Exhibit 10.10
DEVELOPMENT, MANUFACTURING AND SUPPLY AGREEMENT
This AGREEMENT (the "Agreement") dated as of June 28, 2005 (the "Effective
Date") between Xxxxxx Xxxx Corporation, a Delaware corporation, having its
principal place of business at 00 Xxxx Xxxxxxx Xxxxxx, Xxxxx, XX 00000
(hereinafter referred to as "KNC") and BioMimetic Pharmaceuticals Inc., a
Delaware corporation, having its principal place of business at 000 Xxxxxx Xxxx
Xxxx, Xxxxxxxx, XX 00000 (hereinafter referred to as "BMPI").
WHEREAS, KNC is a company engaged in the development, marketing and sale of
medical devices for a wide variety of applications;
WHEREAS, KNC has expertise in developing and manufacturing proprietary
biomaterials for medical applications and desires to develop products with BMPI
under the terms of this Agreement;
WHEREAS, BMPI has rights in the Field to recombinant platelet derived
growth factor ("PDGF", as further defined in Section 1.31) Molecule(s)
(hereinafter referred to as the "Proprietary Molecule(s)") and certain rights to
a proprietary tri calcium phosphate ("TCP"); and
WHEREAS, BMPI desires KNC to develop a delivery matrix and delivery devices
utilizing BMPI's Proprietary Molecule(s) to be used in treatment of
musculoskeletal tissues including bones, cartilage, tendons and ligaments, and
KNC desires to manufacture such products and sell them to BMPI and BMPI desires
to distribute such products under the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements provided herein, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. DEFINITIONS
1.1. "Act" shall mean the Federal Food, Drug and Cosmetic Act.
1.2. "Approval(s)" shall mean receipt from the FDA or other applicable
Regulatory Authority of final approval, including any applicable pricing,
final labeling or reimbursement approvals, necessary to manufacture, market
and sell a Commercial Product in a country of the Territory.
1.3. "Approved Commercial Product" shall have the meaning set forth in Section
6.1 (e).
1.4. "BMPI Indemnified Party" shall have the meaning set forth in Section 15.1.
1.5. "Claim(s)" shall mean all charges, complaints, actions, suits, proceedings,
hearings, investigations, claims and demands.
1.6. "Commercial Product" shall mean any combination of Product and PDGF for
distribution to the end user, whether by (a) inclusion in the same package,
but not combined; (b) being sold separately but for use together in
combination; or (c) being sold as a combined formulation.
1.7. "Confidential Information" shall mean all oral or written information that
is disclosed by either party (the "Disclosing Party") to the other party
(the "Receiving Party"), or that the Receiving
CONFIDENTIAL
Party becomes aware of as a result of its discussions and work with the
Disclosing Party, and that is not generally known to the public, including
but not limited to, information of a technical nature such as trade
secrets; manufacturing processes or devices or know-how; techniques, data,
formulas, inventions, discoveries or innovations (whether or not
patentable), specifications and characteristics of current products or
products under development; research projects, methods and results; matters
of a business nature such as information about costs, margins, pricing
policies, markets, sales, suppliers and customers; product, marketing or
strategic plans; financial information; personnel records and other
information of a similar nature, provided, however, that Confidential
Information shall not include any information that (i) is or becomes public
knowledge without breach of the Receiving Party's obligations hereunder;
(ii) is rightfully acquired by the Receiving Party from a third party that
legally acquired the information and is not under a confidentiality
restriction on disclosure or use; (iii) was already known to the Receiving
Party prior to receipt from the Disclosing Party as evidenced by written
and dated records; (iv) is independently developed by the Receiving Party;
(v) is required to be disclosed by law or court order, provided that notice
of the requirement is promptly delivered to the Disclosing Party in order
to provide the Disclosing Party with an opportunity to challenge or limit
the disclosure obligations; or (vi) is disclosed or used following the
Receiving Party's receipt of express written consent from an authorized
representative of the Disclosing Party. The Receiving Party shall have the
burden of proof respecting any of the aforementioned events on which the
Receiving Party relies as relieving it of any confidentiality restrictions
hereunder. Written disclosures for which protection is sought must be
obviously marked as "Confidential" or "Proprietary" and oral disclosures
for which protection is sought must at the outset be clearly identified by
the Disclosing Party as Confidential Information and submitted by the
Disclosing Party in summary form to the Receiving Party, marked as above
within thirty (30) days after disclosure; provided, however, that
protection under Article 9 shall also be given to information that is not
so marked if a reasonable person trained in research, development,
manufacturing and marketing within the Field would assume that it is
Confidential Information. For written information that would not normally
appear to constitute confidential information, for the restrictions on
Confidential Information to apply, a party must xxxx such information
"CONFIDENTIAL."
1.8. "Costs of Doing Business" shall mean the usual, customary, and reasonable
trade, cash or quantity discounts actually allowed and taken and amounts
repaid, or credited by reason of rejections, defects, recalls and returns.
1.9. "Design History File" shall have the meaning set forth in Title 21 of the
US Code of Federal Regulations, Part 820.
1.10. "Development Plan" shall mean the plan for development and approval by FDA
and other Regulatory Authorities of Commercial Products and Products as
hereinafter defined, as set forth in Schedule A. The parties may modify and
amend Schedule A from time to time throughout the Term as required to
assure successful commercialization of the Commercial Products.
1.11. "Device Master File" shall mean materials that may be used to provide
detailed information to the FDA about facilities, processes, or articles
used in the manufacturing, processing, packaging, and storing of the
Products or Material.
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1.12. "Disclosing Party" shall have the meaning set forth in Section 1.7.
1.13. "Distributor" shall mean any entity designated by BMPI to advertise,
promote, market, distribute and sell the Commercial Products.
1.14. "Evaluation Studies" shall have the meaning set forth in Section 2.2.
1.15. "Feasibility Period" shall have the meaning set forth in Section 2.2.
1.16. "FDA" shall have the meaning set forth in Section 3.7.
1.17. "Field" shall mean treatment of musculoskeletal indications including,
bone, cartilage, tendons and ligaments of the skeletal tissue system.
1.18. "First Commercial Sale" shall mean the first sale of Approved Commercial
Product to an end user or hospital.
1.19. "Governmental Authority" shall mean any court, tribunal, arbitrator,
agency, department, legislative body, commission or other instrumentality
of (a) any government of any country, (b) any foreign, federal, state,
county, city or other political subdivision thereof or (c) any
supranational body.
1.20. "Gross Sales" shall mean the amount invoiced by BMPI or any agent,
affiliate, or distributor to any end user of Commercial Product in the
United States, not to include any shipping costs or taxes; plus the gross
revenues recognized by BMPI using generally accepted accounting principals
(consistently applied) for sales of Commercial Product outside the United
States.
1.21. "Initial Term" shall have the meaning set forth in Section 2.1.
1.22. "Injectable Products" **
1.23. "Intellectual Property" shall mean all inventions, discoveries and
innovations (whether patentable or unpatentable and whether or not reduced
to practice), all improvements thereto, and all patents, patent rights,
patent applications and invention disclosures, together with all reissues,
continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, all registered or unregistered trademarks, trade
names and service marks, including all goodwill associated therewith, and
copyrights, and all applications and registrations for any of the foregoing
owned or controlled by or issued to BMPI or KNC, and any trade secrets and
know-how, in each case relating to the Commercial Products in the Field in
the Territory.
1.24. "KNC Indemnified Party" shall have the meaning set forth in Section 15.2.
1.25. "Letter of Reference" shall mean a letter addressed to the FDA authorizing
BMPI to reference KNC's Master File for support in regulatory filing for
Commercial Product.
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** REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
1.26. "Losses" shall mean any and all damages, awards, deficiencies, settlement
amounts, defaults, assessments, fines, dues, penalties, costs, fees,
liabilities, obligations, taxes, liens, losses, and expenses (including
without limitation court costs, interest and reasonable fees of attorneys,
accountants and other experts) incurred by or awarded to third parties and
required to be paid to third parties with respect to a Claim by reason of
any judgment, order, decree, stipulation or injunction, or any settlement
subject to the indemnification provisions of this Agreement, together with
all documented out-of-pocket costs and expenses incurred in complying with
any judgments, orders, decrees, stipulations and injunctions that arise
from or relate to a Claim of a third party.
1.27. "Material" shall mean a KNC-developed proprietary collagenous biomaterial
whose collagen component contains solely bovine closed-herd collagen in
compliance with the specifications set forth in Schedule B.
1.28. "MDR" shall have the meaning set forth in Section 4.5(h).
1.29. "Net Sales Price" shall **
1.30. "Net Sales" shall mean Gross Sales of Commercial Product less any Costs of
Doing Business.
1.31. "PDGF" shall mean a PDGF molecule comprised of two chains connected by
disulfide bonds with each of these chains consisting of one of the
following forms of PDGF: PDGF-A; PDGF-B; PDGF-C; or PDGF-D.
1.32. "Post Term Supply" shall have the meaning set forth in Section 2.1.
1.33. "Product Drawing" shall mean a drawing illustrating or defining the
packaging configuration and related details for any Commercial Product.
1.34. "Product Specifications" shall mean the specifications detailing the
various Products, as shown in Schedule C.
1.35. "Product Warranties" shall have the meaning set forth in Section 11.1.
1.36. "Product(s)" shall mean the Injectable Products, Putty Products and the
Sheet Products.
1.37. "Proprietary Molecule(s)" shall have the meaning set forth above in the
preamble.
1.38. "Purchase Orders" shall have the meaning set forth in Section 5.3.
1.39. "Putty Products" **
1.40. "Purchase Commitment" shall have the meaning set forth in Section 4.5(e).
