall
reimburse OSUR in full for all reasonable costs of retrieval and recall,
replacement, or repair of Products incorporating defective Antigen, and for the
purchase price paid by OSUR for the defective Antigen or Vironostika Assays, but
only if the recall or replacement does not result from a defect in the
manufacture, packaging, labeling or handling of Products by OSUR, in which case
OSUR shall likewise be responsible.
8. Confidentiality.
8.1 Each party shall take such steps, and when necessary to protect
the rights of the other shall cause its Affiliates to take such steps, as are
reasonably required to protect and keep confidential, and shall not use,
publicize or otherwise disclose to third parties other than Affiliates,
Confidential Information (as defined below) of the other party (or its
Affiliates), which Confidential Information was acquired from the other party
(or its Affiliates) pursuant to this Agreement, including, without limitation,
following procedures designed to limit access to such Confidential Information
to those persons having the need to know it. The parties shall not disclose or
use such Confidential Information except as they may be entitled to do so under
this Agreement or if necessary pursuant to or in the performance of this
Agreement.
8.2 The obligation of confidentiality and restriction on use imposed
by the foregoing Section 8.1 shall not apply to any particular item of
Confidential Information that:
8.2.1 is known or generally available, or subsequently becomes
known or generally available, to the public, or is otherwise at the
time of disclosure or subsequently becomes part of the public domain,
whether by printed publication or otherwise, through no fault of the
receiving party;
8.2.2 the receiving party can demonstrate by competent evidence,
based in substance upon writings and/or physical evidence, (i) was
known to the receiving party at the time of receipt or (ii) is
furnished to the receiving party without obligation of confidentiality
or nonuse by a third party, either before or after the time of its
disclosure by the disclosing party, which third party is not
restricted by a confidential undertaking to the disclosing party at
the time of the disclosure;
8.2.3 the receiving party can demonstrate by competent evidence,
based in substance upon writings and/or physical evidence, has been
developed independently by the receiving party by persons not having
access to the Confidential Information; or
8.2.4 is the Confidential Information of the disclosing party
that the disclosing party discloses to a non-Affiliate without
restriction.
8.3 The obligations of confidentiality and restriction on use under
this Article 8 shall continue to be binding upon the parties, for a period of
five years following termination or expiration of this Agreement.
8.4 Either party may also disclose Confidential Information disclosed
to it by the other party to the extent, and only to the extent, such disclosure
is necessary for such party to comply with applicable governmental laws or
regulations, including disclosures in any
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regulatory filings required in connection with the Products. The party that
desires to so disclose Confidential Information shall give the other party
reasonable advance notice of any such proposed disclosure pursuant to such
compliance with law or regulation, shall use its best efforts to secure
confidential treatment of the Confidential Information thus disclosed, and shall
advise the other party in writing of the manner in which that was done.
8.5 For purposes of this Agreement, Confidential Information shall
mean: (a) data, inventions, information, processes, know-how, patent
applications, trade secrets and similar intellectual property rights of a party,
including, without limitation, the original and copies of all documents,
inventions, laboratory notebooks, drawings, specifications, devices, equipment,
prototype models and tangible manifestations embodying any technology disclosed
hereunder, (b) a party's customer lists and marketing, sales, costs, royalty and
similar information related to the manufacture or sale of Antigen, Vironostika
Assays or Products, and (c) any other information disclosed in writing and
marked as "Confidential Information" or, if disclosed orally, reduced to writing
and marked as "Confidential Information" and submitted within thirty (30) days
of the original oral disclosure.
9. Term; Termination.
9.1 The initial term of this Agreement shall commence on the date
first written above and shall continue until December 31, 2005 (the "Initial
Term"), unless terminated earlier as provided below; provided, however, that
this Agreement shall automatically renew for successive additional periods of
one year each (each a "Renewal Term" and together with the Initial Term, the
"Term") unless either party gives written notice of its election not to have
this Agreement renewed, which notice must be given not less than 180 days prior
to the expiration of the Initial Term or applicable Renewal Term. In the event
FDA approval for the use of BMX's HIV-0-TEK HIV-1 assay for detection of HIV-1
in an oral fluid sample collected with an OraSure(R) Oral Specimen Collection
Device is received on or before December 31, 2004, the Initial Term shall
automatically be extended to December 31, 2007 (notwithstanding either party
providing notice of their election not to renew).
