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Exhibit 10.10
STERILIZATION PROCESSING SERVICES AGREEMENT
This agreement (the "Agreement") is made and entered into as
of the 1st day of January 1996, between the Convertors/Custom Sterile Division
of Xxxxxx Healthcare Corporation, with its principal place of business at 0000
Xxxxxxxx Xxxx, XxXxx Xxxx, Xxxxxxxx, 00000-0000 ("Buyer"), and Xxxxxxxx Micro
Science, Inc., with its principal place of business at 0000 Xxxxxx Xxxx, Xxx
Xxxxx, Xxxxxxxx, 00000 ("Seller"). This agreement may also apply to other Xxxxxx
divisions, subsidiaries, suppliers or contract manufacturers as mutually agreed
upon by Buyer and Seller.
1.0 TERM OF AGREEMENT. This Agreement will commence as of the 1st
day of January 1996 and shall continue for five and one-half (5 1/2) years to
June 30, 2001. This Agreement may be extended for one additional three (3) year
term upon the written consent of both parties. At the end of the additional
three year term, this Agreement may be extended for additional one (1) year
terms upon the written consent of both parties. The initial five and one-half (5
1/2) year term of this Agreement may also be extended under the provisions of
Section 3.3(d) of this Agreement. This Agreement supersedes the Sterilization
Processing Services Agreement made and entered into as of January 1, 1993, by
Buyer and Seller, including any amendments or modifications thereto.
2.0 PURCHASE AND SALE OF PROCESSING SERVICES; LABORATORY SERVICES.
2.1 Purchase and Sale of Processing Services. On the terms and
subject to the conditions hereinafter set forth, Buyer agrees to purchase from
Seller, and Seller agrees to perform for Buyer, all of Buyer's requirements
during the term of this Agreement, including any extension thereof, for ethylene
oxide and ethylene oxide/nitrogen gas sterilization processing services for the
products identified on Schedule A (the "Products") produced at Buyer's
facilities identified on Schedule A and for which Buyer does not perform its own
sterilization processing services. Such processing services shall be provided at
Seller's validated processing facilities located in [ * ], or at such other
validated facility or facilities operated by Seller as may be mutually agreed
upon by both parties. The facilities and products identified on Schedule A
currently represent 100% of Buyer's requirements in the United States for
ethylene oxide or ethylene oxide/nitrogen gas sterilization processing not
performed by Buyer at its own sterilization facilities. If, during the term of
this Agreement, Buyer produces a Product at another of its facilities not listed
on Schedule A, Buyer agrees to purchase its requirements for ethylene oxide and
ethylene oxide/nitrogen gas sterilization processing from Seller for the
Product produced at the unlisted facility, provided, however, that if in doing
so Buyer's transportation costs for such Product increase more than thirty
percent (30%) over the transportation costs incurred by Buyer in purchasing
sterilization processing services from Seller for the Product produced at each
facility listed on Schedule A, Buyer and Seller shall negotiate in good faith
the pricing provisions of this Agreement with respect to the Product produced
at the unlisted facility and use their best efforts to retain the economic
benefits of this Agreement for both parties with respect to the Product
produced at the unlisted facility. In the event, Buyer develops or acquires
additional products during the term of this Agreement which require ethylene
oxide or ethylene
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oxide/nitrogen gas sterilization, Buyer agrees to offer its requirements for
sterilization processing of such products to Seller under the terms and
conditions of this Agreement, to the extent Buyer does not perform its own
sterilization processing of such products. Each such additional product shall be
included within the term "Products" under this Agreement. Except as provided in
Section 4.8 of this Agreement, title to and risk of loss of the Products shall
remain with Buyer at all times.
2.2 Annual and Quarterly Forecasts. Buyer will furnish Seller
with a preliminary forecast of its requirements for sterilization processing
services for each of Buyer's manufacturing facilities for each calendar year
covered by this Agreement, including its forecasted requirements for each
calendar month and quarter within each year, no later than August 1 of the
preceding year. For purposes of this Agreement, "calendar year" shall mean each
year January 1 through December 31, 1996, 1997, 1998, 1999 and 2000 and the six
month period January 1, 2001 through June 30, 2001. Buyer and Seller shall meet
prior to the beginning of each calendar quarter to review and agree upon the
Buyer's forecasted requirements for sterilization processing services for the
upcoming quarter, which shall include a forecast for each week of the quarter,
and to exchange other information regarding their business relationship. Buyer
will use its best efforts to spread its requirements for sterilization
processing services during a quarter evenly throughout the quarter.
2.3 Minimum Processing Volume. (a) Seller will process all of
Buyer's ethylene oxide and ethylene oxide/nitrogen gas sterilization
requirements for the Products as provided in Section 2.1 of this Agreement,
regardless of Buyer's forecasted requirements.
2.3 (b) Buyer agrees that during each calendar year of the
initial term of this Agreement it will purchase, at a minimum, a dollar volume
of sterilization processing services from Seller equal to the dollar amount
shown for that calendar year in the "Total" row on Schedule B. If during any
calendar year, Buyer fails to purchase a dollar volume of sterilization
processing services from Seller in excess of [ * ] of the minimum dollar volume
for that calendar year, Seller shall have the right, at its option, to terminate
this Agreement or renegotiate its terms. If Buyer has fulfilled its obligations
under Sections 2.1 and 2.3(a) of this Agreement, termination of this Agreement,
renegotiation of its terms and the remedies provided in Section 3.2(c), shall be
Seller's sole remedies for Buyer's failure to purchase sterilization processing
services from Seller in excess of [ * ] of the minimum dollar volume for a
calendar year. If during any calendar year, Buyer purchases a dollar volume of
sterilization processing services from Seller in excess of [ * ] of the minimum
dollar volume for that calendar year, Buyer shall have the right, at its option,
to terminate this Agreement or renegotiate its terms.
2.3 (c) If this Agreement is extended beyond June 30, 2001,
Buyer and Seller shall agree upon the minimum dollar volume for each year, or
portion thereof, during the extension.
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2.3 (d) Buyer shall be free to purchase sterilization
processing services from persons other than Seller during a calendar month to
the extent that Buyer's requirements for outside sterilization processing
services for its facilities in that month are such that Seller cannot meet the
service level requirements set forth in Sections 2.4(a) and 2.4(b) of this
Agreement, provided, however, that, with respect to each such purchase of
processing services, Buyer shall first have offered to Seller the opportunity to
perform such processing services on the terms provided for in this Agreement.
2.4 Service Level Requirement. (a) Seller guarantees that it
shall complete processing within the time frame set forth in Section I of
Schedule E, as established and mutually agreed upon by both Buyer and Seller
during their quarterly review of Buyer's requirements, for Products delivered by
Buyer in accordance with the then current production schedule, including load
size and applicable high build mix for the week (as agreed to by Buyer's
shipping department and Seller's facility production scheduler) and not in
excess of the product delivery forecast agreed upon for the quarter pursuant to
Section 2.2 of this Agreement. In the event Buyer delivers to Seller during a
week Product in excess of the volume set forth in the forecast agreed upon
pursuant to Section 2.2, Seller agrees to use its best efforts to complete
processing within the time frame set forth in Section I of Schedule E. For
purposes of this Agreement, a working day is any day, including Saturday and
Sunday, during which the Seller's processing facility to which the Product is
shipped by Buyer is processing any product. The "turn around period" shall
commence on the working day and at the time product is received at Seller's
processing facility and shall end on the working day and at the time the product
is processed and removed from Seller's retort vessel.
2.4 (b) If Seller's facility fails to complete processing of
Product that is not in excess of the volume forecasted pursuant to Section 2.2
within the specified aeration period in Schedule E, Section II and Buyer has
complied with its obligations under Sections 2.2 and 2.3, Buyer may, at its
option, and upon prior written notice to Seller, ship that Product using the
dual driver concept for fastest delivery to another of Seller's processing
facilities selected by Seller, in which event Seller agrees to complete
processing of the Product at such other facility within the specified aeration
period in Schedule E, Section II. In the event Seller is unable to process such
Product at one of its facilities, Buyer may use another vendor of processing
services. Seller shall incur any additional processing or transportation
charges, including any incremental processing and transportation costs incurred
by Buyer, in connection with the shipment and use of another of Seller's or
another vendor's facility. In the event that Buyer uses another vendor's
facility pursuant to this Section 2.4(b), Seller shall be liable for any
validation costs, including Buyer's labor and transportation costs and the cost
of destructible samples, incurred by Buyer, which costs shall not exceed [ * ]
per vessel or [ * ] per facility. Product processed by another vendor under this
Section 2.4(b) shall be applied toward Buyer's minimum dollar volume requirement
set forth in Section 2.3(b).