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** REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
1.41. "QSR" shall mean the Quality System Regulation promulgated by the FDA
under the Act or other applicable regulatory agencies of countries in which
the Commercial Product will be sold as of the time of manufacture of the
applicable Commercial Products; including ISO 13485, the European Union
Council Medical Device Directives (the "EU Medical Device Directives"), and
the Quality System Regulations as described in 21 CFR Part 820.
1.42. "Receiving Party" shall have the meaning set forth in Section 1.7.
1.43. "Regulatory Authority" shall mean an authority or authorities designated
or otherwise recognized by a government for regulatory purposes in
connection with protection and safety of the public health (e.g., FDA,
Notified Bodies, Health Canada, EMEA) in any country where Commercial
Product is to be sold.
1.44. "Renewal Term" shall have the meaning set forth in Section 2.1.
1.45. "Rolling Forecast" shall have the meaning set forth in Section 4.5(e) and
shall resemble the example in Schedule E.
1.46. "Royalty" shall have the meaning set forth in Section 6.2.
1.47. "Sheet Products" shall mean the sheet form carrier made from the Sheet
Technology which may incorporate BMPI's TCP, as set forth in the Product
Specifications in Schedule C.
1.48. "Sheet Technology" shall mean **
1.49. "Submission" shall have the meaning set forth in Section 3.6.
1.50. "Term" shall have the meaning set forth in Section 2.1.
1.51. "Territory" shall mean worldwide.
1.52. "Transfer Price" shall mean the price paid by BMPI to KNC for the Product,
as set forth in Section 5.1 hereof.
1.53. "USPTO" shall mean the United States Patent and Trademark Office.
2. TERM
2.1 Term. This Agreement shall commence on the Effective Date and, unless
earlier terminated as provided herein, continue for ten (10) years from the
date of BMPI's First Commercial Sale of the Commercial Products (the
"Initial Term"). The Initial Term shall be automatically extended for two
(2) additional two (2) year terms (the "Renewal Terms"), unless written
notice of any party's intention not to extend is provided by either party
at least twelve (12) months prior to the expiration of the Initial Term or
a Renewal Term (the Initial Term and the Renewal Terms are collectively
referred to as the "Term"); however, should any such notice of non-renewal
be given by KNC, KNC shall supply Product(s) for an additional twelve (12)
months following the expiration of the then
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** REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
current Term (the "Post Term Supply"). Notwithstanding the foregoing, if
the First Commercial Sale has not occurred within seven (7) years of the
Effective Date, the Agreement will automatically terminate unless otherwise
agreed to by the parties in writing.
2.2 Feasibility Period. Notwithstanding the foregoing Section 2.1, during the
period commencing on the Effective Date and continuing until December 31,
2005 or until the specified tests are completed and assessed, whichever is
earlier, (the "Feasibility Period"); BMPI will evaluate the suitability of
the Putty Products and/or Injectable Products to produce Commercial
Products. Such evaluation will consist of the following studies (the
"Evaluation Studies"):
a. Efficacy Study: wherein the success criteria is defined as
evidenced by "enhanced regeneration of bone" in at least one of
the following studies:
o Rat Fracture Model: 5 week duration with evaluation of
success by one or more of the following tests: micro CT,
Histology or biomechanical tests.
o Rabbit Distal Femoral Condyle Implantation Study, where
evaluation of success will be measured by one or more of the
following tests: micro CT or histology (it is contemplated
that this study may be changed to a more beneficial study,
with corresponding endpoints, any such change must be agreed
to by both parties).
o Distraction Osteogenesis Study, where evaluation of success
will be measured by radiographic and histologic analysis.
b. In Vitro Elution Study: wherein the success criteria are defined
as release of the PDGF in a profile of twenty-five (25) to
seventy (70) percent release within seven days, and greater than
ninety percent (90%) within thirty (30) days.
c. Manufacturing Capability Verification and Development Material
Acceptability - where BMPI will review KNC's ability to
manufacture contemplated Products in accordance with applicable
QSR, and forecasted capacity requirements. Moreover, all
developmental studies shall be performed with Materials that are
representative of those to be used in Commercial Product and BMPI
shall have the opportunity to review such information, with such
review to include a physical audit of KNC, pursuant to the
commercial audit process as prescribed in Section 7.8 of this
Agreement.
d. In-Vitro Cell Culture Analysis, wherein the success criteria are
defined as the ability of osteoblast cells to grow on the
Material, and the demonstrated release of biologically active
PDGF from the Material as measured by the stimulation of cell
replication.
e. Injectability, **
At the conclusion of the Feasibility Period or Evaluation Studies,
whichever occurs first, the parties will determine whether the Products are
likely to be used successfully in combination with PDGF.
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** REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
If the parties determine that the Development Plan and Products are capable
of producing Commercial Products by meeting at least one of the defined
success criteria under Section 2.2(a) and the success criteria of Sections
2.2(b), 2.2(d), and 2.2(e), and the Criteria of Section 2.2(c), this
Agreement shall continue in full force and effect according to its terms
and conditions; otherwise, either party shall have the right, but not the
obligation, to terminate this Agreement.
3. DEVELOPMENT PROGRAM
3.1 Development Roles. Subject to the terms of this Agreement, KNC agrees, in
consultation with BMPI, to work in good faith to develop the Products in
accordance with a Development Plan to be agreed to by the parties and as
incorporated as Schedule A. KNC and BMPI will jointly define the Commercial
Products' specifications to meet market requirements. KNC will conduct
engineering, research and development, and manufacturing of Products **.
BMPI will advise and provide feedback on product development progress,
including medical input to provide assistance in the definition of the
end-user product requirements and marketing specifications. The parties
shall confer to update the Development Plan, as necessary, regarding the
on-going exchange of proprietary information, the resources to be devoted
to the development of the Commercial Products, scheduling of meetings,
estimated development timetables, milestones, testing of prototypes, and
timing of deliverables. Except as otherwise set forth herein or in the
Development Plan, each party shall pay its own expenses incurred in
performing its obligations under the Development Plan.
3.2 Design Review and Design Control. BMPI is developing, for regulatory
purposes, products termed by the US FDA as 'combination products'. The
responsibilities for Design Review and Design Control are shared
responsibilities between Development and Commercialization programs and
activities. For regulatory purposes, BMPI shall maintain overall
responsibility for the Design History Files of all Commercial Products. KNC
agrees, in consultation with BMPI, to provide the necessary studies to
support the Design History File subject to Section 3.6.
3.3 Project Leader. Each party shall appoint a Project Leader who shall be
responsible for the day-to-day development efforts being conducted under
this Agreement as set forth in the Development Plan. The Project Leader for
each party shall be responsible for ensuring that the programmatic,
technical, reporting, financial, and administrative responsibilities for
the party are performed in compliance with this Agreement and shall
participate as necessary to facilitate the integration of the efforts being
conducted.
3.4 Efforts. Each party will use commercially reasonable efforts, and will
devote sufficient time, attention and qualified personnel, to meet the
delivery dates for any deliverables and other matters agreed to in the
Development Plan in accordance with this Agreement. The parties will
provide each other with such technical support relating to the development
of the Commercial Products as reasonably necessary for the parties to
develop the Commercial Products. The parties acknowledge that in connection
with the development of the Commercial Products, each of the parties may
need access to certain Confidential Information of the other party that
will be subject to the confidentiality provisions set forth in Article 9
hereof. Each party agrees to notify the other promptly of any factor,
occurrence, or event coming to its attention that may affect that party's
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** REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
ability to meet the requirements of the Development Plan or the development
program generally, or that is likely to cause any material delay in the
delivery of deliverables.
3.5 Personnel and Resource Commitment. During the course of the development
program, each party will commit an appropriate amount of personnel and
other resources as reasonably necessary to meet the requirements of the
Development Plan. During the course of the Development Program,
representatives of the parties shall meet at times and places mutually
agreed upon to discuss the progress and results as well as any ongoing
plans or changes to the Development Plan.
3.6 Sharing of Data. KNC shall provide BMPI with sufficient data and
information as specified by BMPI to support regulatory submissions and
correspondence to all regulatory authorities relating to the Commercial
Product or the development program, provided, however, that prior to
sharing such data, KNC may redact the proprietary manufacturing information
related to its respective proprietary materials and processes. To the
extent that such redacted information is required by such authority, KNC
may submit the information directly to said authority. In such cases KNC
will provide BMPI with a Letter of Reference for the filed information.
Each party agrees to provide the other with copies of all abstracts,
presentations, journal manuscripts and related materials relating to the
development program intended for publication ("Submission") at least thirty
(30) days prior to the proposed date for presenting the Submission to a
third party, for review and comment. Each party agrees to delete specific
portions of Submissions that consist of Confidential Information of the
other party or are otherwise necessary to protect the patentability of such
disclosure. Upon review of the Submission, the receiving party will have
the option to extend the timing of the Submission for up to an additional
sixty (60) days to allow for filing of patents or other documents necessary
to protect intellectual property that would be disclosed as a result of the
Submission.
3.7 Regulatory Approval of the Commercial Products. BMPI shall have primary
responsibility for obtaining all necessary U.S. and foreign Approvals for
the Commercial Products for use, sale, marketing and distribution,
including the performance of animal trials. If human clinical trials are
necessary to obtain Approval, BMPI shall manage the study and KNC shall
provide the Product at its expense. Without limiting the generality of the
foregoing, BMPI shall make all necessary submissions in the U.S. with the
United States Federal Food and Drug Administration, any successor agency
thereto ("FDA") and all other Regulatory Authorities under the BMPI name.
