["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
EXHIBIT 10.10
EXCLUSIVE DISTRIBUTION AGREEMENT
BY AND BETWEEN
V.I. TECHNOLOGIES, INC.
AND
UNITED STATES SURGICAL CORPORATION
EFFECTIVE OCTOBER 4, 1996
EXCLUSIVE DISTRIBUTION AGREEMENT
THIS AGREEMENT (this "Agreement"), made this 11th day of September, 1996
by and between V. I. TECHNOLOGIES, INC., a Delaware corporation having its
principal place of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(formerly known as Melville Biologics, Inc.) ("VITEX"), and UNITED STATES
SURGICAL CORPORATION, a Delaware corporation having its principal place of
business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("USSC").
WHEREAS, VITEX is the owner and/or licensee of proprietary rights to
certain fibrin-based surgical glue and certain related applicator technology;
and
WHEREAS, USSC is engaged in the manufacture, distribution and sale of
sutures, surgical staples and other devices and products used in surgery; and
WHEREAS, VITEX wishes to grant USSC exclusive rights to distribute and
sell its fibrin-based surgical glue, and improvements thereto, together with the
option to obtain exclusive rights to related applicator technology, and certain
other products; and
WHEREAS, USSC is willing to accept such rights and option; all on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and intending to be legally bound, the parties agree as follows:
1. DEFINITIONS.
(a) For purposes of this Agreement, the definitions set forth below
shall be applicable:
"Act" shall mean the United States Food, Drug and Cosmetic Act of 1938,
as amended.
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
"Action" shall mean an action, suit or proceeding, whether civil or
criminal or in law or in equity.
"Affiliate" shall mean, as to each party to the Agreement, a Person (as
hereinafter defined) which (i) directly or indirectly owns or controls a
majority of the voting power of such a party, (ii) a majority of its voting
power is directly or indirectly owned or controlled by such party, or (iii) a
majority of its voting power is directly or indirectly owned or controlled by an
entity which directly or indirectly owns or controls a majority of the voting
power of such party. Notwithstanding the foregoing, VITEX's principal
stockholders, the New York Blood Center and Ampersand Ventures shall not be
considered Affiliates of VITEX.
"Applicator Product" shall mean a product whose primary function is to
apply a Product, Improved Product or Enhanced Product.
"CRO" shall mean clinical research organization.
"Enhanced Product" shall mean a Product or Improved Product for use
within the Field ***************************************************************
********************************************************************************
******************************.
"Exclusivity Minimum Sales" shall have the meaning set forth in Exhibit
C to this Agreement.
"Existing Patents" shall mean the patents and patent applications owned
by, or licensed to, VITEX or any of its Affiliates, or in which any of such
Persons have any right, title or interest, and which involve or relate to a
Product, and all foreign and domestic patents issuing on any of the foregoing
patent applications, and all continuations, continuations-in-part, divisions,
reissues, reexaminations, additions and renewals thereof including, without
limitation, the patents and patent applications listed on Exhibit B to this
Agreement.
"Field" shall mean all in vivo human and veterinary medical applications
involving gluing, sealing or providing hemostasis of or within any tissue, body
or organ, or a part or portion of any thereof.
-2-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
"Future Patents" shall mean any patents or patent applications which may
after the execution of this Agreement by the parties hereto be or become owned
by, or licensed to, VITEX or any of its Affiliates, or in which any of them may
have any right, title or interest, and which involve or relate to Products and
all foreign and domestic patents issuing on any of the foregoing patent
applications, and all continuations, continuations-in-part, divisions, reissues,
reexaminations, additions and renewals thereof.
"GAAP" shall mean generally accepted accounting principles.
"Good Manufacturing Practices" shall mean good manufacturing practices
as required by a Governmental Body (defined below) under applicable Law (defined
below) including, without limitation, good manufacturing practices recited for
medical devices set forth at 21 C.F.R. ss.821, as amended from time to time, and
the Establishment Regulation and Device Listing for Manufacturers of Devices set
forth at 21 C.F.R. ss.807, as amended from time to time.