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*Confidential Treatment requested; material filed separately with the
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2.4 (c) Should Buyer experience a shutdown or other service
interruption at any of Buyer's in house ethylene oxide or ethylene
oxide/nitrogen gas sterilization facilities which requires Buyer to transfer
this product to any of Seller's facilities, Seller shall be obligated to process
this product with the fastest turnaround possible and on a mutually agreed upon
schedule, but Seller is not obligated to meet the requirements set forth in
Sections 2.4(a) and 2.4(b) for this overflow volume.
2.5 Conversion of Johnson City, Tennessee and Cleveland,
Mississippi. (a) Buyer agrees that no later than July 1, 1997, it will cease
providing internal sterilization processing services at its Johnson City,
Tennessee facility and will purchase all of the sterilization processing
services formerly provided at its Xxxxxxx City facility from Seller (at a rate
of at least [ * ] of sterilization processing services per year). Buyer agrees
not to provide internal sterilization processing services at any of its other
facilities for Products sterilized at its Xxxxxxx City facility. If Buyer
complies with the obligations of this Section 2.5(a), Seller agrees to install
in its Charlotte, North Carolina facility equipment necessary to permit Seller
to meet the requirements of Schedule E, Section II with respect to the
sterilization processing services transferred from Buyer's Xxxxxxx City facility
to Seller's Charlotte facility.
2.5 (b) Buyer agrees that no later than January 1, 1997, it
will cease providing internal sterilization processing services at its
Cleveland, Mississippi facility and will purchase all of the sterilization
processing services formerly provided at that facility from Seller (at a rate of
at least [ * ] of sterilization processing services per year). Buyer agrees not
to provide internal sterilization processing services at any of its other
facilities for Products sterilized at its Cleveland facility.
2.6 Laboratory Services. Commencing no later than June 1,
1996, Buyer shall purchase its requirements for laboratory services from Seller
for the Products receiving sterilization processing services at Seller's Ontario
and Los Angeles, California and Charlotte, North Carolina facilities, provided
that Seller's prices for laboratory services at the time Buyer commences
purchasing such services from Seller are competitive with the prices of other
providers of such laboratory services unaffiliated with Buyer. If Buyer believes
that other providers of laboratory services are offering lower prices than
Seller at the time Buyer is to commence purchasing such services from Seller,
Buyer shall provide proof of such lower prices to Seller and Seller shall have
an opportunity to meet such lower prices. Buyer agrees to use its best efforts
to purchase from Seller its requirements for laboratory services for the
Products receiving sterilization processing services at Seller's facilities in
Santa Xxxxxx, New Mexico and Willowbrook, Illinois, commencing no later than
June 1, 1996. The parties agree that the provision of laboratory services by
Seller to Buyer will result in incremental internal and/or external cost
reductions for Buyer which shall be applied against the cost savings Seller has
agreed to provide Buyer for 1996 under Section 3.2 of this Agreement. The task
force established pursuant to Section 3.3 will determine the amount of internal
and external cost reductions that will be attributable to Seller's provision of
laboratory services.
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3.0 PRICES FOR PROCESSING SERVICES; PAYMENT TERMS; COST SAVINGS.
3.1 Prices, Payment Terms. (a) During the term of this
Agreement, Seller shall provide processing services to Buyer at the prices set
forth in Schedule B, provided, however, Seller shall be free to increase the
prices set forth in Schedule B at any time, upon thirty (30) days advance
written notice to Buyer, in an amount which permits Seller to fully recover any
increase in the costs of Seller due to (i) an increase in the price of the gas
used by Seller in providing sterilization processing services, (ii) an increase
in the amount of gas used by Seller in providing sterilization processing
services, or (iii) regulatory changes (including changes in taxes imposed on
Seller). Increases in the per pallet price in any calendar year due to
regulatory changes shall not exceed [ * ] of the average per pallet price during
that calendar year. Increases in the per pallet price in any calendar year due
to increases in the price of the gas used by Seller shall not exceed the greater
of (x) [ * ] of the average per pallet price under this Agreement on January 1
of that calendar year or (y) an amount equal to the difference between [ * ]
increased by [ * ] each year, compounded, for each complete or partial calendar
year since the date of this Agreement, including the calendar year in which the
price increase is occurring, and the sum of [ * ] and the prior increases in per
pallet prices due to increases in the price of the gas used by Sellers since the
date of this Agreement. (By way of example, if the average per pallet price on
January 1, 1998 is [ * ] and [ * ] of the increase from the average per pallet
price of [ * ] at the start of the Agreement was the result of increases in gas
prices during 1996 and 1997, price increases during 1998 due to increases in gas
prices shall be limited to the greater of [ * ]. If Seller incurs an increase in
the price of gas and is unable to raise its prices to Buyer under this Section
to fully recover such increase, Seller shall have the right to terminate this
Agreement on thirty (30) days written notice to Buyer. In the event of a
reduction in the price of the gas used by Seller in providing sterilization
processing services under this Agreement, Seller agrees to reduce its prices to
Buyer in an amount equal to the reduction in the price of gas, commencing on the
effective date of the gas price reduction. All notices of price changes to Buyer
under this Section shall include documentation showing the basis for the change.
3.1 (b) The prices set forth in Schedule B have been
determined based upon a pallet size of 40 x 48 inches or as mutually agreed upon
in writing by both parties and cycles times as set forth in Schedule A. In the
event of a cycle time increase of [ * ] or more from the times set forth in
Schedule A, Buyer and Seller shall negotiate an increase in the prices set forth
in Schedule B. Any change in pallet size must be agreed to by both parties in
writing prior to the use of such alternate pallet size.
3.1 (c) The prices provided for in this Section 3.1 do not
include taxes or the costs of shipping Products or samples to and from Seller's
facilities. Such costs shall be borne entirely by Buyer.
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3.1 (d) Seller will invoice Buyer for processing services
rendered by Seller under this Agreement. Payment of each invoice shall be made
by Buyer net thirty (30) days of the date of the invoice.
3.2 Cost Savings. (a) If Buyer complies with all of its
obligations under Sections 2.1, 2.2, 2.3, and 2.5(a) and (b) of this Agreement,
Seller agrees to provide Buyer with incremental internal and external cost
reductions and rebates ("cost savings") totaling [ * ] during the initial term
of this Agreement. The amount of the cost savings for each calendar year during
the initial term is set forth in the "Cost Savings" row on Schedule B.
3.2 (b) (i) If the incremental internal and external cost
reductions that Seller provides Buyer for a calendar year fall below the cost
savings Seller has agreed to provide Buyer for that calendar year, Seller shall
pay to Buyer a rebate in an amount equal to the difference between the agreed
upon cost savings and the incremental internal and external cost reductions
achieved during that calendar year. Such payments shall be made within sixty
(60) days after the end of the calendar year. (ii) If the incremental internal
and external cost reductions that Seller provides Buyer for a calendar year
equal or exceed the cost savings Seller has agreed to provide Buyer for that
calendar year, no rebate shall be paid by Seller to Buyer for that calendar year
and the amount of the excess for that calendar year shall be applied against the
agreed upon cost savings for the following calendar year. If at the end of the
initial term of this Agreement, Seller has provided Buyer with cost savings in
excess of the agreed upon cost savings for the initial term, Buyer shall pay to
seller one-half of the excess. Such payment shall be made within sixty (60) days
after June 30, 2001.
