Exhibit 10.5
AMENDED AND RESTATED
MASTER STRATEGIC ALLIANCE AGREEMENT
THIS AMENDED AND RESTATED MASTER STRATEGIC ALLIANCE AGREEMENT, dated as of
August ____, 1998 (the "Agreement"), is made and entered into by and between
HemaSure Inc., a Delaware corporation ("HEMA" or "HemaSure"), and the American
Red Cross Biomedical Services a unit of the American National Red Cross, a
not-for-profit corporation chartered by an act of Congress ("ARCBS"). This
Agreement amends and restates that certain Master Strategic Alliance Agreement
dated June 5, 1996 between HEMA and ARCBS and, as of the date hereof, shall
replace said Master Strategic Alliance Agreement in its entirety.
INTRODUCTION
WHEREAS, ARCBS is the nation's pre-eminent provider of blood services, serving
more than 3,000 hospitals through the generous donations of some 22,000 people
daily;
WHEREAS, HEMA is, among other things, in the business of developing products to
increase the safety of donated blood and to improve certain blood collection and
transfusion procedures; and
WHEREAS, ARCBS and HEMA (collectively, the "Parties") believe that a strategic
alliance and cooperation between them would be in their mutual interest, all in
accordance with the terms and conditions hereinafter set forth,
NOW, THEREFORE, in consideration of the promises and the mutual covenants of the
Parties herein contained, it is hereby agreed as follows:
1. Scope of Agreement.
1.1 The Parties' intention under this Agreement is to facilitate the
development and expansion of a strategic alliance between them covering the
following areas:
(a) a co-development arrangement between the Parties with respect to
HEMA's leukoreduction filter (also known as r\LS System );
(b) a collaboration on HemaSure's leukocyte recovery project;
(c) a collaboration on HemaSure's in-line red blood cell filtration
project;
(d) a collaboration with respect to the development of a dockable
platelet filter;
(e) a collaboration with respect to the development of an in-line
whole blood filter;
(f) a collaboration with respect to a dockable system to remove tumor
cells from stem cell collections.
Each of the projects, collaborations, programs or agreements set forth
above shall be hereinafter referred to as a "Project."
778200.1
1.2 Each Party agrees to negotiate in good faith the definitive terms of
each of the Projects described above. All of the agreed projects will be
covered by separate Development Agreements, as described in Section 2.4.
1.3 It is understood by the Parties that this Agreement is intended to
establish a structure of open communication and coordination so as to
facilitate the expansion of the Parties' cooperation as set forth above and
is not intended to inhibit or restrict either Party from pursuing business
opportunities outside of this Agreement where deemed appropriate by such
Party.
2. Administration.
2.1 As soon as practicable after the date hereof, the Parties shall
establish a Contract Management Advisory Committee ("CMAC") which shall
remain in existence for the term of this Agreement. The CMAC shall be
composed of one senior management representative of each ARCBS and HEMA who
shall initially be the individuals set forth in Section 15.1 (i) and
Section 15.1 (iii) below. Such individuals shall have the responsibility
for coordinating and overseeing all HEMA and ARCBS activities taking place
pursuant to this Agreement, and shall each have sufficient authority to
fulfill these responsibilities in the name and on behalf of his or her
company in all matters related to this Agreement. The CMAC will maintain
open communications to coordinate the overall cooperation of the Parties
hereunder. In this regard, the CMAC shall hold a meeting at least once
every three months to discuss:
(a) Status of any existing Projects; and
(b) General issues of business development and strategic cooperation
between the Parties, including possible multi-party cooperative efforts
with other potential strategic partners, in connection with any existing
Products.
2.2 Meetings of the CMAC shall be held at the Parties' convenience at
such times and such locations as are mutually acceptable to the Parties. An
extraordinary meeting may be convened at any time at the written request of
either Party. This extraordinary meeting will be held at a location of the
other Party's choosing. The Party hosting the meeting shall prepare the
agenda and minutes for the meeting.