BMPI shall provide to KNC copies of any written communications to or from
the FDA or other Regulatory Authority specific to KNC's Device Master File
or other document filed with such Regulatory Authority by KNC, promptly
after any such communications are sent or received, and redacted of any
proprietary information. In the event FDA or other Regulatory Authority
requests additional information from BMPI specific to a KNC filing for a
Commercial Product or Product, BMPI shall advise KNC of the estimated date
by which it will respond to such request, and the date that the response is
submitted. KNC will cooperate with BMPI to the extent KNC's participation
is reasonably necessary or appropriate in order for BMPI to procure such
Approval. Without limiting the generality of the foregoing, KNC will make
available to BMPI, without charge, tangible written information in KNC's
possession and control that is required to prepare a submission for
Approval, as BMPI may reasonably request, and as is reasonably necessary to
obtain Approval. All information provided by KNC hereunder shall be
presented in a form which satisfies the requirements of applicable FDA and
other Regulatory Authority guidelines and/or regulations for such types of
submissions seeking Approval. Notwithstanding the foregoing, in the case of
sensitive
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confidential or proprietary manufacturing or other information in a Device
Master File or comparable document, KNC may instead agree to provide such
information directly to the FDA or other applicable regulatory body, as the
case may be, or to an independent third party agent of its choosing which
is reasonably acceptable to BMPI, and shall respond directly (or through
its independent agent) to any questions or inquiries from such agency or
body regarding the information. KNC shall provide to BMPI copies of any
written communications to or from the FDA or other Regulatory Authority,
and notify BMPI of any oral communications with the FDA or other Regulatory
Authority, relating to a Device Master File or other document filed with
such Regulatory Authority, promptly after any such communications are sent
or received, and redacted of any proprietary information. In the event FDA
or other Regulatory Authority requests additional information from KNC, KNC
shall advise BMPI of the estimated date by which it will respond to such
request, and the date that the response is submitted. In addition, KNC
shall have no duty to disclose any of its proprietary information to any
Regulatory Authority or any other party, unless the Regulatory Authority in
question provides for the protection of such proprietary information from
disclosure in a manner substantially similar to that provided by the FDA.
3.8 Additional Products. From time to time, the parties may agree to jointly
develop additional Product configurations to be used in future Commercial
Products. In such event, the parties shall update the Development Plan or
execute an addendum to this Agreement. Such update or addendum shall
describe the additional Commercial Product configurations and the
modifications to the Development Plan required to support the development
of such additional Product and Commercial Product configurations.
4. COMMERCIALIZATION AND SUPPLY
4.1 BMPI shall have the exclusive right to distribute and sell the Commercial
Products in the Territory during the Term of this Agreement and any Post
Term Supply period as described in Section 2.1. Except as provided in
Section 14.4, KNC shall be the exclusive manufacturer and supplier of the
Products in the Territory during the Term of this Agreement.
4.2 The parties acknowledge that KNC maintains a biomaterials business and
supplies products to companies that manufacture and/or develop products
that may compete with the Commercial Products. The parties acknowledge that
BMPI maintains a broad regenerative medicine business and performs work
with suppliers of other biomaterials based products that may compete with
the Products or Commercial Products. Subject to the limitations on use of
the joint Intellectual Property set forth in Article 8 and exclusive rights
set forth in Section 4.1 herein, nothing in this Agreement shall preclude
KNC or BMPI from continuing to conduct such business during the Term of
this Agreement, or thereafter.
4.3 BMPI may use Distributors in the commercialization of the Commercial
Products, provided that BMPI shall be responsible for monitoring such
Distributors, so that the terms of this Agreement are met.
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4.4 KNC agrees to:
a. use best efforts to ensure that the Product will be manufactured,
packaged, labeled, and stored in accordance with the QSR.
b. use commercially reasonable best efforts to supply BMPI with
BMPIs projected Rolling Forecast requirements (pursuant to
Subsection 4.5(e)) of Product;
c. use commercially reasonable best efforts to deliver Product
hereunder on the scheduled delivery dates as set forth in the
relevant Purchase Orders described in Section 5.3; provided,
however, it will not be considered a breach of this Agreement if
at least 85% of a delivery which conforms to Product
Specifications is made within sixty (60) days following the date
originally agreed upon for delivery. Any shortage greater than
ten percent (10%) made against an accepted Purchase Order will be
delivered as soon as is practicable.
d. supply BMPI with Product manufactured in material compliance with
QSR's;
e. obtain written approval from BMPI prior to implementing any
changes to the Product manufacturing process, raw materials,
testing, systems, equipment, procedures, software, or facilities
if Section 4.4(j) herein is invoked, otherwise written approval
shall be requested for changes which, in KNC's reasonable
judgment may impact safety, quality, or effectiveness of
Commercial Product, which approval shall not be unreasonably
withheld, conditioned or delayed; if an MDR reportable event, as
described in CFR Part 803, to a patient treated with the
Commercial Product is found to be the result of a change in the
processes used by KNC for the manufacture of the Product, or
Commercial Product produced by KNC, and the change was not
pre-approved by BMPI prior to implementation, then the
indemnification provided by BMPI as described in Section 15.2
(ii) to KNC shall not apply to such event;
f. obtain written approval from BMPI prior to implementing changes
to Product Drawings or Product Specifications;
g. investigate diligently, at BMPIs request, complaints or adverse
events which relate to manufacture, sterilization, or packaging
issues, and report back to BMPI within seventy-two (72) hours of
being notified by BMPI of a MDR reportable events, or within ten
(10) days of being notified of any other complaint;
h. provide to BMPI any complaints KNC receives relating to the
Product or Commercial Product, including notice of any adverse
events within three business days of their receipt;
i. KNC will **, except as noted in Section 4.5(j); and
j. to follow cGMP regulations as described in 21 CFR Part 211 as it
relates to the manufacture and supply of the Products, provided
that, and for any Product component where the FDA specifically
directs that such regulations must be implemented by KNC with
respect to the Product component of the Commercial Products, or
in the event that
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** REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
KNC agrees to take on any handling of the PDGF such that these
regulations are required to be implemented by the FDA.
4.5 BMPI agrees to:
a. timely provide KNC, at no charge, with sufficient amounts of
BMPI's TCP, and any required Proprietary Molecule(s), in order to
enable KNC to satisfy its manufacturing and delivery obligations
with respect to the Products;
b. commercialize the Commercial Product in the United States within
twelve (12) months from the time of receipt of Approval in the
United States;
c. market and sell the Commercial Product in the Field only for the
indication approved on the Commercial Product labeling;
d. be solely responsible for the cost and implementation of all
marketing, sales, promotional and related activities concerning
the marketing, sale and promotion of the Commercial Products in
the Territory;
e. provide KNC with rolling twelve (12) month forecasts of BMPI's
requirements of Product ("Rolling Forecast"), inclusive of
quantities of samples and demo materials to be purchased by BMPI.
Such forecasts shall be prepared in good faith and provided on a
monthly basis. The first three months of any twelve month Rolling
Forecast shall be accompanied by firm Purchase Orders to purchase
Product and shall be considered a purchase commitment ("Purchase
Commitment") and each subsequent Rolling Forecast's Purchase
Commitment shall not exceed the prior Purchase Commitment by more
than twenty five (25) percent. The final 9 months of any Rolling
Forecast (which do not constitute a "Purchase Commitment") may
not increase by more than twenty-five percent (25%) cumulatively.
An example of the maximum increase in forecast is attached as
Schedule E, for purposes of illustration only. BMPI may at any
time cancel all or any portion of any Purchase Commitment,
provided that BMPI reimburses KNC for inventory costs as required
under Section 4.5(f), which shall be KNC's sole remedy for BMPI's
cancellation.
f. reimburse KNC for any and all unrecovered inventory costs of raw
materials, components, and finished Product, should any such
inventory become obsolete or unusable in the manufacture of
Product (a) within a four month period subsequent to a Purchase
Order reduced by fifty (50%) percent or more or a cancelled
Purchase Order by BMPI, (b) in the event quantities of Product
under Purchase Orders provided by BMPI are less than fifty
percent (50%) of any Rolling Forecast for any three month period,
or (c) if such inventory becomes obsolete due to changes in
processing and/or Product Specifications caused solely by BMPI;
provided however that (i) should such changes in processing
and/or Product Specifications be the result of changes initiated
or necessitated by KNC, KNC shall not be reimbursed by BMPI, (ii)
KNC will attempt to minimize any losses associated with such
obsolete or unusable inventory, and (iii) KNC will reduce the
Transfer Price of any Product provided to BMPI that contains
inventory for which KNC has been reimbursed per
11
this Section 4.5(f), (iv) KNC raw material inventory and
purchases of same and its production scheduling shall be
consistent with the requirements of such Rolling Forecast;
g. be solely responsible for the cost of any Commercial Product and
Product redesign, which varies from the Product Specification
established prior to the First Commercial Sale. If a Product
redesign following the First Commercial Sale results in material
and labor costs either higher or lower from what is anticipated
in the Product Specification as established prior thereto,
Transfer Prices of the redesigned Product shall be adjusted
accordingly, provided, however, if any such redesign resulting in
higher costs is necessitated solely by KNC, all associated costs
will be born by KNC;
h. investigate diligently all adverse events of which BMPI has
knowledge or awareness, related to any application which
incorporates Commercial Product, and promptly report such
occurrences to KNC. BMPI shall be responsible for the cost and
execution of all medical device reporting ("MDR") in accordance
with 21 CFR Part 803 and all vigilance reporting required in the
markets where Commercial Products are sold;
i. provide to KNC any complaints BMPI receives relating to the
Commercial Product, including notice of any adverse events,
within three business days of their receipt;
j. fund sterilization validations where: (1) Product manufactured
and sterilized by KNC contains PDGF as a component of the final
manufacturing process; or (2) the sterilization validation
requirements include the sterilization by KNC of the PDGF or
packaging materials directly in contact with the PDGF. Such
funding shall include the cost of follow-up audits and shipping
studies required by a Regulatory Authority of any final Product
configuration., In addition, such funding shall be subject to
separate negotiation between the parties, regarding the price,
responsibility, and extent thereof;
k. except as otherwise set forth herein, be solely responsible for
all necessary Approvals to market the Commercial Products
including any re-approvals required due to, among other things,
drawing and specification changes; and
1. include reference to KNC's role as the manufacturer and developer
on all packaging of Products and Commercial Products and any
marketing materials related thereto, in form and substance
reasonably acceptable to KNC and consistent with applicable
regulatory requirements.