3.2 (c) (i) If Buyer's purchases of sterilization processing
services from Seller during a calendar year fall below [ * ] of the minimum
dollar volume for that calendar year, as provided in Section 2.3, the cost
savings that Seller has agreed to provide Buyer for that calendar year shall be
reduced to the amount shown on the applicable schedule B-1 through B-5. If
Seller has provided Buyer with incremental internal and external cost reductions
during the calendar year that exceed the reduced cost savings Seller has agreed
to provide Buyer for that calendar year, determined in accordance with this
Section, the excess cost savings for that calendar year shall be applied to the
agreed upon cost savings for the following calendar year or paid to Seller as
provided for in Section 3.2(b)(ii) of this Agreement. (ii) If Buyer's purchases
of sterilization processing services from Seller during a calendar year exceed [
* ] of the minimum dollar volume for that calendar year, the cost savings Seller
has agreed to provide Buyer for that calendar year shall be increased to the
amount shown on the applicable schedule B-1 through B-5 for that calendar year.
For purposes of determining the percentage of the minimum dollar volume of
sterilization processing services purchased by Buyer from Seller during a
calendar year under this Section 3.2(c), the percentage shall be rounded to the
nearest whole percentage such that .5% or more will be rounded up to the next
higher whole number and less than .5% will be rounded down to the next lower
whole number.
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*Confidential Treatment requested; material filed separately with the
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3.2 (d) Buyer and Seller agree that prior to entering into
this Agreement Seller made certain investments that will result in incremental
internal and external cost reductions for Buyer during 1996 in the amount of [ *
]. This amount shall be applied against the cost savings Seller is obligated to
provide Buyer for 1996 and for the initial term of the Agreement as set forth on
Schedule B.
3.3 Cost Savings Task Force. (a) Seller and Buyer agree to
establish a cost savings task force that will be responsible for developing and
approving projects that will result in internal and/or external cost reductions
for Buyer in connection with the sterilization of the Products. Within 60 days
after the execution of this Agreement, each party will designate at least three
of its employees who are knowledgeable about laboratory, sterilization and
logistics to serve on the task force and will notify the other party of the
employees it designated. Each party may replace one or more of its
representatives on the task force with another of its employees knowledgeable in
laboratory, sterilization and logistics upon thirty (30) days prior written
notice to the other party. The task force shall meet at least once every
forty-five (45) days at an agreed upon location.
3.3 (b) Seller and Buyer agree to see to it that the task
force uses its best efforts to design, develop and implement projects that will
result in internal and/or external cost reductions for Buyer. The task force
shall maintain detailed minutes of its meetings which minutes shall record,
among other matters, the task force's decisions to approve, disapprove,
continue, discontinue or modify each project considered by the task force. In
addition, the task force shall prepare a detailed written report for each
project considered by it. The report shall provide a description of the project,
its scope and its expected results, identify the representatives of each party
that will be involved in the design, development and implementation of the
project, provide a schedule and budget for each phase of the project, and
estimate the internal and external cost reductions to Buyer that will result
from the project. At each meeting, the task force shall review each project then
being designed, developed and implemented and shall revise and update the report
for each project to reflect the progress of and any changes to the project since
the preceding meeting of the task force. Seller shall maintain records for each
project detailing the engineering and research and development hours and
expenses (direct and indirect) attributable to each project.
3.3 (c) Upon completion of the implementation of each project,
the task force shall prepare a final report on the project which shall include a
detailed description of the cost of the project and the hours required to
design, develop and implement the project and the final estimate of the internal
and external cost reduction that will result to Buyer as a result of the
project. This final estimate shall be applied against the cost savings Seller
has agreed to provide Buyer in the calendar year in which implementation of the
project is completed.
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*Confidential Treatment requested; material filed separately with the
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3.3 (d) In the event the task force approves the
implementation of a project that requires a capital investment by Seller, Seller
and Buyer agree to negotiate an extension of the initial term of this Agreement,
an increase in the price of sterilization processing services provided for in
Section 3.1 to compensate Seller for the capital investment required by the
project, and/or having Buyer incur all or some portion of the capital investment
required.
4.0 PERFORMANCE OF PROCESSING SERVICES.
4.1 Processing Cycle Parameters. (a) Seller agrees that each
class of the Products processed hereunder shall be processed in accordance with
the cycle parameters for such class of Products set forth in Schedule A attached
hereto. The parties agree that no cycle parameters will provide for gas
concentration in excess of [ * ] mg/L unless the parties agree on the pricing
for such gas concentration. Buyer may modify the cycle parameters for any class
of Products from time to time and the parties may agree upon additional cycle
parameters for new classes of Products. No cycle parameters, modifications or
additions shall become effective and binding upon the parties until the cycle
parameters, modifications or additions and the pricing therefore have been
agreed upon in a writing signed by both parties.
(b) In the event Seller becomes aware that it has failed in
any respect to process any of the Products in accordance with the applicable
cycle parameters, Seller shall notify Buyer of such nonconformity no later than
the work day following Seller's discovery of such nonconformity. In the event a
facility of Seller fails to process in accordance with applicable cycle
parameters Products accounting for in excess of the percentage specified in
Schedule E, Section III, of Products processed by that facility, Buyer may
charge Seller an amount for each variation above the specified percentage to
reflect the actual additional cost Buyer incurs in labor and testing not to
exceed [ * ].
4.2 Validation of Processing Cycle Parameters. In accordance
with Food and Drug Administration requirements, Buyer shall have exclusive
responsibility for the validation of processing cycle parameters for each class
of the Products prior to the commencement of commercial processing of such
class.
4.3 Shipment of the Products by Buyer. Buyer will assemble the
Products on slip sheets or pallets and the Products shall be accompanied by
documents setting forth the facility from which the Products are shipped, the
number of shipping cartons in the shipment by product code and part number or
catalog number, the date of the shipment and the type of sterilization
processing required (100% ethylene oxide or EtO Nitrogen). Upon receipt of a
shipment, Seller will complete a Receiving Report on the shipment. If each batch
count received is not identical to that shown on shipping papers as having been
shipped by Buyer, Seller shall notify Buyer of any discrepancy and it shall be
Buyer's responsibility to locate the lost material and, if necessary, to notify
the appropriate government agencies. No material in any batch is to be
processed, and the provisions of Section 2.4 shall not apply, until both parties
are in agreement as to the exact count. Buyer agrees to supply Seller with five
(5) copies of a material
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*Confidential Treatment requested; material filed separately with the
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safety data sheet ("MSDS") complying with 29 CFR 1900.1200(g) with the first
shipment of any hazardous chemical to Seller, and with the first shipment
following each and every revision to the MSDS. Upon Seller's signed receipt of
shipment, Seller will be responsible for the total count of the Products
including biological indicators (test packs) while said Products are in Seller's
possession.
4.4 Use of Biological Indicators or Product Samples. In the
event Buyer desires to use microbiological test packs, indicators or product
samples, it shall furnish to Seller comprehensive instructions regarding the
procedures of their placement and their removal, packaging and shipment to a
testing laboratory for analysis, and the procedure for the removal, handling,
marking and disposition of any shipment of the Products which includes
microbiological test packs, indicators or product samples and Seller agrees to
comply with such instructions. Such test packs, indicators or samples shall be
conspicuously marked by Buyer and shall be dispersed at selected locations
through each shipment during processing in accordance with Buyer's
specifications. Buyer will be responsible for all expenses of testing, including
shipment to and from any testing laboratory and any sterility audit of the
laboratory.
4.5 Records of Processing. (a) Seller shall provide Buyer on a
daily work day basis a log of Buyer's product at Seller's locations showing the
status of product within Seller's locations. Buyer will furnish an originating
document providing load number and catalog number. The log shall include, but
not be limited to, the following information in the format indicated below:
CYCLE TURN-
LOAD LOT DATE VACUGAS PRETEMP STOP B.I.*PULL AROUND
NUMBER RECEIVED NUMBER DATE DATE DATE TIME
------ -------- ------ ---- ---- ---- ----
*Where preferred by Buyer
The log shall be transmitted to Buyer via Seller's fax and may be changed or
added to as mutually agreed to by Buyer and Seller.