"Governmental Approvals" shall mean permits, licenses, consents,
authorizations, approvals and filings with and registrations from any
Governmental Body specifically relating to the manufacture, marketing,
distribution or sale of a Product (defined below), but excluding any of the
foregoing necessary to conduct or engage in business generally or the
manufacturing, marketing, distribution or sale of surgical, medical or
pharmaceutical products generally.
"Governmental Body" shall mean any agency, bureau, commission, court,
department, political subdivision, tribunal or other instrumentality of any
government, whether federal, state or local, domestic or foreign.
"Improved Product" shall mean modified versions of a Product which
improve the storage or reconstitution time of a Product. Examples include a
********************************************************************************
***********************************************.
"Laws" shall mean statutes, laws, regulations, rules, ordinances,
guidelines, judgments, orders, decisions or interpretations of any Governmental
Body.
-3-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
"Lien" shall mean any mortgage, lien (voluntary or involuntary), pledge,
hypothecation, charge, preference, priority, security interest, claim, right or
encumbrance of any kind.
"ML" shall mean milliliter.
"Net Sales" shall mean gross sales of Products billed and shipped by
USSC or its Affiliates or permitted assignees less allowances and discounts
actually allowed (other than advertising allowances, or fees or commissions to
salesmen or sales representatives), returns, invoices written off as
uncollectible, billed taxes and customs duties, costs of insurance and
transportation freight and transit insurance, and shall not include samples or
demonstration materials or any sales to USSC employees for any reason other than
resale. The term "Net Sales" shall not include sales between USSC and its
Affiliates, or permitted assignees. For purposes of the "Net Sales" definition,
the term Products shall also include Products sold in packages, trays or other
groups of items consisting of one or more Products and one or more other
products (the "Package"). The Net Sales price of any Product sold in a Package
shall bear the same ratio to the Net Sales price of the Package, as the
individual retail list price of the Product bears to the sum of all individual
retail list prices of every item in the Package if all of such items were sold
separately.
"New Product" shall mean a product which is not a Product, an Improved
Product, or an Enhanced Product for use in the Field **************************
********************.
"New Application" shall mean any medical application of a Product,
Improved Product, or Enhanced Product for use outside the Field. Examples
include liposome-encapsulated chemotherapeutics delivered by fibrin glue.
"New York Blood Center License Agreement" shall mean that certain
agreement entitled "Exclusive License Agreement (#4) for Virally Inactivated
Fibrin Sealant/Thrombin Product between the New York Blood Center, Inc. and
Melville Biologics, Inc.", a copy of which is attached hereto as Exhibit E.
"Patents" shall mean collectively, Existing Patents and Future Patents.
-4-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
"Person" shall mean any individual, corporation, partnership,
association, trust or other entity or organization, including a governmental or
political sub division of any agency or instrumentality thereof.
"Products" shall mean collectively, fibrinogen combined with thrombin
and reconstitution solution (sometimes referred to as fibrin sealants or fibrin
glues) for use in the Field. Exhibit A shall contain initial specifications of
the Product.
"Region" shall mean, as the context shall apply, **********************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
*******************************************************************************
********************************************.
"Regulatory Costs" shall mean all costs, fees and expenses incurred or
required to be incurred by any party to this Agreement and their respective
advisors, consultants, representatives, agents and contractors in order to
obtain all necessary Governmental Approvals including, without limitation, the
costs of clinical trials.
"Technology" shall mean all technology pertaining to Products,
including, without limitation, data, inventions, applications, ideas or
concepts, processes, formulae, mixtures, compositions, delivery systems,
techniques, designs, specifications, drawings, technical information, methods,
analyses, test reports, component lists, catalogues, vendor lists and supplier
lists pertaining, directly or indirectly, to development, manufacture,
production, supply or use, including, but not limited to, technology that is or
could be the subject matter of a foreign or domestic patent or patent
application, whether or not reduced to writing in a patent application, records
pertaining to the manufacturing of the Products, including, without limitation,
batch production records, QC records and test methods and validation, as well as
all pharmaceutical and toxicological parts of all registration dossiers,
including all reasonable biological studies, virus validation studies, and
expert reports insofar as any of the foregoing relates to Products, and (ii) the
description of the processes involving or related to the
-5-
manufacture or production of the Products, including, without limitation, as
described in Exhibit D to this Agreement.