12
5. ORDERING, PRICE AND PAYMENTS
5.1 Initial Transfer Price. BMPI shall pay the Transfer Price listed in
Schedule D for each Product, for the Commercial Products developed under
the Development Plan. Notwithstanding the foregoing, Product forecasted in
advance and specified for use as **. No royalty payments as described in
Section 6.2 will be due on materials provided for use as demonstration,
training, or non-saleable samples.
5.2 Transfer Price Adjustment. Except as provided in 4.5(g), the Transfer
Prices may be adjusted from time to time throughout the Term of the
Agreement for factors such as, but not limited to, changes in raw material
costs, labor costs, regulatory costs, or product liability costs., However,
such adjustment shall not exceed, unless otherwise agreed, the consumer
price index for the Philadelphia metropolitan area, as published by the
U.S. Department of Labor, Bureau of Labor Statistics. If price adjustments
are related to changes in the Product Specifications requested by BMPI, KNC
will propose new pricing which will be negotiated in good faith and will be
effective immediately upon shipment of Products meeting the new Product
Specifications. Such pricing adjustments will occur no more than annually
by so notifying BMPI in writing. KNC shall include in its notification a
detailed justification for all adjustments. Such adjusted Transfer Price
shall be reflected in any KNC invoices issued for Product shipped after the
date of adjustment.
5.3 Purchase Orders. BMPI shall provide KNC with firm written purchase orders
("Purchase Orders") for Product in accordance with the lead-times set forth
in Product Specifications and consistent with Purchase Commitments;
provided, that BMPI shall have the right, with reasonable lead-times prior
to the date of manufacture, and with the consent of KNC which shall not be
unreasonably withheld, to issue binding, written change orders to increase
or decrease the quantity of such Purchase Orders provided that any such
changes comport with Section 4.5(e), herein. BMPI agrees to accept partial
shipments of Product should it, for any commercially reasonable reason,
become necessary to ship in advance of order completion. KNC shall use its
commercially reasonable efforts to comply with any reasonable revisions to
Purchase Order requirements that exceed the permitted revisions allowed
under Section 4.5(e).
5.4 Acknowledgment. Within five (5) business days after receipt of a written
Purchase Order from BMPI, KNC shall acknowledge such receipt in writing and
confirm whether the order can be supplied, delivery dates, and
destinations.
5.5 Review of Rolling Forecast. Within fifteen (15) business days after receipt
of a Rolling Forecast, KNC shall notify BMPI of any prospective problems
that KNC is aware of which are likely to prevent KNC from meeting BMPI's
forecasted requirements.
5.6 Shipping. KNC shall ship Product to the location(s) designated by BMPI
F.O.B. Exton, Pennsylvania, in accordance with the shipment packaging
materials and shipping method specified by BMPI. BMPI shall pay the actual
documented cost of shipping Product to BMPI facilities. BMPI shall be
responsible for all insurance, custom's charges and taxes related to
shipping and the distribution of the Product. Title to and risk of loss for
all Product sold hereunder shall pass from
13
** REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
KNC to BMPI at the time of loading for shipment at KNC's facility. BMPI
shall determine shipping method and shall bear full responsibility for its
shipping method choice for Product.
5.7 Invoices. KNC shall invoice (net 30 day terms) BMPI for the aggregate
Product and any Commercial Product, which it manufactures, upon shipment to
BMPI, and BMPI shall pay each invoice within such thirty (30) day period.
KNC may impose a late payment service charge of 1.5% per month on invoices
not paid when due. All payments shall be in United States currency.
6. ADDITIONAL PAYMENTS AND REPORTING
6.1 Milestone Payments. BMPI agrees to make the following Milestone Payments to
KNC:
a. ** upon the Effective Date;
b. ** no later than thirty (30) days following the conclusion of the
Feasibility Period unless this Agreement is terminated pursuant
to Section 2.2 or 14.2(ii);
c. ** upon the first enrollment of a patient in a pivotal (Phase
III) clinical trial for US Approval for a Commercial Product;
d. ** upon the filing of the first PMA for US Approval of the first
Commercial Product;
e. ** upon receipt of Approval for marketing of the first Commercial
Product in the United States from the FDA (generally "Approved
Commercial Product") for open and/or closed fractures via an open
approach;
f. ** upon receipt of Approval for marketing of the first Approved
Commercial Product for percutaneous applications of such Approved
Commercial Product for closed fractures;
g. ** upon the First Commercial Sale of the first Approved
Commercial Product as noted in 6.1(e), above;
h. ** upon the one-year anniversary of the First Commercial Sale of
the first Approved Commercial Product for use in procedures as
noted in 6.1 (e), above;
i. ** upon the First Commercial Sale of the first Approved
Commercial Product as noted in 6.1(f), above;
j. ** upon the one-year anniversary of the First Commercial Sale of
the first Approved Commercial Product, as noted in 6.1(f), above;
k. ** upon the First Commercial Sale of the first Approved
Commercial Product for tendon or ligament injury treatment;
14
** REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
l. ** upon the one-year anniversary of the First Commercial Sale of
the first Approved Commercial Product for tendon or ligament
injury treatment.
If BMPI (i) fails to make any Milestone Payment within forty-five (45) days
of the occurrence of the specified event, and (ii) does not cure such
failure to pay within thirty (30) days of receiving notice of such failure
from KNC, KNC will have the option but not the obligation to terminate this
Agreement. Upon such termination, KNC shall be relieved of all obligations
to BMPI under this Agreement.
6.2 Royalties. BMPI shall pay KNC a quarterly royalty of ** of the Net Sales of
the Commercial Products (the "Royalty"), with such Royalty being
consideration for the incorporation of KNC's Intellectual Property,
including patents, and Know How. Such Royalty shall only be due on the
Commercial Product, whether sold in combination or packaged separately. No
Royalty shall be due on additional components that may be combined with the
Commercial Product to form a bundled product.
6.3 Reports and Accounting. BMPI will report preliminary sales quantities and
dollars with respect to its sales of the Commercial Products on a monthly
basis, within ten (10) business days of the end of each calendar month. In
addition, BMPI shall deliver to KNC, within forty-five (45) days after the
end of each calendar quarter, reasonably detailed written accountings of
Net Sales of Commercial Product for such calendar quarter and units sold
during such quarter. Such quarterly reports shall indicate, on a country by
country basis, (i) Gross Sales, (ii) Net Sales and (iii) Net Sales Price
for the Commercial Products. When BMPI delivers such accounting to KNC, it
shall also deliver any payments coming due under this Article 6 during such
calendar quarter.
6.4 Review of Records. BMPI shall keep complete and accurate records of the
latest three (3) years relating to Net Sales. For the sole purpose of
verifying payments hereunder, KNC shall have the right annually, at KNC's
expense, to review such records in the location(s) where such records are
maintained by BMPI upon reasonable notice and during regular business hours
and under obligations of confidence as provided in Article 9. If a review
reflects an underpayment, such underpayment shall be promptly remitted by
BMPI to the KNC. If the underpayment is equal to or greater than five
percent (5%) of the amount that was otherwise due, BMPI agrees that it
shall pay all of the costs of such review.
6.5 Currency and Method of Payments; Late Payments. All payments under this
Agreement shall be made in United States dollars by transfer to such bank
account as KNC may designate from time to time. Any payments due hereunder
with respect to sales outside of the United States shall be payable in U.S.
Dollars; provided, however, that if any payment applied to BMPI's Net
Sales is received by BMPI in a foreign currency, such amount shall be
converted monthly to United States funds at the rate published by Reuters
on the last Wednesday of the month in which such Net Sales occurred (or
such other publicly available source as BMPI may subsequently utilize
generally in its currency accounting procedures, in which case BMPI shall
provide notice to KNC promptly of any such change).
15
** REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
6.6 Tax Withholding. BMPI shall use all reasonable and legal efforts to reduce
required tax withholding on payments made to KNC hereunder. Notwithstanding
such efforts, if BMPI reasonably concludes that tax withholdings under the
laws of any country are required with respect to payments to KNC, it shall
withhold the required amount and pay it to the appropriate Governmental
Authority, and shall promptly provide KNC with original receipts or other
evidence reasonably required and sufficient to allow KNC to document such
tax withholdings adequately for purposes of claiming foreign tax credits
and similar benefits.
7. QUALITY CONTROL AND REGULATORY COMPLIANCE
7.1 Each delivery of Product or Commercial Product manufactured by KNC shall be
accompanied by KNC's Certificate of Conformance and Certificate of
Analysis, the generic form of which is attached as Schedule F.
7.2 Except as provided herein, BMPI shall accept all Product, and Commercial
Product manufactured by KNC, delivered in accordance with the terms and
conditions of this Agreement. BMPI may reject:
(i) all or any portion of any shipment of product if such shipment
does not conform in any material respect with the Product
Specifications, or
(ii) a shipment that is less than eighty five percent (85%) of the
quantities requested in the Purchase Order (except as specified in
4.4(c)), or
(iii) any portion of the shipment in excess of the quantities
requested in the Purchase Order if such shipment exceeds such ordered
quantities by more than fifteen percent (15%).
In order to reject a shipment or portion thereof, BMPI must within thirty
(30) days of receipt of shipment provide KNC with a statement of rejection
which:
(i) gives KNC a reasonably detailed statement of BMPI's reasons for
rejection, and
(ii) provides KNC with product samples demonstrating the purported
nonconformance, and
(iii) requests that KNC either remedy or provide a reasonable plan to
promptly remedy such nonconformance.