2.3 No recommendation or other action may be made or taken by the CMAC
unless the representatives of both ARCBS and HEMA are in attendance. All
decisions of the CMAC shall be made by unanimous agreement.
2.4 In such case as the Parties decide to pursue a Project, the CMAC
shall establish the guidelines for the development of such Project. The
apportionment of each Parties' responsibilities pertaining to a specific
Project will be set forth in, and governed by, individual definitive
collaboration, development and/or other similar agreements to be entered
into by the Parties in respect of such Project (each of which shall be
hereinafter referred to as a "Development Agreement"). The CMAC shall
recommend for approval by the Parties the execution of such Development
Agreements.
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2.5 Any issues that may arise during any phase of a Project which
cannot be resolved by the Project teams of the Parties shall be referred to
the CMAC for resolution.
3. Warrants. Upon the execution and delivery by the Parties of Development
Agreements HemaSure shall issue to ARCBS warrants to purchase shares of
HemaSure's common stock, par value $.01 per share (the "Common Stock"), in
the respective amounts set forth on Exhibit A and at an exercise price per
share equal to 110% of the last reported Sale Price for the Common Stock as
of the close of business as of the date hereof (the "Warrants"), pursuant
to a warrant agreement mutually agreeable to HemaSure and ARCBS. The
Warrants shall expire five years from the date of grant as contemplated by
this Agreement. HEMA also shall grant to ARCBS certain demand and "piggy
back" registration rights with respect to the Common Stock issuable upon
exercise of the Warrants pursuant to a registration rights agreement, in
form and substance satisfactory to the respective parties. The "Sale Price"
per share of Common Stock for such date shall be (a) the closing sale price
per share of Common Stock on such date, or if no sales occurred on such
date, the most recent such price, as reported on the composite tape of such
national securities exchange as shall then be the primary market for the
Common Stock, or (b) if the Common Stock shall not then be listed or
admitted to trading on any national securities exchange or if the Common
Stock shall then be so listed or admitted to trading on a national
securities exchange but that shall not then be the primary market for the
Common Stock, the closing sale price per share of the Common Stock on such
date, or if no sales occurred on such date, the most recent such price, as
reported by NASDAQ or a comparable system, or (c) if not determinable as
aforesaid, the mean between the highest and lowest bid prices reported on
such date, or if no sales occurred on such date, the most recent such mean,
by market makers and dealers for the Common Stock listed as such by the
National Quotation Bureau, Incorporated or any similar successor
organization.
4. Disputes. It is the intention of the Parties to settle amicably all
differences or disputes arising from this Agreement by conference and
negotiation. The Parties will first attempt to resolve any working level
disputes through the Project team and, if there is no resolution, through
the CMAC. In the event that any problem or dispute is not so resolved,
either Party may, upon written notice to the other, request that the matter
be referred to senior management officers within each respective
organization with the express authority to resolve the problem or issue.
Such representatives shall meet or confer at least once in good faith to
negotiate a resolution. If the representatives are unable to resolve the
problem or dispute within 21 calendar days, any Party may take the matter
to the Dispute Resolution Procedure set forth below. No Party may institute
litigation until such procedure has been completed unless, and to the
extent that, doing so is necessary to avoid irreparable harm.
Dispute Resolution Procedure. If any problem or dispute arising out of, or
related to, this Master Agreement is not resolved by the Parties in the
manner described above, at the request of either of the Parties, the matter
shall be submitted to mediation, or to such other form of dispute
resolution acceptable to both of the Parties. The mediation shall be
conducted in accordance with the Center for Public Resources Model
Procedure for Mediation of Business Disputes.
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5. Specific Performance. Notwithstanding Section 4 above, the Parties agree
that any breach or failure by either Party to perform its obligations under
Sections 6, 7, and 10 below shall result in immediate and irreparable
damage to the other Party which cannot be fully and adequately compensated
in money damages and that, in the event of such breach or failure, the
other Party shall be entitled to injunctive relief and specific performance
in addition to any other remedies to which it may be entitled at law or in
equity.