"Territory" shall mean all countries of the world.
(b) In addition to the foregoing defined terms, the following terms
shall have the meanings set forth in the referenced Sections of this Agreement:
Term Section
---- -------
Alternative Enhanced Product Transaction 2
Bayer 14
Capacity Event 8
Capacity Event License 8
Capacity Event Period 8
Capacity Event Royalty 8
Clinical Trial Committee 6
Confidential Information 7
Dispute 25
Distribution Rights 2
Effective Date 26
Enhanced Product Exclusive Evaluation Period 2
Exclusive Evaluation Period 2
Exclusive Negotiation Period 2
Exclusivity Distributorship Fee 5
Existing Trial 6
Forecast 8
Force Majeure 22
IPRs 16
Liability 11
Maximum Japanese Price 9
NYBC 16
NYBC IPR 16
NYBC License 17
Plasma Recall 12
Price Increase Event 9
-6-
Price Increase ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇ Price 9
Regional Producer 3
Regional Sourced Products 3
Rights 2
Royalty 5
Senior Executives 24
Term 4
USSC Events of Default 18
USSC Indemnified Party 11
VITEX Events of Default 18
VITEX Indemnified Party 11
VITEX Marketing Materials 13
2. RIGHTS GRANTED.
--------------
For and during the Term (defined below), and subject to the terms and
conditions of this Agreement, the Parties agree to the following:
(a) Products: VITEX hereby grants and conveys to USSC the exclusive
right in the Territory to seek Governmental Approvals, use, market, distribute
and sell Products for use in the Field (collectively, the "Rights"). The Rights
shall include, but are not limited to, the right to market, distribute and sell
Products individually or in kits which may include one or more Products and one
or more other products, in USSC sole and absolute discretion.
(b) Improved Product:
(i) If during the Term, VITEX or any of its Affiliates conceives,
develops or obtains any rights, title or interest in an Improved Product, VITEX
shall furnish full written details thereof to USSC, shall provide to USSC any
prototype thereof in VITEX's possession or control and such Improved Product
shall be deemed to be Products for all purposes of this Agreement and included
within USSC's Rights under this Agreement.
-7-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
(ii) Notwithstanding Section 2(b)(i) above, during the term of this
Agreement, VITEX may propose to USSC, or USSC may propose to VITEX that VITEX
undertake development of a certain Improved Product. In either such event, VITEX
shall prepare and submit to USSC a detailed research and development plan
including proposals for research personnel, budgets and time frames for the
development of such Improved Product. If the parties shall agree upon such
research and development plan, USSC shall reimburse VITEX ******************* of
VITEX's documented and agreed upon direct research and development costs (i.e.
****************************************************************************)
pursuant to such plan for such Improved Product ******************************
****************************************************************.
Notwithstanding, the failure of USSC to agree to a research or development plan
or the funding thereof, or, in the event USSC commences funding and at any time
thereafter discontinues funding thereof, in whole or in part, shall not (aa) be
deemed a breach of this Agreement, (bb) reduce or eliminate USSC's Rights with
respect thereto under this Agreement, nor (cc) provide VITEX with the right to
transfer to any third Person any rights, title or interest in or with respect
thereto. The parties understand and agree that such USSC commitments and funding
shall be subject, in each case, to termination by USSC in its discretion at any
time on thirty (30) days notice, provided that USSC shall remain liable for such
costs incurred by VITEX thereafter based on prior written agreements or written
commitments agreed by USSC in writing which agreements or commitments are not
cancellable on such thirty (30) days' notice. In any such event, VITEX will use
reasonable efforts to terminate such agreement or commitment as promptly as
possible and to minimize the costs resulting therefrom. The control, direction
and costs of Phase III clinical trials of Improved Products shall be subject to
Section 6 below in this Agreement.