If no such statement is received by KNC then BMPI shall be deemed to have
accepted the shipment of product. In the event of timely rejection by BMPI,
KNC shall, within five (5) business days after receipt thereof, notify BMPI
whether it accepts BMPI's notice of nonconformity or it shall be deemed to
accept such notice. However, if KNC disagrees with any purported
nonconformity by BMPI, then both parties agree to cooperate in good faith
and make every reasonable effort to resolve the disagreement. If KNC
confirms BMPI's rejection, KNC shall, at its sole expense and option, and
in a reasonably prompt manner, either replace the nonconforming Product or
Commercial Product with conforming Product or Commercial Product, or refund
to BMPI the purchase price
16
thereof or credit such amounts if not already paid. No product shall be
returned to KNC without KNC's written prior permission, and then only in a
manner and to the destination prescribed by KNC. In no event shall KNC be
liable to BMPI for special, indirect, or consequential damages. KNC shall
provide written instructions for disposition of rejected product and cover
all associated disposal or return shipping costs within thirty (30) days.
7.3 If the parties hereto fail to agree as to whether a delivered quantity of
Product meets its agreed Product Specifications, then the parties shall
cooperate to have the Product in dispute analyzed by a qualified
independent testing laboratory jointly selected by KNC and BMPI. The
following provisions shall apply with respect to the results indicated by
such independent laboratory:
a. If the Product is determined to have met its Product
Specifications, then BMPI shall bear the costs of the independent
laboratory testing and shall accept the shipment of such Product
and promptly pay for such Product if not yet paid; or
b. If the Product is determined not to meet its Product
Specifications, then KNC promptly shall bear the cost to replace
the affected quantity, or refund amounts paid or credit such
amounts if not yet paid, as outlined in Section 7.2(a) and KNC
shall bear the costs of the independent laboratory testing.
7.4 In the event of an audit by a Regulatory Authority at BMPI which involves
any Commercial Product, BMPI shall notify KNC of such audit promptly after
receiving notice thereof, but no less than within one week thereof.
Pursuant to such notice of audit, KNC shall supply BMPI with quality
control documents related to the Product portion of the Commercial Product,
within three business days from a request by BMPI (or alternatively, KNC
shall agree to provide any proprietary information directly to such agency
or body within three business days, and shall respond to any inquiries
regarding such information with such Regulatory Authority).
7.5 KNC shall promptly notify BMPI whenever a request for a plant inspection is
received from the FDA or other Regulatory Authority that relates in any way
to Product or Commercial Product, and shall promptly advise BMPI of any
scheduled or unscheduled Product or Commercial Product related FDA or other
Regulatory Authority inspection and the results thereof. A copy of Form 483
observations or other applicable reports, which apply to Product or
Commercial Product and are redacted as deemed necessary by KNC to protect
proprietary information, shall be supplied to BMPI upon its request, within
three business days of the request. KNC, at KNC's sole expense, shall
promptly take steps to remedy any valid deficiencies found by the FDA or
other Regulatory Authority inspectors relating to the manufacture,
sterilization and packaging of Product or Commercial Product, and to
respond in writing to the Form 483 observations. KNC shall provide BMPI
with a copy of its responses to any Form 483 observations relating to the
Products or Commercial Products in advance of their submission to FDA,
redacted of any proprietary information, and shall notify BMPI of the date
such responses are filed with the FDA.
7.6 In the event that either KNC or BMPI determines that a recall of any one or
more Commercial Product is necessary for any reason, KNC or BMPI, as
applicable, shall so notify the other party in writing. BMPI shall not
conduct a voluntary recall of Commercial Product without prior full
consultation with KNC regarding the ramifications, costs and regulatory
strategies associated with
17
such a recall; provided however that BMPI shall have full discretion,
authority and responsibility to conduct a recall.
7.7 BMPI and KNC shall assist and cooperate with each other in giving effect to
any "Recall," as that term is defined in 21 CFR 810.2. KNC shall be
responsible for the cost of Commercial Product and Product replacements of
any Recall caused by KNC's shipment of Products or Commercial Products that
did not meet Product Specifications and the costs associated with return
and reshipment including, without limitation, any costs associated with the
shipment and reshipment and replacement of such Commercial Products and
Products. KNC shall have no other obligations with respect to such Recalls,
except as may be provided for in Section 15.1. BMPI shall, however, bear
all costs and expenses of any recall caused by Commercial Product design,
selection of materials, misrepresentations (including deceptive or
misleading advertising or sales practices) or other acts causing a Recall
to occur, including, without limitation, costs of notifying customers and
costs associated with the shipment and reshipment and replacement of such
Commercial Products.
7.8 KNC shall provide BMPI (or a third party designated by BMPI) access to its
sites and quality system records for the purpose of auditing and reviewing
the sites for compliance with the requirements (the "Review") of Section
4.4(d). Any information obtained by BMPI as a result of such Review shall
be subject to the provisions of Article 9 hereof. Such Review shall be made
during regular business hours, with at least thirty (30) days notice, and
such Review may be conducted no more frequently than once per calendar
year, and one time during the twelve (12) months following any Termination
or expiration hereof. KNC shall respond to any findings under such Review
in writing within thirty (30) days, unless otherwise agreed; additionally,
BMPI shall have the right to re-Review any specific records to establish
that any findings have been corrected. To the extent that KNC reasonably
believes that providing BMPI with access to such sites would compromise
KNC's obligations of confidentiality to third parties or require the
disclosure of trade secrets, KNC shall grant such access to an independent
third party designated by BMPI in its reasonable discretion, and reasonably
acceptable to KNC, to conduct such audit. Any report furnished by such
third party to BMPI shall be subject to the provisions of Article 9 herein
and KNC shall have the right to review any such report and redact any
information it deems a trade secret or the disclosure of which would
violate such confidentiality obligations, prior to the release of said
report to BMPI.
7.9 KNC shall cooperate with BMPI to provide any authorizations, documents,
information, testing protocols and procedures in KNC's possession subject
to Sections 3.6, 3.7 and 7.8, or take such other actions, which BMPI may
reasonably request in order to obtain or maintain any registration,
approval, clearance, certification or other authorization with or from any
federal, state, local or foreign government agency or any self-regulatory
body (or alternatively, KNC shall agree to provide any proprietary
information directly to such agency or body in the form of a Device Master
File or comparable document, and shall respond directly to any inquiries
regarding such information with such agency or body in accordance with
Section 3.6). BMPI agrees to fund information development and preparation,
should such information not be in KNC's possession or readily available.
7.10 Each party shall keep and maintain complete and accurate records necessary
for regulatory compliance for a period of at least five (5) years after the
expected life of the Commercial Product
18
or Product or ten (10) years from the date of creation (whichever is less),
including all records that ensure the ability to perform complete lot
tracing of Commercial Products.
8. INTELLECTUAL PROPERTY RIGHTS
8.1 KNC and BMPI acknowledge the exclusive right, title, interest and goodwill
in and to each trademark, trade name or other Intellectual Property right
owned by the other party. Neither KNC nor BMPI will, at any time or in any
way, do or cause to be done any act, or omission, or thing to challenge,
contest or in any way impair the right, title, and interest of the other
party. Except as otherwise provided in this Agreement, KNC and BMPI shall
not in any manner represent that either has any rights in or to any
trademark, trade name or other Intellectual Property right of the other
party and each acknowledges that the permitted use of any trademark, trade
name or other Intellectual Property right of the other shall not create any
ownership right, title, or interest in or to any trademark, trade name or
other Intellectual Property right of the other party.
8.2 It is anticipated that during the Term of the Agreement, one or more
inventions will be made by one or both of the parties hereto within the
Field of the Agreement and in furtherance of performance under this
Agreement. Inventorship of all such inventions shall be determined in
accordance with the patent laws of the United States without regard to the
jurisdiction where such inventions or rights thereto exists, were
conceived, discovered, created, made, developed, reduced to practice or
otherwise perfected. Inventions made solely by persons employed or owing a
duty to assign to BMPI shall be owned solely by BMPI. Inventions made
solely by persons employed or owing a duty to assign to KNC shall be owned
solely by KNC. Inventions made jointly by one or more persons from each of
BMPI and KNC, that is, at least one inventor from each party as defined by
USPTO procedures, shall be considered to be joint inventions and are to be
subject to the following Sections 8.3, 8.4 and 8.5.
8.3 Once a joint invention has been identified, the parties shall meet and
confer with a view toward determining the best way to protect and exploit
such invention. The parties shall at all times proceed in good faith in
this undertaking and shall determine which of the two parties is in the
best position to effect application and prosecution of patents arising from
such inventions. The party decided upon as being most appropriate to
control submission and prosecution of patents for an invention shall have
the obligation to secure appropriate U.S. and international patent
protection. Apportionment of costs attendant to such protection shall also
be decided. In determining the appropriate party to control patent
submission and prosecution related to a joint invention, the parties shall
be mindful of the commercial capabilities of the parties to bring the
invention to the marketplace. The likelihood that FDA or other regulatory
approval may be needed in order to secure commercialization shall also be a
factor considered in this evaluation. In general, though not in absolute,
improvements to each party's existing Intellectual Property in the form of
continuations or continuations-in-part to filed, patent applications or
issued patents shall be owned and assigned to such existing Intellectual
Property's owner. Each party will, if reasonably requested, sign all
documents and do all acts and deeds necessary or desirable to perfect the
rights of joint inventions.