9.2 Without waiving any other rights OSUR may have, OSUR shall have
the right to terminate this Agreement at any time within 90 days following the
occurrence of any of the following events:
9.2.1 BMX shall fail, on more than one occasion in any calendar
year, to deliver Antigen or Vironostika Assays (for reasons other than
as specified in 9.2.2) within 20 working days after the delivery dates
established thereof pursuant to the terms of this Agreement and any
applicable purchase order; or
9.2.2 the Antigen or Vironostika Assays delivered shall not
conform to the applicable warranties contained in this Agreement and
such failure to conform is not remedied within 10 days after notice
thereof (either written, or oral with written confirmation) to BMX; or
9.2.3 BMX shall be in material breach of any of the other
provisions of this Agreement or of any purchase order issued pursuant
to this Agreement (not covered by Subsections 9.2.1, 9.2.2 or 9.3) and
such breach is not cured within 30 days of written notice thereof to
BMX; or
9.2.4 BMX shall become insolvent or file a voluntary petition in
bankruptcy; BMX shall make an assignment for the benefit of creditors;
a receiver, trustee
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in bankruptcy or similar officer shall be appointed to take charge of
all or part of BMX's assets or property; or an involuntary petition of
bankruptcy shall be filed against BMX and, in the case of any of the
foregoing, the same shall not have been dismissed or otherwise
resolved within 30 days.
9.2.5 The Distribution Agreement expires without being renewed
or is terminated other than for default of OSUR.
9.3 OSUR acknowledges that the production of Antigen involves a
biological process and is therefore subject to many variable factors which may
make it impossible to furnish Antigen which conforms to the applicable
Specifications contained herein despite best efforts to do so. In the event BMX
is unable to furnish Antigen conforming to the Specifications or is otherwise
unable to supply all of OSUR's requirements of Antigen, despite best efforts to
do so, then OSUR shall, as its sole remedy, be entitled either to (i) terminate
this Agreement if such failure is not remedied within 30 days after written
notice from OSUR; (ii) and/or to purchase Antigen meeting the Specifications
hereunder from an alternative source in such quantities as OSUR shall determine
until such time as BMX is able to fully resume production and delivery of
Antigen under this Agreement, provided that OSUR shall have the right to
purchase such quantities of Antigen from BMX as OSUR shall determine and BMX
shall be able to supply. If OSUR makes the election set forth in clause (ii),
above, BMX shall use its best efforts to assist OSUR in finding an alternative
source of Antigen.
9.4 Without waiving any other rights BMX may have, BMX shall have the
right to terminate this Agreement at any time within 90 days following the
occurrence of any of the following events:
9.4.1 OSUR shall be in material breach of any of the provisions
of this Agreement and such breach is not cured within 30 days of
written notice thereof to OSUR (15 days for breach of payment terms);
or
9.4.2 OSUR shall become insolvent or file a voluntary petition
in bankruptcy; OSUR shall make an assignment for the benefit of
creditors; a receiver, trustee in bankruptcy or similar officer shall
be appointed to take charge of all or part of OSUR's assets or
property; or an involuntary petition of bankruptcy shall be filed
against OSUR, and in the case of any of the foregoing, the same shall
not have been dismissed or otherwise resolved within 30 days.
9.4.3 The Distribution Agreement expires without being renewed
or is terminated other than for default of BMX.
9.5 Termination or expiration of this Agreement shall not relieve any
party from performance of any obligation due nor affect any rights accrued prior
to the effective date of such termination or expiration.
9.6 Antigen purchased by OSUR under this Agreement which remains
unused by OSUR at the time of expiration or termination of this Agreement shall
be handled as follows:
9.6.1 If this Agreement is terminated as a result of a default
by BMX under this Agreement or the Distribution Agreement, BMX shall,
at OSUR's request, be required to repurchase any remaining Antigen
held by OSUR, not to exceed the quantity of Antigen needed to produce
OSUR's forecasted requirements for the following six (6)
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months, provided such Antigen meets the Specifications and has not
been in OSUR's possession for more than twelve (12) months. BMX shall
pay OSUR the amount paid by OSUR for such Antigen. OSUR shall package
and ship such Antigen to BMX, with the cost of freight to be paid by
BMX. Payment shall be made within 30 days of receipt of such Antigen.
9.6.2 If this Agreement expires or is terminated as a result of
a default by OSUR under this Agreement or the Distribution Agreement,
BMX shall have the option, upon written notice to OSUR within 60 days
after such event, to repurchase any or all Antigen held by OSUR which
is not needed to fulfill OSUR's requirements to complete the
production of Products for BMX under the Distribution Agreement. BMX
shall pay OSUR or provide a credit to OSUR's account, at BMX's option
for the amount paid by OSUR for such repurchased Antigen. OSUR shall
package and ship such Antigen to BMX with the cost of freight to be
paid by BMX. BMX shall pay OSUR or credit OSUR's account within 30
days of receipt of such returned Antigen.