(iii) VITEX shall maintain books and records in reasonable detail
concerning the research and development costs reimbursable under Section
2(b)(ii) above. USSC shall have the right to inspect and copy such books and
records once each calendar year during normal business hours and with prior
notice.
(c) Enhanced Product:
(i) USSC shall have the right and option to obtain Rights with
respect to Enhanced Products in accordance with this Section 2(c)(i). If during
the Term, VITEX or any of its Affiliates conceives, develops or obtains any
rights, title or interest in an Enhanced Product,
-8-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
VITEX shall (i) furnish full written details thereof to USSC, (ii) provide to
USSC any prototype thereof in VITEX's possession or control, and (iii) provide
USSC a detailed research and development plan including proposals for research
personnel, budgets and time frames for the development of such Enhanced Product.
USSC shall have a period of **************** thereafter (the "Enhanced Product
Exclusive Evaluation Period") to exclusively evaluate such research and
development plan and to determine whether or not USSC wishes to obtain Rights in
respect thereof. During the Enhanced Product Exclusive Evaluation Period, VITEX
shall answer USSC questions concerning the Enhanced Products, shall promptly
forward to USSC any additional Technology or prototypes related to such Enhanced
Product that it may conceive, develop or come into possession or control of
during the Enhanced Product Exclusive Evaluation Period together with its best
good faith estimate of the expected transfer price thereof. If USSC determines
in its discretion to exercise its right and option with respect to such Enhanced
Product and USSC gives notice thereof no later than three (3) days after the
expiration of the Enhanced Product Exclusive Evaluation Period, then, in such
event, USSC shall have Rights with respect to such Enhanced Product provided and
for so long as USSC shall agree in its discretion to reimburse VITEX for *****
************* of VITEX's documented and agreed upon direct research and
development costs (i.e. ******************************************************
**********************) for such Enhanced Product occurring on and after such
notice date and prior to the design and submission for regulatory approval of
Phase III clinical trials and further provided that within thirty (30) days of
exercise of such option VITEX and USSC have agreed in writing upon the transfer
price for such Enhanced Product which agreement shall be negotiated in good
faith, but the failure of the parties to so agree shall not result in the loss
of USSC's Rights with respect to such Enhanced Product. The control, direction
and costs of Phase III clinical trials of such Enhanced Products shall be
subject to Section 6 below. The Parties understand and agree that such USSC
commitments and funding shall be subject, in each case, to termination by USSC
in its discretion at any time on thirty (30) days notice, provided that USSC
shall remain liable for such costs incurred by VITEX thereafter based on prior
written agreements or written commitments agreed by USSC in writing which
agreements or commitments are not cancellable on such thirty (30) days' notice.
In any such event, VITEX will use reasonable efforts to terminate such agreement
or commitment as promptly as possible and to minimize the costs resulting
therefrom. In the event (i) USSC gives VITEX notice of termination of its
commitments and funding with respect to an Enhanced Product under this Section
2(c)(i), and (ii) VITEX thereafter develops such Enhanced Product and/or
transfers any right, title or
-9-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
interest therein to any other Person either prior to or during commercialization
including, without limitation, in the form of license rights or distribution
rights, then, in any such event, VITEX shall repay to USSC from the proceeds,
income or other consideration received by VITEX therefrom ******************* of
the amount of the funding theretofore provided by USSC to VITEX in connection
with such Enhanced Product.