6. Public Statements and Trade Names
6.1 Neither Party shall make or distribute any public announcement or
media release concerning this Agreement or any Development Agreement or the
subject matter or terms of this Agreement or any Development Agreement
without the prior written approval of the other Party, except as otherwise
required by law as advised by counsel.
6.2 Neither this Agreement nor any Development Agreement grants or is
intended to grant to any Party a license to use the trademark, trade name
or any other intellectual property of any other Party. Each of the Parties
recognizes that the name of the other Party represents a valuable asset of
that Party and that substantial recognition and goodwill are associated
with such trade name and such Party's various trademarks. Each Party hereby
agrees that neither it nor any of its affiliates shall use at any time the
other Party's name, logo, or any other trademarks without prior written
authorization from such other Party.
6.3 Each of the Parties acknowledges that a violation of this Section
6 would cause irreparable harm to the other Party for which no adequate
remedy at law exists and each Party therefore agrees that, in addition to
any other remedies available, the aggrieved Party shall be entitled to
injunctive relief to enforce the terms of this Section. The prevailing
Party shall be entitled to recover all costs and expenses, including
reasonable attorney's fees incurred because of any legal action arising in
relation to this Section.
7. Subject Matter of Projects. Notwithstanding Section 1.3, HEMA agrees that,
during the term of this Agreement and for so long as a particular Project
is covered by a Development Agreement between the Parties that has not
expired or been terminated, it shall not with or from any third party
solicit, entertain, or encourage proposals with respect to, or participate
in any negotiations or discussions concerning, or enter into any
transactions involving, the subject matter of such Project without ARCBS's
prior written consent. HEMA shall instruct its officers, directors, agents
and affiliates to refrain from doing any of the foregoing.
8. Limitation of Liability and Remedies. IN NO EVENT SHALL A PARTY BE LIABLE
TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL
DAMAGES, INCLUDING WITHOUT LIMITATION FOR LOSS OF ANTICIPATED PROFITS, IN
CONNECTION WITH AN ALLEGED BREACH OF THIS AGREEMENT, HOWEVER CAUSED, BY
NEGLIGENCE OR OTHERWISE; PROVIDED THAT THIS LIMITATION ON LIABILITY SHALL
NOT APPLY IN THE EVENT OF A WILLFUL OR GROSSLY NEGLIGENT BREACH OF THE
PROVISIONS OF THIS AGREEMENT.
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9. Relationship of the Parties.
(a) The relationship of the Parties under this Agreement is that of
independent contractors and that relationship shall continue as such
throughout the term of this Agreement. Nothing contained in this Agreement
shall be construed to constitute a partnership, agency relationship,
association or joint venture between the Parties. No officer, employee or
agent of either Party shall be deemed to be the officer, employee or agent
of the other, and neither Party shall represent otherwise. Neither Party
shall have the authority to make any agreement or commitment, or incur any
liability on behalf or the other, except as specifically authorized in this
Agreement.
(b) The Parties shall not enter into any Development Agreement with
respect to which the substance of sub-paragraph (a) as applied thereto
would not apply.
10. Confidential Information. During the term of this Agreement and for a
period of five (5) years from any termination or expiration hereof, the
Parties agree to keep in confidence and not to disclose to any third party,
or use for any purpose, except pursuant to, and in order to carry out, the
terms and objectives of this Agreement and any Development Agreement, any
Confidential Information. As used herein, "Confidential Information" shall
mean all trade secrets or confidential or proprietary information relating
to the business of the disclosing Party or any information relating to any
Project or the subject matter of any Project. The restrictions on the
disclosure and use of Confidential Information set forth in the first
sentence of this Section 10 shall not apply to any Confidential Information
which (a) was known by the receiving Party (as evidenced by the receiving
Party's written records) prior to disclosure by the disclosing Party
hereunder; (b) is or becomes part of the public domain through no fault of
the receiving Party; or (c) is disclosed to the receiving Party by a third
party having a legal right to make such a disclosure. In addition, the
foregoing confidentiality and nondisclosure obligations shall not apply to
information which is required to be publicly disclosed by law or regulation
provided that, in such event, the receiving Party provides the disclosing
Party with prompt notice of such disclosure so that the disclosing Party
has the opportunity if it so desires to seek a protective order or other
appropriate remedy.