4.5 (b) Seller shall provide Buyer with weekly and monthly
turn time reports and monthly non-conformance reports for each of Seller's
facilities, and for all facilities combined, that provided sterilization
processing services to Buyer during the period covered by the report.
4.6 Shipment of the Products by Seller. Seller agrees that
upon completion of processing, Seller's facilities can be used as a shipping
point for processed Products to locations determined by Buyer. Seller shall
cause the Products to be shipped in accordance with Buyer's written instructions
and Buyer shall pay all shipping charges. On all shipments of Products to be
shipped to a location other than one of Buyer's facilities, in addition to
paying all shipping charges, Buyer shall reimburse Seller for all direct and
indirect expenses incurred by Seller in preparing the shipments, including labor
and material handling expenses. When shipping the Products, Seller shall include
documents specifying the number of units in the shipment by
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product code and lot number. In the event that Buyer has notified Seller that
Buyer's Product is released for shipment from Seller, Seller is solely
responsible for notifying the common carrier within twenty-four (24) hours from
the time of notification of release by Buyer.
4.7 Storage of the Products by Seller. Buyer will remove
Product from Seller's processed product warehouse expeditiously after
processing, but Buyer may store Product in Seller's processed product warehouse
area for a maximum of [ * ] after sterile release without extra charges for
storage. Thereafter, Seller may charge Buyer for storage in Seller's warehouse
or in an outside warehouse selected by Seller at the prevailing rate for such
services and Seller shall have the option of returning such Product to Buyer at
Buyer's expense, provided Buyer has not previously given Seller shipping
instructions for such Product.
4.8 Product Damage Caused by Seller. If Product is damaged by
Seller as a result of Seller's failure to adhere to the parameters set forth in
Schedule A or by physical mishandling by Seller, Seller shall be responsible to
Buyer for the entire costs of the Product, billed to Seller at Buyer's
established manufacturing cost. Buyer will make every effort to keep cost to a
minimum by refurbishing and/or repackaging wherever feasible.
4.9 Buyer's Access to Seller's Facilities. During routine
ethylene oxide processing, Seller will allow authorized Buyer personnel to
observe the process, monitor procedures and have access to pertinent
sterilization process records. Buyer personnel may be present throughout the
qualification period. All visits to Seller's facilities by Buyer personnel will
be prearranged with Seller's Plant Manager.
4.10 Buyer's Access to Processing Records. Upon request,
Seller shall send Buyer duplicate copies of all sterilization processing records
deemed necessary by Buyer along with microbiological test packs (if required),
upon completion of sterilization process cycles, including degassing.
4.11 Non-sterile Markings. Buyer agrees that it will ship each
pallet, carton or other designated unit of the Products completely covered and
conspicuously marked to show its "non-sterile" nature. Such marking must be
sufficiently secure to prevent its accidental removal prior to release of the
Products from quarantine by Buyer. After the processing has been completed,
Seller will attach to each pallet, carton or other container of such Products a
label bearing the following works: "VACUGAS(R) Treated - Awaiting Sterility Test
Results." Buyer agrees that it will leave this label attached to each pallet,
carton or other container of the Products, and will keep each such pallet,
carton or other container in quarantine, until it has received a certificate of
specification compliance from its testing laboratory. As provided in Section
4.6, Seller agrees, upon authorization by Buyer, to release and ship product
after sterilization. Seller will develop a standard procedure to remove all of
Buyer's and Seller's labels showing "non-sterile" status and "Awaiting Sterility
Test Results". If non-compliance by Seller occurs, Seller shall audit the
respective facility within two (2) weeks and provide documentation of audit
results to Buyer.
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*Confidential Treatment requested; material filed separately with the
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4.12 Compliance with Laws. (a) Each of the parties agrees at
all times to conduct its operations in compliance with the applicable
requirements of 21 Code of Federal Regulations Part 801.150 ("Medical devices;
processing, labeling, or repackaging") and 21 Code of Federal Regulations Part
820 ("Good Manufacturing Practice for Medical Devices: General") or any
successor regulations. Seller agrees to obtain and keep current all applicable
licenses and permits required by applicable laws and regulations for the
operation of its plants that engage in processing under this Agreement. Seller
will notify Buyer in January of each calendar year that all applicable licenses
and permits have been obtained and are current.
(b) Buyer acknowledges that the State of California has
determined that ethylene oxide is a carcinogen and a reproductive toxin, and
that it is so listed under California's Safe Drinking Water and Toxic
Enforcement Act of 1986 ("Proposition 65"). The presence of ethylene oxide or
other gas residues in the Products following sterilization processing may
require warning labels under Proposition 65 or similar "right to know" laws in
other states. Buyer agrees to comply with any and all federal state and local
labeling requirements.
4.13 FDA Visits to Seller's Facilities. Seller shall notify
Buyer in writing within twenty-four (24) hours of an FDA investigation or audit
of any of Seller's facilities where Seller is processing Buyer's Products.
Seller shall notify Buyer of an FDA request to review any documents, Products or
practices pertaining to Buyer. Seller agrees to provide copies of all documents
reviewed by the FDA pertaining to Buyer or Buyer's Products. Seller will
provide, within two (2) weeks from the date of exit interviews, copies of FDA
investigation/audit reports and Seller's response to FDA for facilities at which
Seller is processing Buyer's Products.
5.0 CONFIDENTIAL INFORMATION. Buyer and Seller each acknowledges
that, in the course of performing its obligations pursuant to this Agreement, it
may obtain certain confidential and/or proprietary information belonging to the
other party, its affiliates or customers. Subject to the exceptions set forth in
this Section, each party agrees that information provided to it in writing or
reduced to writing within thirty (30) days after its communication to the
receiving party and which has been marked "confidential" shall be received in
strict confidence, shall be used only for the purpose of this Agreement and
shall not be disclosed by the receiving party, its agents or employees without
the prior written consent of the disclosing party, except as may be necessary by
reason of legal and regulatory requirements beyond the receiving party's
reasonable control. This obligation of confidentiality shall survive termination
of this Agreement but shall not apply to information which is (i) publicly known
or becomes publicly known through no act of the receiving party; (ii) rightfully
received from a third party; (iii) independently developed; or (iv) already
known to the receiving party. Each party agrees that any information disclosed
to it prior to the execution and delivery of this Agreement shall be subject to
and governed by the terms of this Section.
6.0 LIMITATION OF LIABILITY; INDEMNIFICATION
6.1 Obligation of Seller. (a) The parties agree that Seller's
obligation under this Agreement is limited to processing the Products in
accordance with the cycle parameters referred to in Section 4.1 hereof. Buyer
acknowledges that many factors beyond Seller's control can
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affect the ultimate microbiological condition of the Products. Among these are
the quality, type and original bioburden of the Products and their packaging,
the atmospheric humidity in the packaging room, the configuration of the
Products, the material of construction of the Products, the adequacy of the
testing laboratory atmosphere and equipment, the competence of testing
laboratory personnel, the competence and adequacy of sampling techniques, and
the care and handling of the Products during warehousing and distribution. BUYER
ACKNOWLEDGES AND AGREES THAT BUYER IS SOLELY AND EXCLUSIVELY RESPONSIBLE FOR THE
VALIDATION OF STERILIZATION PROCESSING AND PRODUCT STERILITY ASSURANCE, THE
INTEGRITY OF PRODUCT PACKAGING AND THE ADEQUACY OF PRODUCT LABELING. SELLER
MAKES NO REPRESENTATION, GUARANTEE, OR WARRANTY, EXPRESSED OR IMPLIED, WITH
RESPECT TO THE STERILITY OF THE PRODUCTS WHICH ARE PROCESSED HEREUNDER.
(b) The parties agree that Buyer's sole and exclusive remedy
in the event of Seller's failure to process the Products in accordance with the
cycle parameters referred to in Section 4.1 shall be the remedies provided in
Section 4.1(b) and 4.8. In no event shall Seller be liable for special,
indirect, incidental, or consequential damages, including but not limited to
damages arising from death, bodily injury, property damage other than damage to
the Products, loss of profits or revenue or loss of use of the Products.