8.4 Notwithstanding any other clause of this Agreement, any Intellectual
Property arising out of this Agreement, where jointly developed by BMPI and
KNC, regardless of whether letters patent are applied for or received by
one party or the other (the "Joint IP"), shall be deemed to be jointly
19
owned and available for use to both BMPI and KNC; however, such use shall
be royalty-free and (i) co-exclusive (usable only with each other) in the
Field and (ii) non-exclusive outside the Field, subject to a proprietary
rights limitation (the "Right(s) Limitation"), wherein either party shall
grant an exclusive limited license for use outside the Field in any Joint
IP to the other party, subject to the following Rights Limitation: BMPI
shall have the exclusive royalty-free right to use the Joint IP to the
extent that the Joint IP covers, protects, or claims, the use of the then
existing Proprietary Molecule, and wherein KNC shall have the exclusive
royalty-free right to use the Joint IP to the extent that the Joint IP
covers, protects, or claims, the use of the Material.
8.5 In the event that the parties are unable to agree upon how control and
exploitation of a joint invention shall be accomplished, the parties agree
to submit the matter to non-binding mediation. Such mediation, if required,
shall be undertaken by a single individual, jointly agreed upon by KNC and
BMPI, who is registered to practice before the U.S. Patent and Trademark
Office, who is skilled in the chemical, biological and medical arts, and
who is familiar with whatever regulatory considerations attend the field
most closely related to the invention in question. The fees for such
mediator shall be shared equally by the parties. No written record of the
mediation shall be kept save as the same is reflected in the ensuing
control and exploitation agreement.
8.6 BMPI and KNC will each be individually responsible for prosecuting and
defending against patent infringement lawsuits with regard to their
respective patent positions. The costs of defense of any patent resulting
from a joint invention shall be borne equally by both parties if both
parties shared in the prosecution expenses for same, and the rewards shall
be shared equally. Any party not contributing to such costs for defense of
a joint invention shall forfeit its right to any reward.
9. CONFIDENTIAL INFORMATION
9.1 The parties agree:
a. To receive and hold all Confidential Information in strict
confidence and to disclose such Confidential Information only to
its employees and representatives who have a need to know the
Confidential Information. Without affecting the generality of the
foregoing, the Receiving Party will exercise no less care to
safeguard the Confidential Information than it exercises in
safeguarding its own Confidential Information and will be
responsible for any breach of the provisions of Article 9 by its
employees and representatives (including its employees who,
subsequent to the first disclosure of Confidential Information,
become former employees);
b. That the Receiving Party shall not, directly or indirectly,
disclose or use the Confidential Information, in whole or in
part, for any purposes other than those contemplated herein.
Without affecting the generality of the foregoing, the Receiving
Party shall not, directly or indirectly, disclose any such
Confidential Information to any third party or use the
Confidential Information for the benefit of any third party;
c. That neither party shall, without the prior written consent of
the other party, disclose to any third party Confidential
Information and or any of the terms, conditions or other facts
with respect to the business relationship of the parties. Any
approved disclosure made shall be
20
no more extensive than is necessary to meet the minimum
requirement imposed on the party making such disclosure;
d. That money damages may not be a sufficient remedy for a breach of
this Article 9 and that the non-breaching party may be entitled
to equitable relief (including, but not limited to, a temporary
restraining order or an injunction or specific performance),
without posting bond or establishing monetary damages, in the
event of any breach of the provisions of this Article 9;
e. The furnishing of Confidential Information hereunder shall not
constitute or be construed as a grant of any express or implied
license or other right, or a covenant not to xxx or forbearance
from any other right of action by the Disclosing Party to the
Receiving Party under any of the Disclosing Party's patents or
other Intellectual Property rights;
f. Upon the Disclosing Party's request at any time, or upon
termination or expiration of this Agreement, the Receiving Party
shall immediately return or destroy all written, graphic and
other tangible forms of the Confidential Information (and all
copies thereof) in the Receiving Party's possession or control
except for one copy which may be retained by the party's legal
counsel for legal archival purposes only; and
g. The obligations of the Receiving Party regarding disclosure and
use of Confidential Information shall survive the termination of
this Agreement and shall continue for five (5) years after the
date of termination of this Agreement.
10. PUBLICITY
10.1 During the Term and thereafter, except as required by applicable law,
neither party shall, without securing the prior written consent of the
other party, release the terms of this Agreement to any third party or
publicly announce the terms of this Agreement. During the Term and
thereafter, either party may disclose the existence and general nature of
this Agreement in press releases, shareholder reports, quarterly and annual
corporate reports, Securities and Exchange Commission filings and public or
private equity offerings. In addition, either party may provide a copy of
this Agreement as part of a due diligence review in connection with a
merger, an acquisition, or a public or private equity offering, so long as
such review is under the auspices of an appropriate confidentiality
agreement. Any announcements, press releases or similar publicity with
respect to the execution of this Agreement or the transfer of monies
including royalty and milestone payments shall be agreed upon among the
parties in advance of such announcement, and shall not include information
that either party reasonably deems inappropriate for disclosure.
11. WARRANTIES AND REPRESENTATIONS
11.1 Subject to the provisions set forth in this Section 11.1 and Section 11.7,
KNC warrants: (i) that all Product delivered hereunder shall conform in all
material respects to Product Specifications at the time of shipment; (ii)
that all Product, or Commercial Product manufactured by KNC, shall be
manufactured substantially in accordance with (a) QSR, (b) the pertinent
rules and regulations of the FDA and (c) the EU Medical Device Directive;
and (iii) that no Product, or Commercial Product
21
manufactured by KNC, delivered hereunder shall at time of shipment be
adulterated or misbranded within the meaning of the Act, or within the
meaning of any applicable state or municipal law in which the definitions
of adulteration and misbranding are substantially the same as those
contained in the Act, provided such laws are constituted and effective at
the time of such delivery (collectively, the "Product Warranties"). These
Product Warranties shall be null and void and shall not apply to any
Product, or Commercial Product manufactured by KNC, which is in any way
altered, modified, damaged or replaced by any person other than KNC or
which is abused or misused, whether intentionally or accidentally.
11.2 BMPI and KNC each represent and warrant that, with respect to their
respective Intellectual Property contributed to the development and
manufacture of Commercial Products hereunder, the development, manufacture,
use or sales of any Commercial Product manufactured according to Product
Specifications will not knowingly constitute or create an infringement of
any United States or non-United States patent, copyright, trademark or
other proprietary right or trade secret, be it registered or otherwise,
arising under federal, state or other law and/or regulation.
11.3 BMPI represents and warrants that it is and will remain in material
compliance with all applicable laws and Regulatory Authorities and
governmental Approvals affecting the use, possession, distribution,
labeling, advertising and all forms of promotion in connection with the
sale and distribution of Commercial Product, and that it and its
representatives will use their best efforts to not use or make any
deceptive, misleading, manipulative or intentionally or recklessly
inaccurate marketing or advertising materials, packaging, presentations or
statements.
11.4 Each party represents and warrants that it is and will remain in material
compliance with all applicable federal, state and local laws, regulations
and orders as they may apply to this Agreement.
11.5 KNC and BMPI each represent and warrant for itself that (i) it is duly
incorporated and validly existing and in good standing under the laws of
the state of its incorporation, (ii) it has the full right, power, and
authority to execute and perform this Agreement, (iii) this Agreement does
not conflict with or otherwise result in a breach of any agreement to which
such party is a party or to which it is bound, and (iv) this Agreement
represents a valid, legally binding obligation of it, enforceable against
it in accordance with its terms.
11.6 EXCEPT FOR THE WARRANTIES EXPRESSLY MADE IN THIS ARTICLE 11, NEITHER PARTY
MAKES ANY OTHER REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED.
SPECIFICALLY, KNC MAKES NO WARRANTIES, EXPRESS OR IMPLIED, OF
MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE EVEN WHEN THE USE OR
PURPOSE IS KNOWN TO KNC.
11.7 EXCEPT AS OTHERWISE EXPRESSLY PROVIDED ELSEWHERE IN THIS AGREEMENT, NEITHER
PARTY SHALL BE LIABLE TO THE OTHER FOR ANY INCIDENTAL, INDIRECT,
CONSEQUENTIAL OR SPECIAL DAMAGES IN CONNECTION WITH OR ARISING OUT OF THIS
AGREEMENT, INCLUDING WITHOUT LIMITATION, LOSS OF PROFITS OR REVENUES,
WHETHER ARISING IN CONTRACT (INCLUDING WITHOUT LIMITATION BREACH OF
CONTRACT OR BREACH OF WARRANTY), IN TORT (INCLUDING WITHOUT LIMITATION
NEGLIGENCE AND STRICT LIABILITY), OR ANY OTHER
22
THEORY OF RELIEF, EVEN IF INFORMED OF THE POSSIBILITY OF SUCH DAMAGES AND
EVEN IF AS A RESULT ANY REMEDY ARISING HEREUNDER OR UNDER APPLICABLE LAW
FAILS FOR ITS ESSENTIAL PURPOSE.
12. ASSIGNMENT
12.1 Neither party may assign or transfer this Agreement, in whole or in part,
to a third party without the prior written consent of the other party,
which consent shall not be unreasonably withheld, conditioned or delayed.
For purposes of this Agreement, the transfer to a party of all or
substantially all of its assets or the transfer of a majority of its
outstanding voting stock or a merger with or into another entity which
effects a change of control shall be deemed to be permitted assignment of
this Agreement.
12.2 This Agreement will bind and inure to the benefit of the respective
successors and permitted assigns, whether so expressed or not.
13. INSURANCE
13.1 KNC and BMPI shall each obtain and maintain at all times during the Term
following the First Commercial Sale, product liability insurance in the
amount of at least $1 million per occurrence and $10 million umbrella
coverage and shall deliver to the other party a certificate evidencing such
insurance.