11. Indemnification; Insurance.
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(a) HEMA agrees to indemnify and hold harmless ARCBS and its
directors, governors, officers, employees and agents against any liability,
claim, cost or expense (including reasonable attorneys' fees) in respect to
bodily injury, death, and property damage arising from the willful
misconduct or negligent activity of HEMA, its directors, officers,
employees or agents during its performance of its responsibilities under
this Agreement and/or the manufacture or sale of any product developed
pursuant to this Agreement or any Development Agreement, including but not
limited to any claim against ARCBS for infringement of patent rights owned
or held by Pall Corporation. HEMA further agrees to indemnify ARCBS, its
directors, officers, employees and agents from and against any loss,
damages, costs, or expenses ("liability") in connection with any claim
arising from any defect in the merchandise, goods or products provided or
in the provision of any services pursuant to this Agreement or any
Development Agreement, or by reason of the nature of the materials
contained in said merchandise, goods or products or provision of service,
except to the extent that the final order of a court of competent
jurisdiction has determined that a proportion of such liability thereof was
caused by the willful misconduct or negligent activity of ARCBS, its
directors, officers or employees, in which case, ARC shall be responsible
solely for its proportionate share of the liability.
(b) ARCBS agrees to defend, hold harmless, and indemnify HEMA, its
directors, officers, employees and agents against any liability, claim,
cost or expense (including reasonable attorneys' fees) in respect to bodily
injury, death, and property damage arising from the sole negligence of
ARCBS, its directors, officers or employees during its performance of its
responsibilities under this Agreement
(c) Each Party shall maintain the following insurance coverages in full
force and effect for the term of this Agreement. Each Party further agrees
to maintain insurance with terms, conditions and amounts not less than that
set forth herein for the term of any Development Agreement, unless any such
Development Agreement shall specify coverage terms, conditions or amounts
for either or both of the Parties which exceed that set forth in this
Agreement:
(i) Commercial General Liability Insurance in an amount of at
least $4,000,000 (Four Million Dollars) 2) an auto liability policy
with at least $1,000,000 (One Million Dollars) in coverage and; 3)
Workers' Compensation coverage covering each Party's own employees
with statutory limits for each jurisdiction where the work required
under this Agreement or any Development Agreement is performed
(including monopolistic states if any work is to be performed in one
or more of them) and an employers' liability policy with at least the
following limits, $250,000 per accident, $500,000 per disease, and
$250,000 disease (each employee).
(ii) HEMA further agrees to maintain not less than $4,000,000
(Four Million Dollars) of products liability coverage naming ARCBS an
additional insured party with respect to any product developed,
created, manufactured, distributed or sold as a result of this
Agreement or any Development Agreement. Said products liability
coverage shall include coverage for claims made against the policy for
injury occurring as a result of a flaw problem with the design or
manufacture of HEMA's products. HEMA agrees to maintain full
replacement value "All Risk" property insurance on all property and
equipment of HEMA used under this Agreement or any Development
Agreement, and said property insurance shall insure at all times all
HEMA products being manufactured and HEMA agrees to waive any right of
subrogation for loss or damage to any HEMA property at, on, or in
ARCBS' or HEMA's facilities. HEMA agrees to obtain, if required in
such property insurance, a waiver of subrogation in favor of ARCBS.
Said property insurance shall include Business Interruption and Extra
Expense coverage for such losses arising from loss or damage to
aforementioned HEMA property without expectation of contribution from
any such insurance ARCBS may maintain.