6.2 Indemnification. (a) Buyer agrees to indemnify and save
Seller harmless from and against all expenses, losses, costs, deficiencies,
liabilities and damages, including reasonable attorneys' fees and expenses
(collectively, "damages") incurred or suffered by Seller arising out of or in
connection with (i) any breach by Buyer of any of its covenants or agreements
made in this Agreement, (ii) the processing of the Products, except to the
extent such damages are caused by negligent acts or omissions of Seller, or
Seller's failure to comply with the provisions of this Agreement, or (iii) any
claim that the Products are not sterile.
(b) Seller agrees to indemnify and save Buyer harmless from
and against all damages incurred or suffered by Buyer arising out of or in
connection with (i) any breach by Seller of any of its covenants or agreements
made in this Agreement and (ii) any negligent acts or omissions of Seller in the
processing of the Products.
7.0 TERMINATION
7.1 Termination for Material Breach. Upon the material breach
of any obligation under this Agreement by either party, the aggrieved party may
give to the defaulting party notice of such breach, which notice shall specify
the exact nature of the breach and shall expressly state the aggrieved party's
intention to terminate this Agreement in the event the breach is not remedied
within ninety (90) days after the receipt of such notice. If after the
expiration of such period, the defaulting party has failed or refuses to remedy
such breach, this Agreement may be terminated forthwith, effective upon notice
given by the aggrieved party to the defaulting party. The right of either party
to terminate this Agreement in the event of a breach hereof by the other party
is not an exclusive remedy for such breach, and, except as provided in Sections
2.3(b) and 6.1(b), either party shall also be entitled to any other remedy
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available under the laws of any applicable jurisdiction. This Agreement may also
be terminated by Seller or Buyer pursuant to Section 2.3(b).
7.2 No Waiver of Termination Rights. Any delay by either party
in sending any of the notices specified in Section 7.1 shall not constitute any
waiver of the sending party's right to terminate this Agreement.
7.3 Termination Not Unfair or Abusive. The parties agree that
any termination hereof according to the formalities specified herein, and based
on the conditions required by the provision under which such termination is
effected, shall not constitute an unfair or abusive termination or create any
liability not set forth in this Agreement of the terminating party to the other
party.
7.4 Survival of Certain Rights and Obligations. Neither the
expiration nor any termination of this Agreement for whatever cause shall affect
any rights or obligations of either party which have accrued as of the effective
date of such expiration or termination, nor shall it affect any rights or
obligations of either party which are intended by the parties to survive such
expiration or termination, including without limitation the rights and
obligations of the parties under Sections 5.0, 6.1, and 6.2 hereof.
8.0 GENERAL PROVISIONS
8.1 Notices. Any notice, request, information or other
document to be given hereunder to any of the parties by any other party shall be
in writing and delivered personally or sent by registered or certified mail,
postage prepaid, as follows:
If to Buyer, addressed as follows:
Xxxxxx Healthcare Corporation
Baxter Convertors/Custom Sterile
0000 Xxxxxxxx Xxxx, Xxxx. X
XxXxx Xxxx, Xxxxxxxx 00000
Attn.: Director of Distribution Logistics
Custom Sterile
If to Seller, addressed as follows:
Xxxxxxxx Micro Science, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxx 00000
Attn.: Xxxxx Xxxxx, Vice President Sales and Marketing
Any party may change the address to which notices hereunder are to be sent to it
by giving written notice of such change of address in the manner herein provided
for giving notice. Any notice delivered personally shall be deemed to have been
given on the date it is so delivered, and
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any notice delivered by registered or certified mail shall be deemed to have
been given on the date it is received.
8.2 No Waiver. The failure of either party hereto at any time
to require performance by the other party of any provision of this Agreement
shall in no way affect the right of such party to require performance of that
provision, and any waiver by either party of any breach of any provision of this
Agreement shall not be construed as a waiver of any continuing or succeeding
breach of such provision, a waiver of the provision itself or a waiver of any
right under this Agreement.
8.3 Governing Law. The validity, construction, interpretation
and enforcement of this Agreement, or any breach thereof, shall be governed by
the laws of the State of Illinois applicable to contracts made and to be
performed in that State.
8.4 Entire Agreement. This Agreement constitutes the final
written expression of the terms of agreement between the parties relating to the
subject matter contained herein and is the complete and exclusive statement of
these terms. This Agreement supersedes all prior agreements with respect to such
subject matter and merges all prior discussions between the parties. All
references to this Agreement shall be deemed to include the schedules hereto. No
provision in any purchase order or purchase order confirmation, whether entered
into prior to, concurrently with or after the execution and delivery of this
Agreement, shall be effective to the extent that such provision is inconsistent
with any provision of this Agreement
8.5 Amendments. This Agreement may be amended only by a
writing signed by a duly authorized representative of each party.
8.6 Severability. The provisions of this Agreement shall be
deemed severable, and the invalidity, unenforceability or illegality of any
provision of this Agreement shall not in any way affect or impair the validity,
enforceability or legality of the other provisions hereof.
8.7 Force Majeure. Neither party shall be liable to the other
for any delay or default in performance of any obligation under this Agreement
rising from causes beyond its control, including without limitation fire, storm,
flood, earthquake, explosion, accident, acts of public enemies, war, rebellion,
insurrection, sabotage, epidemic, quarantine restrictions, labor disputes or
shortages, transportation embargo, or failure or delays in transportation,
inability to secure gas, acts of Good, or acts of any governmental authority or
agency thereof. If one of Seller's facilities is shut down for a period of time
pursuant to the Occupational Safety and Health Administration ("OSHA")
Regulation 29 CFR Part 1910 or the environmental regulations of any state and
the facility cannot continue processing for Buyer, Seller shall utilize any of
its other processing facilities and shall be solely responsible for any
additional processing and transportation costs resulting therefrom during the
period of the shut down.
8.8 Assignment. (a) Except as provided in subsection (b) of
this Section, this Agreement is not assignable by either party without the prior
written consent of the other party hereto, which consent shall not be
unreasonably withheld, provided, however, either party may assign its rights and
delegate its obligations hereunder to an affiliate of the party. For purposes
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of this Agreement the term "affiliate" means, with respect to a specified
person, any other person which directly, or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with,
the person specified.
8.8 (b) Xxxxxx International Inc. ("Baxter") has publicly
announced its intention to spin off certain of its businesses as a separate
corporation (referred to until such time as a definitive name is announced as
"NewCo"). It is anticipated that NewCo will own the facilities listed on
Schedule A, which use or will use Seller's sterilization processing services.
Buyer agrees to assign this Agreement to NewCo and to cause NewCo to accept the
assignment and to comply with the terms and conditions of this Agreement. If
some of the business units that use Seller's sterilization processing services
are retained by Xxxxxx, Xxxxxx may, at its option, execute a separate unrelated
agreement with Seller.
8.9 Binding Agreement. Subject to the provisions of Section
8.8 hereof, this Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns.
8.10 Relationship. This Agreement does not create an agency
relationship or partnership between the parties, each party is an independent
contractor.
8.11 EEO Information. Seller is aware of and will comply with
applicable State and Federal laws and regulations that pertain to small business
and equal employment opportunity as attached hereto as Schedule D.
8.12 Schedules. The following schedules are attached to this
Agreement and are incorporated herein:
1. Schedule A: Process Control Standards (listed separately for each of
Buyer's manufacturing facilities).
2. Schedule B: [ * ]
3. Schedules B-1 through B-5: [ * ]
4. Schedule C: Continuing Guaranty, dated 9/28/87 (page 1 of 1).
5. Schedule D: EEO Information
6. Schedule E: Performance Criteria Schedule
In the event of any conflict between the express provisions of
the Schedule C and of this Agreement, the provisions of this Agreement shall
control.
---------------
*Confidential Treatment requested; material filed separately with the
Commission.
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IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their respective duly authorized officers as of the date first
above written.
XXXXXX HEALTHCARE CORPORATION XXXXXXXX MICRO SCIENCE, INC.
By: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx X. Xxxx
------------------------------------- -------------------------
Title: Vice President of Manufacturing Title: President and C.E.O.