(ii) If during the Term, USSC has not exercised its option under
Section 2(c)(i) above with respect to an enhanced Product, USSC shall thereafter
have the right and option to obtain Rights with respect to such Enhanced Product
in accordance with Section 2(c)(iii) below. In such event, VITEX may proceed
with further research and development of such Enhanced Product, provided that it
shall periodically advise USSC in reasonable detail of all developments and test
results regarding such Enhanced Product and all business plans which VITEX may
develop or have developed with respect to such Enhanced Product. If USSC has not
exercised its option under Section 2(c)(i) above with respect to an Enhanced
Product, VITEX may thereafter enter into a research and development program for
such Enhanced Product with another Person (each an "Alternative Enhanced Product
Transaction"), provided that the terms agreed upon with a third Person shall not
be more favorable or superior to such third Person than were last offered to
USSC in writing.
(iii) If USSC has not exercised its option under Section 2(c)(i) above
with respect to an Enhanced Product unless and until VITEX enters into an
Alternative Enhanced Product Transaction, USSC shall continue to have the right
at its option to obtain Rights with respect to such Enhanced Product on notice
to VITEX provided USSC agrees to reimburse VITEX for (aa) *********************
of VITEX's documented direct research and development costs (i.e. *************
********************************************************************) for such
Enhanced Product occurring after the date of this Agreement and prior to the
exercise of such option, plus (bb) ********************* of VITEX's documented
and agreed upon direct research and development costs (i.e. *******************
**************************************************************) for such
Enhanced Product occurring after the date such option is exercised and prior to
the design and submission for regulatory approval of Phase III clinical trials,
plus (cc) in the event Phase III clinical trials for such Enhanced Product have
commenced then ************************** of the cost of Phase III clinical
trials for such Enhanced Product incurred prior to or after the date of exercise
of such option. The parties understand and agree that such USSC commitments
shall be subject, in each case, to termination by USSC at any
-10-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
time thereafter on thirty (30) days notice. The control, direction and costs of
Phase III clinical trials of such Enhanced Products which are subject to USSC's
Rights under this Agreement shall be subject to Section 6 below in this
Agreement. In the event (i) USSC gives VITEX notice of termination of its
commitments and funding with respect to an Enhanced Product under this Section
2(c)(iii) and VITEX thereafter develops such Enhanced Product and/or transfers
any right, title or interest therein either prior to or during commercialization
including, without limitation, in the form of license rights or distribution
rights, then, in any such event, VITEX shall repay to USSC from the proceeds,
income or other consideration received by VITEX therefrom ******************* of
the amount of the funding theretofore provided by USSC to VITEX in connection
with such Enhanced Product.
(iv) VITEX shall maintain books and records in reasonable detail
concerning the research and development costs reimbursable under this Section
2(c). USSC shall have the right to inspect and copy such books and records once
each calendar year during normal business hours and with prior notice.
(v) Upon exercise by USSC of its option under Section 2(c)(i) or
(iii) above, such Enhanced Product shall be considered a Product hereunder,
except as otherwise expressly stated in this Agreement.
(d) New Products and New Applications:
(i) If during the Term, VITEX or any of its Affiliates conceives,
develops or obtains any rights, title or interest in a New Product or New
Application, VITEX shall (i) furnish full written details thereof to USSC, (ii)
provide to USSC any prototype thereof in VITEX's possession or control, and
(iii) provide USSC a detailed research and development plan including proposals
for research personnel, budgets and time frames for the development of such New
Product or New Application. USSC shall have a period of *****************
thereafter (the "Exclusive Evaluation Period") to exclusively evaluate and
determine whether or not USSC wishes to obtain Rights in respect thereof. During
the Exclusive Evaluation Period, VITEX shall answer USSC questions concerning
the New Product or Application, shall promptly forward to USSC any additional
Technology or prototypes related to such New Product or New Application that it
may conceive, develop or come into possession or control of during the Exclusive
Evaluation Period. If USSC determines in its discretion to seek Rights
-11-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
with respect to the New Product or New Application and USSC notifies VITEX with
respect thereto no later than three (3) days after the expiration of the
Exclusive Evaluation Period then, in such event, VITEX shall negotiate
exclusively with USSC and in good faith during the following ***************
(the "Exclusive Negotiation Period") for a commercially reasonable agreement
with respect to such New Product or New Application. If USSC and VITEX reach an
agreement during the Exclusive Negotiation Period with respect to a New Product
or New Application, then the parties shall promptly reduce such agreement to
writing. If USSC (i) determines in its discretion not to obtain rights with
respect to such New Product or New Application and notifies VITEX of such
determination during either the Exclusive Evaluation Period or the Exclusive
Negotiation Period, as the case may be, or (ii) fails to notify VITEX as to
whether or not USSC desires to obtain rights with respect to such New Product or
New Application no later than three (3) days after the expiration of the
Evaluation Period, or (iii) the parties are unable to reach a commercially
reasonable agreement during the Exclusive Negotiation Period then, in any such
event, VITEX shall be free to sell or transfer to a third Person in its
discretion all of its rights, title and interest in and to such New Product or
New Product Application *************************************, provided that the
terms agreed upon with a third Person shall not be, more favorable or superior
to such third Person than were last offered to USSC in writing.