9.6.3 With respect to any Antigen not repurchased by BMX under
Section 9.6.1 or 9.6.2, OSUR may make Products therefrom and sell such
Products provided OSUR has first obtained a license to do so from the
National Institutes of Health ("NIH") (the holder of certain
applicable U.S. patents covering the Antigen and the Products) or a
sublicense from a holder of such license, if deemed necessary by the
NIH. OSUR shall not resell Antigen to any third party and shall not
sell Products unless it has obtained the aforesaid license or
sublicense, if deemed necessary by the NIH. OSUR shall indemnify,
defend and hold harmless BMX from any claim by NIH and any liability,
cost or expense arising from such claim due to OSUR's failure to
obtain such license.
9.7 In the event this Agreement expires, or terminates other than as
a result of a default by OSUR, BMX shall negotiate in good faith with OSUR for
production and sale to OSUR of a two (2) year supply of Antigen and OSUR shall
be permitted to make Products from such Antigen and sell such Products (provided
OSUR has secured, if necessary, the appropriate license(s) or sublicense(s) to
make, use and sell the Products). The two (2) year supply shall be not greater
than the quantity of Antigen sold to OSUR during the previous two (2) years of
the Agreement, plus an amount equal to ten percent (10%) of that two (2) year
supply. The Transfer Price payable by OSUR for the two (2) year supply shall not
exceed the Transfer Price for the Antigen in effect on the date the Agreement
expires or terminates, and OSUR shall pay BMX a royalty equal to *** percent
(**%) of the gross revenues, less only the costs of freight, insurance, taxes,
duties, returns and rebates paid or allowed by OSUR, from sales of Products
manufactured with such two (2) year supply of Antigen.
9.8 Royalty. Royalties due under Section 9.7 will be payable on a
quarterly basis and will be due within 45 days after the end of each calendar
qarter. OSUR shall, as of the same date, provide BMX a written report,
specifying in such detail as BMX may reasonably request, the total revenue
received during such quarter from such Products, the total number of units of
each Product involved, and the allowable deductions taken. OSUR shall, for a
period of three years after the end of each calendar quarter for which reports
are due, keep and maintain full and complete records to document all revenue
received and all allowable deductions with respect to such Products. BMX shall
be entitled to audit OSUR's records, not more than once annually, to verify the
accuracy of OSUR's quarterly reports and royalty payments; provided, however any
audit(s) shall commence no later than three years from the date of the royalty
report to which it pertains. All information received by BMX from OSUR in
connection with such
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audits and all royalty calculations shall be subject to the confidentiality
provisions of Article 8. Any amounts determined to be due as a result of such
audits shall be paid within thirty days after OSUR's receipt of BMX's request,
except that any disputed amounts will be settled pursuant to Section 10.12
hereof (Dispute Resolution).
10. Miscellaneous.
10.1 Notices. Notices required or permitted hereunder shall be in
writing and shall be personally delivered or sent by registered or certified
mail or facsimile to the addresses set forth below or to such other address in
the United States that the parties may hereafter specify, and shall be effective
upon receipt:
10.1.1 If to BMX:
bioMerieux, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, X.X. 00000
Attn: President
Copy: General Counsel
Fax: (000) 000-0000
10.1.2 If to OSUR:
OraSure Technologies, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: President
Copy: General Counsel
Fax: (000) 000-0000
10.2 Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of North Carolina, without
regard to the choice of law rules thereof.
10.3 Assignment. Neither this Agreement nor any right or obligation
arising hereunder may be assigned, in whole or in part, by either party without
the prior written consent of the other, which consent shall not be unreasonably
withheld. Notwithstanding the above, this Agreement may be assigned by either
BMX or OSUR to a third party which succeeds to all or substantially all of the
assigning party's business, whether by merger, consolidation, sale or otherwise,
without the consent of the non-assigning party, except that, in the event of an
assignment by OSUR to any party reasonably deemed a competitor of BMX, as
defined below, by BMX, BMX retains the right to refuse such assignment. A
competitor of BMX shall mean an entity that competes with BMX in the
manufacture, distribution or sale of diagnostic products. Subject to the
foregoing restrictions on assignment, this Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties.
10.4 Entire Agreement. From and after the effective date hereof,
this Agreement (together with all Exhibits), the Distribution Agreement and that
certain Release and Settlement Agreement between OSUR and BMX of even date
herewith, set forth and constitute the entire agreement between the parties with
respect to the subject matter hereof, and supersede any and all other prior
agreements, understandings, promises and representations
-10-
made by either party to the other concerning the subject matter hereof;
provided, however that any sales of Antigen which occurred under the Original
Supply Agreement or which are pending as of the date of this Agreement, and the
parties' rights and obligations with respect thereto, shall continue to be
governed by the terms of the Original Supply Agreement. This Agreement may not
be released, discharged, amended or modified in any manner except by an
instrument in writing, making specific reference to this Agreement, and signed
by duly authorized representatives of both parties.
10.5 Waiver. No waiver of any right under this Agreement shall be
deemed effective unless contained in writing and signed by the party charged
with such waiver, and no waiver of any right arising from any breach or failure
to perform shall be deemed to be a waiver of any future right or any other right
arising under this Agreement.