--------------------------------- ------------------------
Its duly authorized officer Its duly authorized officer
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SCHEDULE A
PROCESS CYCLE SPECIFICATIONS
GMS LOCATION BAXTER DIVISION BAXTER LOCATION PRODUCTS
------------ --------------- --------------- --------
[ * ] Baxter Custom Sterile [ * ]
[ * ] Xxxxxx Healthcare [ * ]
[ * ] Baxter Convertors [ * ]
[ * ] Baxter Custom Sterile [ * ] Kits
[ * ] Baxter Custom Sterile [ * ] Kits
[ * ] Baxter Custom Sterile [ * ] Kits
[ * ] Baxter Custom Sterile [ * ] Kits
---------------
*Confidential Treatment requested; material filed separately with the
Commission.
18
[ * ]+
---------------
*Confidential Treatment requested; material filed
separately with the Commission.
+34 pages omitted.
19
SCHEDULE C
CONTINUING GUARANTEE
Seller guarantees that it will process Buyer's product according to Buyer's
specifications set forth in Schedule A and the terms and conditions of this
Agreement.
Seller will furnish to Xxxxxx Healthcare Corporation a Certificate of Insurance
evidencing the following insurance:
- Comprehensive general liability with contractual liability
coverage in the amounts of not less than $3,000,000 per
occurrence, combined single limit.
- Statutory only workers compensation coverage.
- Employer liability in the amount of $500,000.
- Auto liability coverage in the amount of $1,000,000.
Evidence of insurance should be forwarded to Director of Logistics/Distribution,
Baxter Custom Sterile, 0000 Xxxxxxxx Xxxx - Xxxxxxxx X, XxXxx Xxxx, Xxxxxxxx
00000.
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BAXTER SCHEDULE D
================================================================================
As a federal government contractor, Xxxxxx Healthcare Corporation, and its
affiliates are required to include in their subcontracts, vendor agreements and
supply contracts certain additional clauses and provisions imposed by federal
regulations. Contractor hereby agrees to the following terms and conditions
applicable to its agreements with Xxxxxx Healthcare Corporation or its
affiliates.
I. EQUAL EMPLOYMENT OPPORTUNITY CLAUSE (Applies To Contracts Of $10,000 Or
More)
During the performance of this contract, the Contractor agrees to the
provisions of the Equal Employment Opportunity Clause contained in
Executive Order 11246 of September 24, 1965 and incorporated in 41 CFR
60-1.4(a).
II. EMPLOYMENT OF VETERANS (Applies To Contracts Of $10,000 or More)
During the performance of this contact, the Contractor agrees to comply
with the federal Vietnam Era Veterans Readjustment Act and provisions
of 41 CFR 60-250.4 regarding equal employment opportunity for veterans.
III. EMPLOYMENT OF HANDICAPPED PERSONS (Applies To Contracts Of $25,000 Or
More)
During the performance of this contract, the Contractor agrees to
comply with the provisions of the Rehabilitation Act of 1973 and with
the provisions of 41 CFR 60.741.4 regarding equal employment
opportunities for handicapped persons.
IV. UTILIZATION OF SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS CONCERNS
(Applies To Contracts Over $10,000)
(a) It is the policy of the United States that small business concerns
owned and controlled by socially and economically disadvantaged
individuals shall have the maximum practicable opportunity to
participate in the performance of contracts let by any Federal Agency.
(b) The contractor hereby agrees to carry out this policy in the
awarding of subcontracts to the fullest extent consistent with the
efficient performance of this
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contract. The contractor further agrees to cooperate in any studies or
surveys as may be conducted by the Small Business Administration or the
contracting agency which may be necessary to determine the extent of the
contractor's compliance with the clause. (c) (1) As used in this contact,
the term "small business concern" shall mean a small business as defined
pursuant to section 3 of the Small Business Act and relevant regulations
promulgated pursuant thereto. (2) The term "small business concern owned
and operated by socially and economically disadvantaged individuals" shall
mean a small business concern - (i) which is at least 51 per centum owned
by one or more socially and economically disadvantaged individuals; or in
the case of any public owned business, at least 51 per centum of the stock
of which is owned by one or more socially and economically disadvantaged
individuals; and (ii) whose management and daily business operations are
controlled by one or more of such individuals. The contractor shall presume
that socially and economically disadvantaged individuals include Black
Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans,
and other minorities, or any other individual found to be disadvantaged by
the Small Business Administration pursuant to section 8 (a) of the Small
Business Act. (d) Contractors acting in good faith may rely on written
representations by their subcontractors regarding their status as a small
business concern owned and controlled by socially and economically
disadvantaged individuals.
All solicitations for negotiated for formally advertised contracts or amendments
or modifications (including contracts, amendments, and modifications placed on a
sole source basis), except those for procurement and setasides pursuant to
section 8 (a) and section 15 of the Small Business Act as amended which
individually are expected to exceed $5,000,000, or in the case of contracts for
the construction of any public facility, $1,000,000, and are required to include
the clause entitled Utilization of Small Business Concerns and Small Business
Concerns Owned and Controlled by Socially and Economically Disadvantaged
Individuals, shall include a provision which requires the apparent successful
offeror, provided the offeror is not a small business concern, to negotiate a
detailed subcontracting plan. The provision is as follows:
1. This provision does not apply to small business concerns.
2. The term "subcontract" means any agreement (other than one
involving an employer/employee relationship) entered into by a
Federal Government prime contractor or subcontractor calling
for supplies or services required for the performance of the
original contract or subcontract.
3. The offeror acknowledges that it is aware of the
subcontracting plan requirements in this provision, and if it
is the apparent successful offeror, and if the contract offers
subcontracting possibilities, agrees to negotiate or offer a
plan which includes:
a. Percentage goals (expressed in terms of percentage of total
planned subcontracting dollars) for the utilization as
subcontractors of small business
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concerns owned and controlled by socially and economically
disadvantaged individuals; (for the purposes of the
subcontracting plan, the contractor may include all purchases
which contribute to the performance of the contract, including
a proportionate share of products, services, etc., whose costs
are normally allocated as indirect or overhead costs.)
As part of its establishment of percentage goals, the apparent
successful offeror shall also include in its subcontracting
plan:
(1) A statement of: (a) total dollars planned to be
subcontracted; (b) total dollars planned to be subcontracted
to small business; and (c) total dollars planned to be
subcontracted to small disadvantaged business.
(2) A description of the principal product and service areas
to be subcontracted and an identification of those areas where
it is planned to use (i) small business subcontractors, and
(ii) small disadvantaged business subcontractors.
(3) A statement of the method used in developing proposed
subcontracting goals for (i) small business, (ii) small
disadvantaged business concerns.
(4) If the offerer includes indirect and overhead costs as an
element in establishing the goals in the subcontracting plan,
the method used in determining the proportionate share of
indirect and overhead costs incurred with (i) small business,
and (ii) small disadvantaged business subcontractors shall be
explained.
b. The name of an individual within the employ of the offeror
who will administer the subcontracting program of the offeror
and a description of the duties of such individuals;
c. A description of the efforts of the offeror will take to
assure that small business concerns and small business
concerns owned and controlled by socially and economically
disadvantaged individuals will have an equitable opportunity
to compete for subcontracts;
d. Assurances that the offeror will include the clause
entitled Utilization of Small Business Concerns and Small
Business Concerns Owned and Controlled by Socially and
Economically Disadvantaged Individuals in all subcontracts
which offer further subcontracting opportunities and to
require all subcontractors (except small business concerns)
which receive subcontracts in excess of $5,000,000, or in the
case of a contract for the construction of any public
facility, $1,000,000, to adopt and comply with a plan similar
to the plan agreed to by the offeror. Such assurances shall
describe the offeror's procedures for the review, approval,
and monitoring for compliance with such plans;
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e. Assurances that the offeror will submit such periodic
reports and cooperate in any studies or surveys as may be
required by the contracting agency or the Small Business
Administration in order to determine the extent of compliance
by the offeror with subcontracting plan; and
f. A recitation of the types of records the offeror will
maintain to demonstrate procedures which have been adopted to
comply with the requirements and goals set forth in the plan,
including the establishment of source lists of small business
concerns and small business concerns owned and controlled by
socially and economically disadvantaged individuals; and
efforts to identify and award subcontracts to such small
business concerns. The record shall include at least the
following (these records may be maintained on a plantwide of
companywide basis unless otherwise indicated):
(1) Small and disadvantaged business source list, guides and
other data identifying small and small disadvantaged business
vendors.
