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Exhibit 10.16
FACILITIES OPERATION AGREEMENT
THIS FACILITIES OPERATION AGREEMENT (the "Agreement") is made as of May 25th,
2000, between LIFE SCIENCES, INC. a Delaware corporation ("LSI") and ORGANON
TEKNIKA B.V., a private company with limited liability, incorporated under the
laws of The Netherlands ("TEKNIKA"), and is made with reference to the
following facts:
(A) On or about May 25th, 2000, LSI and TEKNIKA entered into a Supply
Agreement (the "Supply Agreement") wherein LSI agreed to supply to TEKNIKA the
"Products" (as defined therein). All terms and provisions of the Supply
Agreement are incorporated in this Agreement by this reference.
(B) The Supply Agreement, among other things, requires LSI to provide
certain amounts of Products to TEKNIKA (the "Products Requirements") in a timely
manner. Should LSI fail to fulfill the requirements as described in the Supply
Agreement, TEKNIKA desires to be granted the right to: (i) introduce a person of
its own selection into LSI's production facilities to direct the utilization of
such property and employees of LSI as are necessary or appropriate to cause the
Products Requirement to be fulfilled in accordance with the Supply Agreement;
and (ii) receive from LSI a license of certain "know how"; and a right to
purchase a bulk quantity of avian myeloblastosis virus (AMV); a quantity of AMV
suitable for innoculum into avian hosts to produce additional virus; and seed
cultures of relevant bacterial strains that will enable it to produce the
required amounts of some of the Products. To accomplish the foregoing, on or
about the date hereof, LSI, as licensor, and TEKNIKA, as licensee, have entered
into a license agreement wherein such "know how" is licensed from LSI to TEKNIKA
(the "License Agreement"). All terms and provisions of the License Agreement are
incorporated in this Agreement by this reference.
(C) The parties intend this Agreement to be effective only upon the
failure of LSI to meet TEKNIKA's periodic requirements for Products as required
by the Supply Agreement. As such, this Agreement shall only become effective
upon a "Triggering Event", as defined below.
(D) Assuming a Triggering Event has occurred, the purpose of this
Agreement is to grant from LSI to TEKNIKA the right to have access to and
utilize the resources of LSI necessary to insure the fulfillment of the Products
Requirement.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, LSI and TEKNIKA agree
as follows:
1. RECITALS. The recitals of facts set forth above are true and
correct and are by this reference made a part thereof.
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2. FACILITIES OPERATION. Upon the occurrence of a Triggering
Event, the following rights and obligations as between the parties hereto shall
immediately arise:
(a) Written Notice. In the event LSI is unable or
unwilling to manufacture or supply the Products as required by the Supply
Agreement ("Triggering Event"), the Contingency Plan, as defined in the Supply
Agreement of which this Agreement forms a part, may be invoked by Teknika in
accordance with Article 11.2 of the Supply Agreement. Teknika will notify LSI
that it considers that a Triggering Event has occurred.
(b) Effectiveness of Agreement. On the fifth (5th)
business day following LSI's receipt of written notice of the Triggering Event,
and assuming LSI does not dispute the veracity of TEKNIKA's notice of a
Triggering Event, this Agreement is required to be executed and delivered.
(c) Purchase Order from Teknika. Upon the effectiveness
of this Agreement and the License Agreement, TEKNIKA shall immediately send to
LSI a purchase order for four hundred and fifty (450) grams of AMV at $427.00
per gram (the "AMV Purchase Order"). Upon LSI's receipt of the AMV Purchase
Order, it shall immediately cause to be available for pick up by TEKNIKA or its
representatives at LSI's property all of the AMV that it has on site up to 450
grams. Upon the tendering of such AMV, TEKNIKA shall pay for the full amount of
AMV delivered at the price indicated above, in cash or cash equivalent.