(ii) Without limiting Section 2(d)(i) above, the parties specifically
agree to the following with respect to a New Product consisting of an Applicator
Product: The Exclusive Negotiation Period shall commence following the Effective
Date after USSC has received a copy of all intellectual property information and
data concerning the Applicator Product together with any prototype which VITEX
may have in its possession or control; the parties shall negotiate exclusively
and in good faith for the grant to USSC of a worldwide exclusive license to
make, use and sell Applicator Products in the Field with Products, Improved
Products, Enhanced Products and New Products manufactured by, or licensed to
USSC from VITEX. Notwithstanding the foregoing, the parties have agreed that the
consideration for such license and rights shall be without a license fee but for
a periodic royalty on net sales not less than ****************** and not more
than *****************, the exact royalty percentage to be part of such
negotiations.
(e) VITEX shall not, directly or indirectly, (i) grant to any third
Person any rights in violation or otherwise inconsistent with the Rights; (ii)
market, distribute or sell any Product
-12-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
in violation of the Rights, or (iii) knowingly grant or assist any of its
distributors outside of the Field or other third Person the right to market,
distribute or sell any Products in the Field. VITEX shall (i) promptly advise
USSC in each instance in which it becomes aware of marketing, distribution or
sale of any Products in the Field by a distributor of VITEX Products outside of
the Field or other third Person, and shall provide USSC the details thereof to
the extent and as they become known to VITEX or its Affiliates; and (ii)
exercise its contract rights, if any, and the legal and equitable remedies
reasonably available to VITEX to enforce the exclusivity and other Rights of
USSC under this Agreement. Notwithstanding the foregoing, USSC shall have the
right at its option to enforce the Rights against any third Person including,
without limitation, by bringing a claim or Action in the name of VITEX. If USSC
chooses to exercise its option to enforce its Rights, VITEX shall (i) take no
action which would have the effect of hindering, delaying or otherwise impairing
or interfering with USSC's enforcement efforts and shall, at USSC's request,
discontinue any claim or Action which VITEX shall have previously commenced or
maintained against a third Person to enforce the exclusivity and other Rights
granted to USSC under this Agreement; (ii) assist USSC in connection with USSC's
enforcement efforts in respect of its Rights and USSC shall reimburse VITEX for
VITEX's out of pocket expenses, other than attorneys fees and expenses, in
connection with such assistance; and (iii) USSC shall bear the expense of such
enforcement efforts in respect of its Rights and USSC shall be entitled to the
recovery, if any, resulting from such enforcement efforts. No settlement,
consent judgment or other final disposition of such claim or Action shall be
made on any terms which adversely affects the Rights without the consent of
VITEX, which consent will not be unreasonably withheld.
3. CONVERSION TO NON EXCLUSIVE RIGHTS; JAPAN AND EUROPE SOURCING.
(a) The Rights granted to USSC under this Agreement shall be
converted to non exclusive upon thirty (30) days notice given by VITEX to USSC
if USSC shall fail to achieve the Exclusivity Minimum Sales during the relevant
period other than as a result of: *********************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
*******************
-13-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
*******************************************************************************
**************. Notwithstanding, any conversion of Rights in accordance with
this Section 3(a) shall not be deemed a breach of this Agreement by USSC or
otherwise limit or diminish the rights of USSC under or arising out of this
Agreement.