(2) Organizations contacted for small and disadvantaged
business sources.
(3) On a contract-by-contract basis, records on all
subcontract solicitations over $1,000,000, indicating on each
solicitation (a) whether small business was solicited, and if
not, why not; (b) whether small disadvantaged business was
solicited, and if not, why not; and (c) reasons for the
failure of solicited small business or small disadvantaged
business to receive the subcontract award.
(4) Records to support other outreach efforts:
- Contacts with minority and small business associations;
- Contacts with business development organizations;
- Attendance at small and minority business procurement
conferences and trade fairs.
(5) Records to support internal activities to guide and
encourage buyers:
- Workshops, seminars, training programs, etc.
- Monitoring activities to evaluate compliance.
(6) On a contract basis, records to support award data
submitted to the Government to include name and address of
subcontractor.
4. The offeror understands that:
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a. No contract will be awarded unless and until an acceptable
plan is negotiated with the contracting officer which plan
will be incorporated into the contract, as a material pert
thereof.
b. An acceptable plan must, in the determination of the
contracting officer, provide the maximum practicable
opportunity for small business concerns and small business
concerns owned and controlled by socially and economically
disadvantaged persons to participate in the performance of the
contract.
c. If a subcontracting plan acceptable to the contract officer
is not negotiated within the time limits prescribed by the
contracting activity and such failure arises out of causes
within the control and with the fault or negligence of the
offeror, the offeror shall be ineligible for an award. The
contracting officer shall notify the contractor in writing of
his reasons for determining a subcontracting plan to be
unacceptable. Such notice shall be given early enough in the
negotiation process to allow the contractor to modify the plan
within the time limits prescribed.
d. Prior compliance of the offeror with other such
subcontracting plans under previous contracts will be
considered by the contracting officer in determining the
responsibility of the offeror for award of the contract.
e. It is the offeror's responsibility to develop a
satisfactory subcontracting plan with respect to both small
business concerns and small business concerns owned and
controlled by socially and economically disadvantaged
individuals and that each such aspect of the offeror's plan
will be judged independent of the other.
f. The offeror will submit, as required by the contracting
officer, subcontracting reports in accordance with the
instructions thereon, and as further directed by the
contracting officer. Subcontractors will also submit these
reports to the government's contracting officer or as
otherwise directed, with a copy to the prime contractor's
designated small and disadvantaged business liaison.
5. The failure of any contractor or subcontractor to comply in
good faith with (a) the clause entitled Utilization of Small
Business Concerns and Small Business Concerns Owned and
Controlled by Socially and Economically Disadvantaged
Individuals or (b) an approved plan required by this Small
Business and Small Disadvantaged Business Subcontracting Plan
(Negotiated) provision, will be a material breach of such
contract or subcontract.
V. UTILIZATION OF WOMEN-OWNED BUSINESS CONCERNS (Applies To Contracts Over
$10,000)
(a) It is the policy of the United States Government that women-owned
businesses shall have the maximum practicable opportunity to
participate in the performance of contracts awarded by any Federal
agency.
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(b) The Contractor agrees to use his best efforts to carry out this
policy in the award of subcontracts to the fullest extent consistent
with the efficient performance of this contract. As used in this
contract, a "women-owned business" concern means a business that is at
least 51% owned by a woman or women who also control and operate it.
"Control" in this context means exercising the power to make policy
decisions. "Operate" in this context means being actively involved in
the day to day management. "Women" mean all women business owners.
The following clause shall be included in all contracts, amendments or
modifications expected to exceed $5,000,000 or in the case of contracts for the
construction of any public facility, $1,000,000 which require the Utilization
Clause in (1) above:
(A) The Contractor agrees to establish and conduct a program which
will enable women-owned business concerns to be considered
fairly as subcontractors and suppliers under this contract. In
this connection, the contractor shall:
(1) Designate a liaison officer who will administer the
Contractor's "Women-Owned Business Concerns Program."
(2) Provide adequate and timely consideration of the
potentialities of know women-owned business concerns
in all "make-or-buy" decisions.
(3) Develop a list of qualified bidders that are
women-owned businesses and assure that known
women-owned business concerns have an equitable
opportunity to compete for subcontracts, particularly
by making information on forthcoming opportunities
available by arranging solicitations, time for the
preparation of bids, quantities, specifications, and
delivery schedules so as to facilitate the
participation of women-owned concerns.
(4) Maintain records showing (i) procedures which have
been adopted to comply with the policies set forth in
this clause, including the establishment of a source
list of women-owned business concerns; (ii) awards to
women-owned businesses on the source list by minority
and nonminority women-owned business concerns; and
(iii) specific efforts to identify and award
contracts to women-owned business concerns.
(5) Include the "Utilization of Women-Owned Business
Concerns" clause in subcontracts which offer
substantial subcontracting opportunities.
(6) Cooperate in any studies and surveys of the
Contractor's women-owned business concerns procedures
and practices that the Contracting Officer may from
time-to-time conduct.
(7) Submit periodic reports of subcontracting to
women-owned business concerns with respect to the
records referred to in subparagraph (4) above,
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in such form and manner and at such time (not more
often than quarterly) as the Contracting Officer may
prescribe.
(B) The Contractor further agrees to insert, in any subcontract
hereunder which may exceed $5,000,000 or $1,000,000 in the
case of contracts for the construction of any public facility
and which offers substantial subcontracting possibilities,
provisions which shall conform substantially to the language
of this clause, including this paragraph (B), and to notify
the Contracting Officer of the Names of such subcontractors.
(C) The contractor further agrees to require written certification
by its subcontractors that they are bona fide women-owned and
controlled business concerns in accordance with the definition
of women-owned business concern as set forth in the
Utilization Clause 1(b) above at the time of submission of
bids or proposals.
VI. UTILIZATION OF LABOR SURPLUS AREA CONCERNS (Applies To Contracts Over
$10,000)
(A) It is the policy of the Government to award contracts to labor
surplus area concerns that (1) have been certified by the
Secretary of Labor (hereafter referred to respectively as
certified concerns with a first or second preference)
regarding the employment of proportionate number of
disadvantaged individuals and have agreed to perform
substantially (i) in or near sections of concentrated
unemployment or underemployment or in persistent or
substantial labor surplus areas or (ii) in other areas of the
United States; or (2) are noncertified concerns which have
agreed to perform substantially in persistent or substantial
labor surplus areas, where this can be done consistent with
the efficient performance of the contract and at prices no
higher than are obtainable elsewhere. The Contractor agrees to
use its best efforts to place its subcontracts in accordance
with this policy.
(B) In complying with paragraph (A) of this clause, the Contractor
in placing its subcontracts shall observe the following order
of preference: (1) certified concerns with a first preference
which are also small business concerns, (2) other certified
concerns with a first concerns, (3) certified concerns with a
second preference which are also small business concerns, (4)
other certified concerns with a second preference, (5)
persistent or substantial labor surplus area concerns which
are also small business concerns, (6) other persistent or
substantial area concerns, and (7) small business concerns
which are not labor surplus area concerns.
The Contractor further agrees that the following clause shall be
included in all contracts which may exceed $500,000 which contain the
clause required above and which, in the opinion of the procuring
activity, offer substantial subcontracting possibilities. Furthermore,
prime contractors who are to be awarded contracts which may not exceed
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$500,000 but which, in the opinion of the procuring activity, offer
substantial subcontracting possibilities, shall be urged to accept this
clause.