(d) TEKNIKA Supervision. Upon LSI's receipt of the
payment the AMV described in subsection (c) next above, LSI shall immediately
make available a portion of its premises whereby an authorized representative
of TEKNIKA (the "TEKNIKA Representative") may oversee the future short term
production of Products by LSI, all to be performed in accordance with the terms
and provisions of the Supply Agreement. The following guidelines shall govern
the conduct of the TEKNIKA Representative while he or she is on site at LSI's
property:
(i) The TEKNIKA Representative may only have
access to the portions of LSI's property that are necessary for TEKNIKA to
confirm that the Product is being generated, as determined by the "Know How"
provided under the License Agreement.
(ii) To the extent the TEKNIKA Representative
makes changes to the know how that is being licensed to TEKNIKA under the
terms of the License Agreement:
(A) TEKNIKA shall pay to LSI upon
demand all increased costs of production associated with the Products that
would not otherwise have been incurred, but for the TEKNIKA Representative's
changes to the procedures and protocol for production of the Products; and
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(B) TEKNIKA assumes all liability,
obligation and responsibility for any changes to the Products resulting from
TEKNIKA Representative's changes to the "Know How" obtained through the License
Agreement.
3. TERM. The term of this Agreement shall begin as defined in
paragraph 2(b). Upon resumption of the manufacture of the Products at a level
sufficient to fulfill the Product Requirement, LSI shall notify TEKNIKA in
writing of the termination of this Agreement (a "Termination Notice"). Upon LSI
tendering the Termination Notice to TEKNIKA, the parties shall immediately take
such actions as are reasonably necessary to wind up this Agreement, including,
without limitation, the removal of all raw materials for the production of the
Products owned by TEKNIKA from LSI's property, the removal of the TEKNIKA
Representative from LSI's property, and a final accounting shall be generated
by LSI of the Production Costs (as defined below). Upon payment of all such
sums, this Agreement shall automatically revert to a standby status without
further action by any party hereto.
4. PRODUCTION COSTS. In consideration of the rights granted to
TEKNIKA under this Agreement, TEKNIKA hereby agrees to pay to LSI the price for
the Products manufactured under the terms of this Agreement, as set forth in
the Supply Agreement, less the value of the avian myeloblastosis virus
component used to produce such Products and previously purchased by TEKNIKA
from LSI. TEKNIKA shall pay to LSI the adjusted price for the Products within
15 business days of LSI's invoice for the Products.
5. LIMITATION AND INDEMNITY. LSI shall not be liable to TEKNIKA,
or any of its agents, employees, servants or invitees, including the TEKNIKA
Representative (collectively the "TEKNIKA Parties") for any injury to persons
or damage to property due to the condition of LSI's property which may exist or
subsequently occur, and TEKNIKA, with respect to itself and the TEKNIKA
Parties, hereby expressly assumes all risks and injury to persons and damage to
property, either proximate or remote by reason of the present or future
condition of such property. TEKNIKA agrees that it will indemnify and hold
harmless LSI from and against all suits, claims and actions of every kind by
reason of any breach, violation or nonperformance of any term or conditions on
the part of TEKNIKA hereunder. Additionally, TEKNIKA agrees to indemnify and
hold LSI harmless from and against all claims, actions, damages, liabilities
and expenses asserted against LSI on account of injuries to persons or damage
to property when and to the extent that any such damage or injury may be
caused, either proximately or remotely, wholly or in part by any act or
omission, whether negligent or not, of TEKNIKA and the TEKNIKA Parties,
contractors, patrons or invitees or of any other person entering on LSI's
property under or with the expressed or implied invitation of TEKNIKA, or if
any such injury or damage may in any other way arise from or out of the
occupancy or use by the TEKNIKA Parties of LSI's property. This paragraph is
for the benefit of LSI only, and no right of action shall accrue hereunder to
any third party by way of subrogation or otherwise.
6. DEFAULT
(a) Any of the following events shall be deemed to be an
event of default by TEKNIKA under this Agreement:
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(i) TEKNIKA shall fail to make any payment
required under this Agreement within five (5) days after it is
due.
(ii) The License Agreement shall be terminated.
(iii) TEKNIKA shall become insolvent, or shall
make a transfer in fraud of creditors or shall make an
assignment for the benefit of creditors.
(iv) TEKNIKA shall file a petition under any
bankruptcy act, or under any similar law or statute of any
jurisdiction.