10.6 Survival. Articles 7, 8, and 10 and Sections 9.6, 9.7 and 9.8
shall survive expiration or termination of this Agreement, notwithstanding the
delivery or acceptance of or payment for Antigen.
10.7 Severability. If any provision of this Agreement is held
invalid by any law, rule, order or regulation of any government or by the final
determination of any state or federal court, such invalidity shall not affect
the enforceability of all other provisions of this Agreement not held to be
invalid.
10.8 Compliance with Law. Each party shall comply with all
applicable laws, rules and regulations, including FDA regulations, in the
performance of its obligations under this Agreement.
10.9 Captions. Captions and section headings of this Agreement are
for convenience of reference only and shall not affect the interpretation or
meaning of this Agreement.
10.10 Attorney Fees. In the event suit or action or arbitration is
instituted to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to recover from the other party such sum as the court or
arbitrator may adjudge reasonable as attorney fees at trial or arbitration, on
appeal, and on any petition for review, in addition to all other sums provided
by law; provided, however, such sums shall not exceed the damages awarded to the
prevailing party.
10.11 Press Releases. Neither party shall make any public disclosure
(including press releases) of the terms of this Agreement without the prior
written consent of the other party, except to the extent required by securities
or other laws in the reasonable opinion of such party or its counsel. If a party
intends to issue a press release regarding this Agreement as permitted under
this Section 10.11, it shall provide the proposed release by facsimile or
otherwise to the other party at least twenty-four (24) hours before the release
is issued and shall make any changes reasonably requested by the other party
before the release is issued.
10.12 Alternate Dispute Resolution. The parties shall attempt in
good faith to resolve promptly any dispute arising out of or relating to this
Agreement by negotiation. If the matter cannot be resolved in the normal course
of business, either party shall give the other party written notice of any such
dispute not resolved, after which the dispute shall be referred to senior
executives of both parties, who shall likewise attempt to resolve the dispute.
If the dispute has not been resolved by negotiation within forty-five (45) days
of the disputing party's written notice or if the parties fail to meet within
twenty (20) days from such
-11-
notice, the parties shall endeavor to settle the dispute by mediation under the
supervision of and in accordance with the Center for Public Resources ("CPR")
Model Mediation Procedure for Business Disputes. Unless otherwise agreed, both
parties and either individual party may request the CPR to appoint an
independent mediator. The location of the mediation shall be agreed upon by both
parties and, in the event parties do not timely agree, the location will be
determined by the mediator. Any dispute not settled by the mediation referenced
above within sixty (60) days after appointment of a mediator may, upon the
request of either party, be submitted to arbitration in accordance with the CPR
Arbitration Rules and Commentary. A single, impartial arbitrator mutually
acceptable to the parties shall conduct the arbitration. In the event the
parties cannot agree on an arbitrator within twenty-one (21) days after the end
of the aforesaid sixty (60) days, either party may have an arbitrator appointed
by the CPR. The location of the arbitration shall be agreed upon by both
parties. As a condition of appointment of the arbitrator, said arbitrator shall
agree to use her/his best efforts to conclude the proceeding within sixty (60)
days. Said arbitrator shall further have the authority to limit the volume of
evidence and documents to be submitted by the parties. Any court having
jurisdiction thereof may enter judgment upon the award rendered by the
arbitrator. This Section 10.12 shall, however, not be construed to limit or to
preclude either party from bringing any action in any court of competent
jurisdiction for injunctive or other provisional relief as necessary or
appropriate.
10.13 Counterparts. This Agreement may be executed in more than one
counterpart, each of which shall be an original and together all such
counterparts shall constitute a single instrument. A facsimile transmission of a
signed counterpart shall be the same as delivery of an original.
IN WITNESS WHEREOF, the parties have executed this Supply Agreement as of the
date and year first written above.
BioMerieux, Inc. OraSure Technologies,Inc.
By: /s/ Xxxxx X. Xxxxxxxxx By: /s/ Xxxx Xxxxxxxx
----------------------------- ----------------------------
Its: CFO Its: CEO
---------------------------- ---------------------------
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EXHIBIT 1.3
PRODUCTS
PRODUCT OSUR Part Number
ORASURE ORAL FLUID WESTERN BLOT KIT 501-0000
-13-
EXHIBIT 1.4
SPECIFICATIONS
*****************
-14-
EXHIBIT 1.7
TRANSFER PRICE
PRODUCT PART NUMBER TRANSFER PRICE
------- ----------- --------------
HIV-1 PROSTAK ANTIGEN 259109 ************************
HIV-1 PROSTAK PLUS ANTIGEN 259677 ************************
VIRONOSTIKA HIV-1
MICROPLATE ASSAY KITS 259750 ************************
(192 Tests per Kit and ******* per Test)
-15-