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(iii) Each Party shall, at its sole expense, keep in force
policies of insurance in the amounts as specified, and as required by
statute, with carriers reasonably satisfactory to the other; and said
insurance will be written as primary policy coverage and not
contributing with, or in excess of any insurance which the other Party
shall carry with respect to the work of each Party under this
Agreement. Certificates of insurance evidencing all of the above
coverages and conditions (types and amounts) shall be produced upon
written request and remain in full force and effect during the term of
this Agreement. HEMA shall supply evidence of its property insurance
on an XXXXX "Evidence of Property Insurance" form 27. Each Party's
certificate(s) of insurance shall provide for not less than thirty
(30) days written notice of cancellation, non-renewal or reduction in
terms and conditions below that required herein to the other Party.
12. Term and Termination.
12.1 This Agreement shall become effective upon execution by both
Parties and shall continue in full force and effect for 5 years from the
date of this Agreement, unless terminated earlier by the mutual agreement
of the Parties or in accordance with the provisions herein. This Agreement
shall automatically renew for one additional 5 year term unless either
Party provides written notice to the other Party no later than 90 days
prior to the expiration of the first 5 year term of its desire (for any or
no reason) that this Agreement expire and not renew at the end of the first
5 year term, in which case this Agreement shall expire at such time and
shall not be renewed. In the event this Agreement is renewed for a second 5
year term, it shall continue in full force and effect for 5 years from the
end of the first 5 year term, unless terminated earlier by the mutual
agreement of the Parties or in accordance with the provisions herein.
12.2 On the occurrence of any of the following events (each a
"Termination Event"), this Agreement shall automatically terminate, unless
the Party which has not caused or is not the subject of the Termination
Event elects within 30 days following such Termination Event to waive
termination:
(a) a Party has filed a voluntary petition in bankruptcy, takes the
benefit of any insolvency act, is dissolved or adjudicated a bankrupt;
upon the entry of a decree or order by a court having jurisdiction
approving a petition with respect to a Party seeking reorganization,
arrangement, adjustment, or composition under any applicable federal
or state bankruptcy, insolvency or similar law; upon the written
admission by a Party of its inability to pay its debts generally as
they become due; the taking of any corporate action by a Party in
furtherance of any of the foregoing actions -- each, effective
immediately upon receipt of notice of termination;
(b) the appointment of a receiver, liquidator, assignee, trustee,
sequestrator or similar official for all or substantially all of the
business or assets of a Party, effective immediately upon receipt of
notice of termination.
12.3 Either Party shall have the right to terminate this Agreement for
"cause" at any time, effective upon the giving of written notice to the
other Party in the event that the other Party commits a default or
violation of this Agreement which is not remedied within thirty (30) days
after receipt of written notice thereof.
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12.4 ARCBS shall be entitled to unilaterally terminate this Agreement
in the event the conditions for termination arise, as provided in Section
17, effective upon the giving of written notice to HEMA of such event.
13. Entire Agreement. This Agreement is the complete statement of the agreement
between the Parties, and supersedes all prior proposals, understandings and
all other agreements, oral and written, between the Parties relating to the
subject matter of this Agreement. Notwithstanding the foregoing, in no
event shall the Master Purchase Agreement dated April 15, 1996 between the
Parties be deemed to be superseded by this Agreement. This Agreement cannot
be modified or altered except by a written instrument duly executed by both
Parties.
14. Successors, Assignment. This Agreement shall be binding upon, and shall
inure to the benefit of, successors to a Party hereto, but shall not
otherwise be assignable by either Party without the prior written consent
of the other Party.