(b) In the event of any conversion of Rights to nonexclusive as
provided in Section 3(a) above, VITEX and third Persons authorized by VITEX to
market, distribute and sell Products shall have the right in their discretion to
use the Governmental Approvals of USSC, its Affiliates and permitted assignees
to import, market, distribute and sell Products, to the extent permitted by
applicable Law, until VITEX or such third Persons obtain separate Governmental
Approvals, provided that (i) VITEX or such third Persons shall apply for and
undertake in good faith to obtain separate Governmental Approvals as promptly as
reasonably possible, and *******************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
**************************************************************************. In
connection with such separate applications, (i) VITEX and such Third Persons
shall be entitled to utilize the same clinical data and other information which
USSC, its Affiliates and permitted assignees submitted in connection with their
applications for Governmental approvals, and (ii) USSC shall provide reasonable
cooperation with VITEX in connection with such separate applications for
Governmental Approvals, provided that VITEX shall reimburse USSC for its out of
pocket costs, other than attorneys fees and expenses, in connection with such
cooperation.
(c) If at any time during the Term, Japanese Governmental Bodies or
European Governmental Bodies require the production of Japanese or European
plasma sourced Products, as the case may be, or if the parties otherwise
mutually agree that such Japanese or European sourcing would be commercially
desirable, VITEX shall have the right to obtain a producer of Products in Japan
or in Europe (each a "Regional Producer") who is willing and able to produce
Japanese or European plasma sourced Products, as the case may be, (hereinafter
collectively, "Region Sourced Products"). VITEX shall notify USSC (if USSC is
-14-
not already aware) if VITEX becomes aware of any such requirements and shall
keep USSC advised of all developments and information VITEX obtains concerning
any prospective Regional Producer. If in such circumstances VITEX secures a
Regional Producer then VITEX may provide such Regional Producer manufacturing
and production rights and licenses to permit such Regional Producer to produce
Region Sourced Products for sale to VITEX for resale in the Field exclusively to
USSC, its Affiliates and permitted assignees, provided (i) the manufacturing
related obligations of VITEX in Section 8 of this Agreement shall be made
binding upon each Regional Producer and USSC shall be accorded third party
beneficiary rights with respect thereof; (ii) VITEX shall provide USSC a copy of
the manufacturing agreement between VITEX and any Regional Producer; (iii) each
Regional Producer shall manufacture Products meeting specifications and quality
control standards no less stringent than those applicable to production
standards under applicable U.S. Laws, and (iv) nothing in this Section 3(c)
shall be deemed to permit VITEX to grant any marketing, distribution or sales
rights in Japan or Europe without USSC's written approval in USSC's sole and
absolute discretion except under the circumstances described in Section 3(a) and
(b).
(d) The parties shall enter into arrangements regarding title,
delivery and similar matters with respect to such permitted alternative sourcing
of Product to avoid, to the greatest extent reasonable possible, duplicative
taxation of Products and refilings for Governmental Approvals.
4. TERM.
(a) Unless earlier terminated in accordance with the terms and
provisions of this Agreement, the term of this Agreement (the "Term") shall be
fifteen (15) years, commencing on the Effective Date of this Agreement (defined
below).
5. EXCLUSIVITY DISTRIBUTORSHIP FEE: CAPACITY EVENT LICENSE ROYALTY
(a) In consideration of the grant to USSC of the Rights and the other
rights under this Agreement, USSC shall pay VITEX (i) an exclusivity
distributorship fee (the "Exclusivity Distributorship Fee") in the sum of Three
Million Dollars ($3,000,000) in immediately available funds within three (3)
business days of the Effective Date of this Agreement.