14. TERMINATION
14.1 In addition to any other rights of termination granted to KNC in this
Agreement, KNC shall have the right, but not the obligation, to terminate
this Agreement upon sixty (60) days written notice by certified mail to
BMPI under the following circumstances, unless the circumstances are
remedied or cured within said sixty (60) day notice period:
i. if any amounts invoiced to BMPI and due KNC are unpaid;
ii. if BMPI declares bankruptcy, BMPI makes an assignment for the
benefit of its creditors, if any proceedings take place for
reorganization or arrangement for the appointment of a receiver
or trustee to take possession of BMPI's assets, or any other
proceeding under law for the entry of an order for the relief of
creditors shall be instituted which shall not have been vacated,
discharged, stayed, satisfied or bonded pending appeal within
forty-five (45) days from the entry thereof or if BMPI shall
become insolvent; or
iii. if BMPI materially breaches its obligations under this Agreement.
14.2 In addition to any other rights of termination granted to BMPI in this
Agreement, BMPI shall have the right, but not the obligation, to terminate
this Agreement upon sixty (60) days written notice by certified mail to KNC
under the following circumstances, unless the circumstances are remedied or
cured within said sixty (60) day notice period:
23
i. if KNC declares bankruptcy, KNC makes an assignment for the
benefit of its creditors, if any proceedings take place for
reorganization or arrangement for the appointment of a receiver
or trustee to take possession of KNC's assets, or any other
proceeding under law for the entry of an order for the relief of
creditors shall be instituted which shall not have been vacated,
discharged, stayed, satisfied or bonded pending appeal within
forty-five (45) days from the entry thereof or if KNC shall
become insolvent; or
ii. if KNC materially breaches its obligations under this Agreement.
14.3 Upon termination or expiration of this Agreement for any reason, including
the end of the Term as defined in Section 2, nothing herein shall be
construed to release either party from any obligation, which matured prior
to the effective date of termination, or which by their terms are intended
to continue.
14.4 If during the Term, including any Post-Term Supply, KNC intentionally
discontinues supply of Product for any reason other than pursuant to
Section 14.1, KNC shall: (1) supply BMPI with two years of Material at
KNC's then current list price based upon the most recent Purchase
Commitment amount, and (2) ** for the balance of the then existing Term,
but in no case less than three (3) years from the date of discontinuation
of supply.
15. INDEMNIFICATION
15.1 KNC agrees to indemnify, defend and hold BMPI and any of its officers,
directors, affiliates, employees, sales agents, successors and permitted
assigns (each, an "BMPI Indemnified Party") harmless from and against any
and all Claims of third parties for any Losses arising out of or resulting
from: (i) the failure of KNC to ship Product, or Commercial Product
Manufactured by KNC, that meets the Product Specifications or that is not
manufactured in compliance with QSR or other applicable laws and
regulations; (ii) any KNC breach of a representation, warranty, covenant or
obligation in this Agreement; (iii) the infringement or misappropriation of
any patent, trade secret, copyright or other proprietary right for a
Product, or Commercial Product Manufactured by KNC, based on the
Intellectual Property of KNC; or (iv) any gross negligence, recklessness or
wrongful intentional acts or omissions of KNC or its representatives,
directors, officers, employees and agents, in connection with the
activities contemplated under this Agreement, in each case, only to the
extent such Claims listed in Section 15.1 (i - iv) are not (a) due to the
gross negligence, recklessness or wrongful intentional acts or omissions of
a BMPI Indemnified Party, or (b) otherwise subject to indemnification under
Section 15.2.
15.2 BMPI agrees to indemnify, defend and hold KNC and any of its officers,
directors, affiliates, employees, sales agents, successors and permitted
assigns (each, a "KNC Indemnified Party") harmless from and against any and
all Claims of third parties for any Losses arising out of or resulting
from: (i) any actual or alleged defects in the design of any Commercial
Product and/or the BMPI-provided Product Specifications or Product
Drawings; (ii) the use of any Product (in clinical
24
** REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
trials or otherwise) or Commercial Product, whether used singly or in
combination with other products, which resulted in harm, injury or death of
any person, subject to KCN providing Product that met the specifications
established for the Product, (iii) any BMPI breach of a representation,
warranty, covenant or obligation in this Agreement; (iv) the infringement
or misappropriation of any patent trade secret, copyright, or other
proprietary right for a Commercial Product based on the Intellectual
Property of BMPI (v) any gross negligence, recklessness or wrongful
intentional acts or omissions of BMPI or its representatives, directors,
officers, employees and agents, in connection with the activities
contemplated under this Agreement, including without limitation any
deceptive, misleading, manipulative or intentionally or recklessly
inaccurate marketing or advertising practices; or (vi) BMPI's advertising,
promoting, marketing, distributing and selling activities of Commercial
Product that are not in accordance with law or regulation, in each case,
only to the extent such Claims listed in Section 15.2 (i - iv) are not (a)
due to the gross negligence, recklessness or wrongful intentional acts or
omissions of a KNC Indemnified Party, or (b) otherwise subject to
indemnification under Section 15.1.
15.3 To receive the indemnities contained in this Section 15, the party entitled
to indemnification hereunder (the "Indemnified Party") must provide the
party obligated to provide indemnification hereunder (the "Indemnifying
Party") with (i) reasonably prompt notice in writing of any such Claim or
action, (ii) information and reasonable assistance, at the Indemnifying
Party's expense, as necessary or appropriate to defend or settle such Claim
or action, and (iii) full authority to defend or settle the Claim or suit.
The Indemnified Party shall have the right to employ separate counsel and
participate in the defense of any Claim or action, at its own expense.
Except as provided in the last sentence of this Section 15.3, the
Indemnified Party may not settle any Claim or action under this Section 15
on behalf of the Indemnifying Party without first obtaining the
Indemnifying Party's written permission, and so long as the Indemnifying
Party is diligently conducting a defense as provided herein, it shall not
be liable for the attorneys' fees or expenses of the Indemnified Party. If
an Indemnified Party provides notice of a Claim that is subject to
indemnification in accordance herewith and is not notified within ten (10)
days that the Indemnifying Party intends to defend such Claim, the
Indemnified Party shall be entitled to defend, settle and/or compromise
such Claim, subject to the indemnification provided for herein. Nothing in
this provision, however, shall permit either party to enter into a
settlement that imposes an obligation on the other party requiring them to
take any affirmative action or refrain from any act, unless such other
party consents to such settlement.
16. MISCELLANEOUS PROVISIONS
16.1 Independent Contractor. Neither party shall have the right, power or
authority to assume or create any obligations or responsibility expressed
or implied, on behalf of, or in the name of, the other party, or to bind
the other party in any manner or to any extent whatsoever, without the
prior written approval and acceptance of the other party. Each of the
parties hereto is an independent contractor for the purposes of this
Agreement and nothing contained herein shall be deemed or construed to
create the relationship of agency, partnership or joint venture or any
other association except that of an independent contractor relationship.
16.2 Amendment and Waiver. This Agreement may be amended, and any provision of
this Agreement may be waived, provided that any such amendment or waiver
will be binding on each party only if
25
such amendment or waiver is set forth in a writing executed by such
parties. Waiver of a breach of the Agreement shall not constitute a waiver
of any other subsequent breach of the Agreement. The waiver of any
provision of this Agreement shall not constitute a continuing waiver of
that provision or a waiver of any other provision of this Agreement.
16.3 Notices. All notices, demands and other communications to be given or
delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when sent by facsimile
transmission with acknowledged returned receipt, personally delivered or
mailed by overnight mail, return receipt requested. Notices demands and
communications will, unless another address or individual is specified in
writing, be sent to the addresses set forth as follows:
If to BMPI: BioMimetic Pharmaceuticals, Inc.
000 Xxxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Attention: President
With a copy to: BioMimetic Pharmaceuticals, Inc.
000 Xxxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
Attention: General Counsel
If to KNC: Xxxxxx X. Xxxxxxxx
President and CEO
Xxxxxx Xxxx Corporation
00 Xxxx Xxxxxxx Xxxxxx
Xxxxx, XX 00000
With a copy to: Xxxxxxx X. Xxxxx
Director of Legal Affairs
Xxxxxx Xxxx Corporation
00 Xxxx Xxxxxxx Xxxxxx
Xxxxx, XX 00000
16.4 Severability. Whenever possible, each provision of this Agreement will be
interpreted in such a manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
16.5 Complete Agreement. This Agreement and the documents referred to herein
contain the complete agreement between the parties and supersede all prior
understandings, agreements and
26
representations by or between the parties, written or oral, which may have
related to the subject matter hereof in any way.
16.6 Counterparts. This Agreement may be executed in one or more counterparts
all of which taken together will constitute one and the same instrument.
16.7 Governing Law. The law of the State of Delaware will govern, without regard
to the conflicts of law provisions thereof, all questions concerning the
construction, validity and interpretation of this Agreement and the
performance of the obligations imposed by this Agreement.
16.8 Headings. Section headings used in this Agreement are for convenience only
and form no part or in any way modify or define the text of meaning or any
provision of this Agreement.
16.9 Force Majeure. Neither party shall be liable or deemed in default for
failure to perform any duty or obligation that such party may have under
this Agreement where such failure has been directly or indirectly caused by
any act of God, fire, war, or any other cause outside the reasonable
control of that party, and occurring without its fault or negligence,
including without limitation, delivery of nonconforming or defective
material or equipment, interruptions of transportation or happening of
unforeseen acts of misfortune, or casualty by which performance hereunder
is delayed or prevented. The party whose performance has been so
interrupted shall give the other party prompt notice of the interruption
and the cause thereof, and shall use its commercially reasonable efforts to
resume full performance of this Agreement as soon as possible.