(v) There shall be filed against TEKNIKA an
involuntary petition in bankruptcy or insolvency or a similar
proceeding, and such filing or proceeding shall not be
dismissed within ninety (90) days.
(vi) A receiver or trustee shall be appointed for
all or substantially all of the assets of TEKNIKA or for the
assets of TEKNIKA which utilize the Products.
(vii) TEKNIKA's interest under this Agreement is
sold under execution or other legal process.
(b) Upon the occurrence of an event of default, LSI, in
addition to all other rights or remedies that may have, shall have the right to
immediately terminate this Agreement, and dispossess TEKNIKA, and the TEKNIKA
Representative, of its license to be on LSI's property, and to also terminate
the License Agreement and all other aspects of this Agreement.
If LSI at any time terminates this Agreement for any breach, in addition to
other remedies, LSI may recover from TEKNIKA all damages it may incur by reason
of such breach, including reasonable attorney's fees, all of which amounts
shall be immediately due and payable from TEKNIKA to LSI.
7. GENERAL.
(a) This Agreement embodies as refers to the entire
agreement between the parties hereto relative to the subject matter
hereof and shall not be modified, changed, or altered in any respect
except in writing. Where the terms of this Agreement conflict with the
terms of the Supply Agreement or the License Agreement, the terms of
this Agreement will prevail.
(b) The covenants, agreements, and obligations herein
contained shall extend to, bind, and inure to the benefit not only of
the parties hereto but their successors and assigns.
(c) Any notice, request, demand or other communication
which is required or may be given under this Agreement shall be in
writing and shall be deemed to have
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been duly given: (i) if transmitted by telecopy, electronic telephone
line facsimile transmission or other similar electronic or digital
transmission method, when transmitted; (ii) if sent by a nationally
recognized next day delivery service that obtains a receipt on delivery
the day after it is sent; (iii) if mailed, first class registered or
certified mail, postage prepaid, 3 days after it is sent or when
actually received, whichever is sooner; and (iv) in any other case,
when actually received. All notices to be given hereunder shall be
given as follows:
If to LSI: Xxxx Xxxxx
Vice President
Life Sciences, Inc.
0000 00xx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
If to TEKNIKA: Xxxxxx xxx Xxxxxx
Organon Teknika B.V.
Boseind 15,5281
XX Xxxxxx, The Netherlands
Facsimile: 00-000-000-000
8. GOVERNING LAW. This Agreement is to be construed under the laws of
the State of Florida. Should any provisions of this Agreement and/or of its
conditions be illegal or unenforceable under any court decision or any laws,
ordinances or regulations of any governing authority having jurisdiction over
the parties hereto, it or they shall be considered severable, and all other
provisions of this Agreement shall remain in full force and be binding upon the
parties as though the illegal or unenforceable provisions had never been
included. The venue for any action hereunder shall be Pinellas County, Florida.
English shall be the official language of this Agreement.
9. DISPUTE RESOLUTION.
(a) 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 can not be resolved in the normal course of business, any interested
party shall give the other party written notice of any such dispute not
resolved, after which the dispute shall be referred to more senior executives of
both parties, who shall likewise attempt to resolve the dispute.
(b) 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 with twenty (20) days as from such notice, the parties shall
endeavor to settle the dispute by binding arbitration under the then prevailing
rules of the American Arbitration Association. The arbitration shall be
conducted in St. Petersburg, Florida.
This paragraph 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. SECTION HEADINGS. The section headings of this Agreement are for
convenience
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only and shall not be considered in the interpretation of the terms and
provisions of this Agreement.
11. CONFIDENTIALITY. The parties hereto agree that the
confidentiality standards and that are contained in the Supply Agreement are
incorporated in this Agreement by this reference.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and first above written.
LSI
LIFE SCIENCES, INC.,
By: /s/ Xxxx Xxxxx
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Xxxx Xxxxx
Its Vice President
(CORPORATE SEAL)
TEKNIKA:
ORGANON TEKNIKA B.V.
By: /s/ Dr. R. Salsmans
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Dr. R. Salsmans, President
By: /s/ A.J.F. Stap
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A.J.F. Stap, Executive Vice President
(CORPORATE SEAL)
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