(A) The Contractor agrees to establish and conduct a program which
will encourage labor surplus area concerns to compete for
subcontracts within their capabilities. In this connection,
the Contractor shall -
(1) Designate a liaison with duly authorized
representatives of the Government on labor surplus
area matters, (ii) supervise compliance with the
Utilization of Concerns in Labor Surplus Areas
clause, and (iii) administer the Contractor's "Labor
Surplus Area Subcontracting Program";
(2) Provide adequate and timely consideration of the
potentialities of labor surplus area concerns in all
"make-or-buy" decisions;
(3) Assure that labor surplus area concerns will have an
equitable opportunity to compete for subcontracts,
particularly by arranging solicitations, time for the
preparation of bids, quantities, specifications, and
delivery schedules so as to facilitate the
participation of labor surplus area concerns;
(4) Maintain records showing procedures which have been
adopted to comply with the polices set forth in this
clause. Records maintained pursuant to this clause
will be kept available for review by the Government
until the expiration of one year after the award of
this contract, or for such longer periods as may be
required by any other clause of this contract or by
applicable law or regulations; and
(5) Include the Utilization of Concerns in Labor Surplus
Areas clause in subcontracts which offer substantial
labor surplus area subcontracting opportunities.
(B) A "labor surplus area concern" is a concern that (1) has been
certified by the Secretary of Labor (hereafter referred to as
a certified-eligible concern) regarding the employment of a
proportionate number of disadvantaged individuals and has
agreed to perform substantially in or near sections of
concentrated unemployment or underemployment, in persistent or
substantial labor surplus areas, or in other areas of the
United States, or (2) is a noncertified concern which has
agreed to perform a substantial proportion of a contract in
persistent or substantial labor surplus areas. A
certified-eligible concern shall be deemed to have performed a
substantial proportion of a contract in or near sections of
concentrated underemployment, in persistent or substantial
labor surplus areas, or in other areas if the costs that
concern will incur on account of manufacturing or production
in or near such sections or in such areas (by itself, if a
certified concern, or by certified concerns action as
fist-tier subcontractors) amount to more than 25
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percent of the contract price. A concern shall be deemed to
have performed a substantial proportion of a contract in
persistent or substantial labor surplus areas (by itself or
its first-tier subcontractors) if the costs that the concern
will incur on account of production or manufacturing in such
areas amount to more than 50 percent of the contract price.
(C) The Contractor further agrees to insert, in any subcontract
hereunder which may exceed $5,000,000 and which contains the
Utilization of Concerns in Labor Surplus Areas clause,
provisions which shall conform to the language of this clause,
including this paragraph, and to notify the Contracting
Officer of the names of such subcontractors.
VII. CLEAN AIR AND WATER
(Applicable only if the contract exceeds $1,000,000, or the contracting
officer has determined that orders under an indefinite quantity
contract in any one year will exceed $1,000,000, or a facility to be
used has been the subject of a conviction under the Clean Air Act (42
U.S.C. 1957c8(cX1) or the Federal Water Pollution Control Act (33
U.S.C. 1319(c) and is listed by EPA, or the contract is not otherwise
exempt.)
The contractor agrees as follows:
(A) To comply with all requirements of section 114 of the Clean
Air Act, as amended (42 U.S.C. 1857, et seq. as amended by
Pub. L. 91-604 and section 306 of the Federal Water Pollution
Control Act (33 U.S.C. 1251 et seq., as amended by Publ.
92-500), respectively, relating to inspection, monitoring,
entry, reports, and information, as well as other requirements
specified in section 114 and section 308 of the Air Act and
the Water Act, respectively, and all regulations and
guidelines issued thereunder before the award of this
contract.
(B) That no portion of the work required by this prime contract
will be performed in a facility listed on the Environmental
Protection Agency List of Violating Facilities on the date
when this contract was awarded unless and until the EPA
eliminates the name of such facility or facilities from such
listing.
(C) To insert the substance of the provisions of this clause into
any nonexempt subcontract, including paragraph (D).
The Contractor also agrees that it has or will provide Xxxxxx
Healthcare Corporation with a copy of all available material safety data sheets
for products furnished under this contract. The material safety data sheets will
include such information as product ingredients; physical characteristics;
storage, transportation and disposal requirements; firefighting methods; human
exposure limitations; and other environmental and safety hazards and
precautionary measures.
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SCHEDULE E
PERFORMANCE CRITERIA SCHEDULE - 1996
FOR BAXTER CONVERTORS/CUSTOM STERILE DIVISION
(To be reviewed quarterly)
Section
I. Turnaround period 2.4(a): Average of [ * ] working days in any
processing facility in any given month.
II. Aeration Period over which Seller agrees to meet its obligations
under Section 2.4 (b): Average of [ * ] working days in any processing
facility (including any backup facility used pursuant to Section
2.4(b)) in any given [ * ] consecutive day period.
III. Percent of loads processed with variations over which Seller agrees to
the provisions under Section 4.1(b): [ * ] of total loads in any
calendar month. Seller will make a continuing good faith effort to
reduce the percentage of total loads on which it fails to process in
accordance with cycle parameters.
---------------
*Confidential Treatment requested; material
filed separately with the Commission.
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ACKNOWLEDGEMENT OF AND AMENDMENT TO
STERILIZATION PROCESSING SERVICES AGREEMENT
This acknowledgement of and amendment to ("Acknowledgement")
the Sterilization Processing Services Agreement between Xxxxxxxx Micro Science,
Inc. ("Seller") and the Convertors/Custom Sterile Division of Xxxxxx Healthcare
Corporation, made and entered into as of the 1st day of January 1996
("Sterilization Agreement"), is made and entered into as of September 30, 1996
by and between Seller and Allegiance Healthcare Corporation.
RECITALS
On September 30, 1996, Xxxxxx Healthcare Corporation
("Xxxxxx") completed a spin-off of some of its business units and facilities to
a new corporation named Allegiance Healthcare Corporation ("Allegiance"). Among
the business units and facilities included in the spin-off were those for which
Seller performs sterilization services under the Sterilization Agreement.
Pursuant to Section 8.8(b) of the Sterilization Agreement, Baxter, referred to
as "Buyer" in the Sterilization Agreement, assigned to Allegiance and Allegiance
accepted the assignment of Xxxxxx'x rights and obligations under the
Sterilization Agreement. Since September 30, 1996, Allegiance has performed all
of Buyer's obligations and accepted all of Buyer's benefits under the
Sterilization Agreement. By this Acknowledgement, the parties hereto wish to
formally document that Allegiance has succeeded to Xxxxxx'x rights and
obligations under the Sterilization Agreement and Allegiance is bound by and
agrees to be bound by the terms and conditions of the Sterilization Agreement.
Allegiance and Seller also wish to amend the Sterilization Agreement as set
forth herein.
COVENANTS
Now, therefore, in consideration of the mutual covenants and
agreements hereinafter set forth and for other good and valuable consideration
the receipt and sufficiency of which is hereby acknowledged, the parties agree
as follows:
1. Seller and Allegiance acknowledge and agree that (a) Baxter
has assigned to Allegiance, and Allegiance has accepted the assignment of, all
of Xxxxxx'x rights and obligations under the Sterilization Agreement, (b) all
references to Baxter or Buyer in the Sterilization Agreement shall refer to
Allegiance and (c) Allegiance is bound by the terms and conditions of the
Sterilization Agreement.
2. The address specified in Section 8.1 of the Sterilization
Agreement for the sending of notices, requests, information or other documents
by Seller to Buyer shall be changed to:
Allegiance Healthcare Corporation
0000 Xxxxxxxx Xxxx, Xxxx. X
XxXxx Xxxx, Xxxxxxxx 00000
Attn.: Corporate Vice President of Manufacturing
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3. Seller and Allegiance ratify and affirm the Sterilization
Agreement as amended hereby. The Sterilization Agreement and this
Acknowledgement shall be read as one document.
IN WITNESS WHEREOF, the parties have caused this
Acknowledgement to be executed by their respective duly authorized officers.
ALLEGIANCE HEALTHCARE XXXXXXXX MICRO SCIENCE, INC.
CORPORATION
By: /s/ Xxxxxx Xxxxxxxxx By: /s/ Xxxx X. Xxxxxxxxxx
-------------------------------------- -------------------------
Title: Vice President of Manufacturing Title: Senior Vice President and
----------------------------------- Chief Financial Officer
Its duly authorized officer ---------------------------
Its duly authorized officer
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