15. Notices.
15.1 All notices, requests, consents and other communications under
this Agreement shall be in writing and shall be mailed by first class
certified or registered mail, return receipt requested, postage prepaid:
(i) if to HEMA, at HemaSure Inc., 000 Xxxxx Xxxxx, Xxxxxxxxxxx,
Xxxxxxxxxxxxx 00000 ((000) 000-0000), Attention: President, or at such
other address or addresses as may have been furnished in writing by
HEMA to ARCBS;
(ii) a copy of all information sent to HEMA should also be sent
to Xxxx X. Xxxxxx, III, Esq., Battle Xxxxxx LLP, 00 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, 00000 (telecopier no. (000) 000-0000); and
(iii) if to ARCBS, at 0000 Xxxxx Xxxx Xxxx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000 (telecopier no. (000) 000-0000), Attention: Xxxxx X.
Xxxxxx, Vice President of Manufacturing, or at such other address or
addresses as may have been furnished in writing by ARCBS to HEMA.
15.2 Notices provided in accordance with this Section shall be deemed
delivered two business days after deposit in the mail.
16. Relation to Development Agreements. Execution of this Agreement shall not
obligate either Party to develop or commercialize any product in the
absence of a Development Agreement relating thereto. All references in this
Agreement to this Agreement shall not encompass or be deemed to encompass
any or all Development Agreements unless this Agreement expressly refers to
such Development Agreements.
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17. Xxxxxxxxxxxx.Xx the event implementation of any of the provisions of this
Agreement presents a material risk of loss of American Red Cross's tax
exempt status or the imposition of intermediate sanctions under Section
4958 of the Internal Revenue Code of 1986, as amended ("Sanctions"), or if
any provision of this Agreement is held invalid, illegal or unenforceable
(any such provision, an "Invalid Provision") in any jurisdiction, the
Parties shall promptly negotiate in good faith a lawful, valid and
enforceable provision that is as similar in terms to such Invalid Provision
as may be possible while giving effect to the future benefits and burdens
accruing to the Parties hereunder, and which removes the risk, if any, of
loss of American Red Cross's tax exempt status and the imposition of
Sanctions, and the remaining provisions of this Agreement shall remain
binding on the Parties hereto. In the event that the Parties cannot agree
on a provision to replace an Invalid Provision, at ARCBS's election, (a)
the Parties shall attempt to renegotiate their relationship in good faith
under commercially reasonable terms, or (b) this Agreement shall terminate
under Section 12.3 of this Agreement.
18. Status of the American Red Cross. Notwithstanding any other provision in
this Agreement to the contrary, the Parties acknowledge and agree that
ARCBS shall not be required to engage in any activity hereunder or under
any Development Agreement that compromises or would compromise the
charitable tax-exempt status of, or presents or would present a reasonable
likelihood of the imposition of Sanctions on, the American Red Cross.
19. Expenses. Each Party shall be solely responsible for its own expenses under
this Agreement.
20. Captions. All captions herein are for convenience only and shall not be
interpreted as having any substantive meaning.
21. Governing Law. This Agreement shall be governed by the laws of State of New
York, in a venue in the Commonwealth of Virginia, without regard to its
conflicts of law rules or principles.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized officers effective the date first written above.
HEMASURE INC. AMERICAN RED CROSS
BIOMEDICAL SERVICES
By: By:
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Name: Name:
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Title: Title:
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Exhibit A
Number of Shares Exercisable Under
Warrant Upon Execution of Definitive
Project Agreement
Definitive collaboration agreement with respect to HemaSure's
leukoreduction filter (subsection 1.1(a)); 150,000
Definitive collaboration agreement with respect to HemaSure's leukocyte
recovery project (subsection 1.1(b)); 50,000
Definitive collaboration agreement with respect to HemaSure's in-line
red blood cell filtration project (subsection 1.1(c)); 50,000
Definitive collaboration agreement with respect to dockable platelet
filters (subsection 1.1(d)); 50,000
Definitive collaboration agreement with respect to in-line whole blood
filters (subsection 1.1(e)); 50,000
Definitive collaboration agreement with respect to a dockable system to
remove tumor cells from stem cell collections (subsection 1.1(f)). 50,000
------
400,000
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