16.10 Arbitration.
a. The parties will attempt in good faith to resolve through
negotiation any dispute, claim or controversy arising out of or
relating to this Agreement. Any party may initiate negotiations
by providing written notice in letter form to the other party,
setting forth the subject of the dispute and the relief
requested. The recipient of such notice will respond in writing
within five (5) business days with a statement of its position on
and recommended solution to the dispute. If the dispute is not
resolved by this exchange of correspondence, then representatives
of each party with full settlement authority will meet at a
mutually agreeable time and place within ten (10) business days
of the date of the initial notice in order to exchange relevant
information and perspectives, and to attempt to resolve the
dispute. If the dispute is not resolved by these negotiations,
the matter will be submitted to the American Arbitration
Association ("AAA") for resolution.
b. Any dispute, claim or controversy arising out of or relating to
this Agreement or the breach, termination, enforcement,
interpretation or validity thereof, including the determination
of the scope or applicability of this Agreement to arbitrate,
shall be determined by arbitration in Wilmington, Delaware. The
arbitration shall be administered by AAA pursuant to its
then-current Comprehensive Arbitration Rules. Judgment on any
arbitration award may be entered in any court having jurisdiction
thereof and shall be final and binding upon the parties.
27
c. Notwithstanding the foregoing, nothing in this Section 16.10
shall be construed as limiting in any way the right of a party to
seek injunctive relief with respect to any actual or threatened
breach of this Agreement from a court of competent jurisdiction.
16.11 Remedies. Unless otherwise expressly stated, any remedy expressly provided
for herein shall not be deemed to be a limitation on any remedy for any
such situation or occurrence.
IN WITNESS WHEREOF, the parties have executed this Agreement through their
duly authorized representatives as of the date first written above.
BIOMIMETIC PHARMACEUTICALS INC. XXXXXX XXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------- ------------------------------------
Xxxxxx X. Xxxxx, DDS Xxxxxx X. Xxxxxxxx
28
Xxxxxx Xxxx Corporation and BioMimetic Pharmaceuticals Inc.
DEVELOPMENT, MANUFACTURING AND SUPPLY AGREEMENT
Dated JUNE 28, 2005
SCHEDULE A
The Development Plan shall be inserted as soon as practicable.
BMPI /s/ Xxxxxx X. Xxxxx KNC /s/ Xxxxxx X. Xxxxxxxx
-------------------------------- ------------------------------------
CONFIDENTIAL
Xxxxxx Xxxx Corporation and BioMimetic Pharmaceuticals Inc.
DEVELOPMENT, MANUFACTURING AND SUPPLY AGREEMENT
Dated JUNE 28, 2005
SCHEDULE B
Material Specification shall be inserted as soon as practicable.
BMPI /s/ Xxxxxx X. Xxxxx KNC /s/ Xxxxxx X. Xxxxxxxx
-------------------------------- ------------------------------------
Xxxxxx Xxxx Corporation and BioMimetic Pharmaceuticals Inc.
DEVELOPMENT, MANUFACTURING AND SUPPLY AGREEMENT
Dated June 28, 2005
SCHEDULE C
PRODUCT SPECIFICATIONS
Page 1 of 2
LOT RELEASE
SPECIFICATION PRODUCT REQUIREMENT REQUIREMENT**
--------------------------- ---------------------------------- -------------
1. Product TBD
2. Configuration Putty form matrix, Sheet form
matrix, and Injectable Form Matrix
3. % Nitrogen by Kjeldahl **
method* X
4. Hydroxyproline by wet **
chemistry method* X
5. Mineral Particle Size TBD
by X method
6. Mineral Content by X ** X
method
7. Collagen Ash Content **
by Gravimetric method*
8. pH
9. Endotoxin Content by
LAL method* X
10. Injectability
(injectable product
only) X
11. Solids by gravimetric TBD X
method*
12. Heavy Metals by AA* **
BMPI /s/ Xxxxxx X. Xxxxx KNC /s/ Xxxxxx X. Xxxxxxxx
-------------------------------- ------------------------------------
** REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
Xxxxxx Xxxx Corporation and BioMimetic Pharmaceuticals Inc.
DEVELOPMENT, MANUFACTURING AND SUPPLY AGREEMENT
Dated June 28, 2005
LOT RELEASE
SPECIFICATION PRODUCT REQUIREMENT REQUIREMENT**
--------------------------- ---------------------------------- -------------
13. Sterility (USP) Gamma sterilized at a minimum dose
of 25 kGy (max TBD) X
14. Size 3 cc deliverable doses
5 cc deliverable doses
10 cc deliverable doses
15. Package Configuration Package integrity must meet
applicable regulatory requirements
to include, but not limited to, EN
868 and ISO 11607. Specific
package design will be developed
collaboratively by BMPI and KNC.
16. Package Integrity All seals have minimum strength of
0.75 lb./linear in.
17. Expiration Date A minimum of 2 years expiry date
(final TBD)
18. Storage Ambient temperature
* Test methods are subject to change.
** Lot release testing results will be provided on each
Certificate of Conformance
NOTES:
lead times to be added
These Product Specifications are preliminary, and are to be finalized on a
Product by Product basis
These Lot Release Criteria are to be finalized on a Product by Product Basis
BMPI /s/ Xxxxxx X. Xxxxx KNC /s/ Xxxxxx X. Xxxxxxxx
-------------------------------- ------------------------------------
Xxxxxx Xxxx Corporation and BioMimetic Pharmaceuticals Inc.
DEVELOPMENT, MANUFACTURING AND SUPPLY AGREEMENT
Dated JUNE 28, 2005
SCHEDULE D
TRANSFER PRICE
COMBINED ANNUAL UNIT VOLUME PRICING *
---------------------------------------------------------------------
** ** ** **
Units Units Units and greater
---------------------------------------------------------------------
Product Size and
Configuration **
---------------------------------------------------------------------
3 cc Putty ** ** ** **
---------------------------------------------------------------------
5 cc Putty ** ** ** **
---------------------------------------------------------------------
10 cc Putty ** ** ** **
---------------------------------------------------------------------
3 cc Injectable ** ** ** **
---------------------------------------------------------------------
5 cc Injectable ** ** ** **
---------------------------------------------------------------------
10 cc Injectable ** ** ** **
---------------------------------------------------------------------
Sheet XXX XXX XXX XXX
---------------------------------------------------------------------
* Any combination of product configurations purchased annually.
** Volume after hydration with PDGF
BMPI /s/ Xxxxxx X. Xxxxx KNC /s/ Xxxxxx X. Xxxxxxxx
-------------------------------- ------------------------------------
** REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
Xxxxxx Xxxx Corporation and BioMimetic Pharmaceuticals Inc.
DEVELOPMENT, MANUFACTURING AND SUPPLY AGREEMENT
Dated JUNE 28, 2005
SCHEDULE E
EXAMPLE OF ROLLING FORECAST GROWTH
Shows Maximum Allowed Rate of Twenty-Five Percent Growth
---------------------------------------------------------------------
MONTH 1 2 3 4 5 6 7 8 9 10 11 12
---------------------------------------------------------------------
Month 1
Planning
Forecast ** ** ** ** ** ** ** ** ** ** ** **
---------------------------------------------------------------------
Month 2
Planning
Forecast ** ** ** ** ** ** ** ** ** ** **
---------------------------------------------------------------------
Month 3
Planning
Forecast ** ** ** ** ** ** ** ** ** **
---------------------------------------------------------------------
Month 4
Planning
Forecast ** ** ** ** ** ** ** ** **
---------------------------------------------------------------------
Month 5
Planning
Forecast ** ** ** ** ** ** ** **
---------------------------------------------------------------------
Month 6
Planning
Forecast ** ** ** ** ** ** **
---------------------------------------------------------------------
Month 7
Planning
Forecast ** ** ** ** ** **
---------------------------------------------------------------------
Month 8
Planning
Forecast ** ** ** ** **
---------------------------------------------------------------------
Month 9
Planning
Forecast ** ** ** **
---------------------------------------------------------------------
Month 10
Planning
Forecast ** ** **
---------------------------------------------------------------------
Month 11
Planning
Forecast ** **
---------------------------------------------------------------------
Month 12
Planning
Forecast **
---------------------------------------------------------------------
--------------------------------------------------------------------------
MONTH 13 14 15 16 17 18
--------------------------------------------------------------------------
Month 1
Planning
Forecast
--------------------------------------------------------------------------
Month 2
Planning
Forecast **
--------------------------------------------------------------------------
Month 3
Planning
Forecast ** **
--------------------------------------------------------------------------
Month 4
Planning
Forecast ** ** **
--------------------------------------------------------------------------
Month 5
Planning
Forecast ** ** ** **
--------------------------------------------------------------------------
Month 6
Planning
Forecast ** ** ** ** **
--------------------------------------------------------------------------
Month 7
Planning
Forecast ** ** ** ** ** **
--------------------------------------------------------------------------
Month 8
Planning
Forecast ** ** ** ** ** ** **
--------------------------------------------------------------------------
Month 9
Planning
Forecast ** ** ** ** ** ** ** **
--------------------------------------------------------------------------
Month 10
Planning
Forecast ** ** ** ** ** ** ** ** **
--------------------------------------------------------------------------
Month 11
Planning
Forecast ** ** ** ** ** ** ** ** ** **
--------------------------------------------------------------------------
Month 12
Planning
Forecast ** ** ** ** ** ** ** ** ** ** **
--------------------------------------------------------------------------
** REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
* The first three months of each planned forecast are considered firm,
pursuant to Section 4.5(e).
BMPI /s/ Xxxxxx X. Xxxxx KNC /s/ Xxxxxx X. Xxxxxxxx
-------------------------------- ------------------------------------
Xxxxxx Xxxx Corporation and BioMimetic Pharmaceuticals Inc.
DEVELOPMENT, MANUFACTURING AND SUPPLY AGREEMENT
Dated JUNE 28, 2005
SCHEDULE F
CERTIFICATE OF CONFORMANCE
AND
CERTIFICATE OF ANALYSIS
Certificate examples are to be added as soon as practicable.
The C of C shall include the Lot Release Criteria, as defined in Schedule C.
BMPI /s/ Xxxxxx X. Xxxxx KNC /s/ Xxxxxx X. Xxxxxxxx
-------------------------------- ------------------------------------
CONFIDENTIAL