-15-
(b) In the event a Capacity Event License is granted under Section 8(h),
USSC shall deliver quarterly written reports to VITEX for each three (3) month
period ending on the last days of the months of March, June, September and
December of each year, within forty-five (45) days after the end of each such
period. The report shall set forth the Net Sales of Products which are
manufactured under the Capacity Event License and sold by USSC, its Affiliates
and permitted assignees during the immediately preceding calendar quarter and
the amount of the Capacity Event Royalty payable to VITEX. All information
contained in such quarterly reports shall be treated as USSC's Confidential
Information. Simultaneously with the submission of each report, USSC shall pay
to VITEX by check or bank transfer the amount of Capacity Event Royalties due to
VITEX for the report period under the terms of this Agreement. USSC shall
maintain records in sufficient detail and, upon reasonable notice, allow any
independent certified public accounting firm of nationally recognized standing,
appointed by VITEX to examine its consolidated books and records. Such
examinations shall occur on or after February 15 of any calendar year (or, if
VITEX appoints for purposes of such examination the accounting firm employed by
USSC to conduct its regular annual audit, prior to February 15,) only during
normal business hours and not more than once a year, and shall be solely for the
purpose of verifying the calculation of Capacity Event Royalties due under this
Agreement. A final such examination may occur once during the year immediately
succeeding termination of this Agreement. In the event VITEX appoints for the
purpose of examining USSC's consolidated books and records the accounting firm
employed by USSC to conduct its regular annual audit, and if the examination
provided for herein is performed at substantially the same time as such regular
annual audit, the fees and expenses of the accounting firm performing the
examination shall be borne by USSC. In any other event, the fees and expenses of
the accounting firm performing the examination shall be borne by VITEX. Unless
written objection is made by VITEX and delivered to USSC within thirty (30) days
after completion of such examinations, the calculation of Royalties paid by USSC
prior to the date of such examination shall be final and binding on the Parties,
except insofar as adjusted or corrected as a result of USSC's regular annual
audit. It is understood that USSC shall not be required to furnish or permit the
examination of the identities, at any time, of customers or other information as
to specific sales. Any information provided to VITEX or its accountants pursuant
hereto shall be treated as USSC's Confidential Information.
6. REGULATORY APPROVALS.
--------------------
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["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
(a) Following the Effective Date of this Agreement and except as otherwise
provided in this Section 6, USSC shall have sole and complete discretion and
control, and shall bear all Regulatory Costs for the marketing, distribution and
sale of the Product in the Territory by USSC, its Affiliates and permitted
assignees. Notwithstanding the foregoing, **************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
******************************************************. Without limiting the
foregoing, in the event of a dispute between VITEX and USSC during the course of
VITEX managing a U.S. clinical trial, the parties shall discuss and seek to
resolve such dispute but USSC shall have final authority with respect to such
matter in dispute. VITEX shall maintain books and records in reasonable detail
concerning the clinical management costs reimbursable under this Section 6(a).
USSC shall have the right to inspect and copy such books and records during
normal business hours and with prior notice.
(b) Promptly following the Effective Date of this Agreement, VITEX shall
deliver to USSC a copy of all test results, documentation, information and data
in the possession or control of VITEX or its Affiliates involving or relating to
the Existing Trial. During the term of this Agreement, VITEX shall (i) make
available to USSC a copy of all test results, documentation, information and
data involving or relating to the Existing Trial when any of the same becomes
available to VITEX or its Affiliates, and (ii) promptly advise USSC of all
communications from any Governmental Body with respect to the Existing Trial.
(c) All documentation, information and data supplied by VITEX or its
Affiliates or third Persons hired or employed by VITEX and included in USSC's
filings for Governmental Approvals shall contain accurate and complete test
results, data and information. Upon USSC's request from time to time during the
term of this Agreement, VITEX shall reasonably cooperate and consult with and
assist USSC in connection with USSC regulatory interaction involving the
Products, other than the management of U.S. clinicals discussed in Section 6(a)
above. Such cooperation, consultation and assistance shall be given by VITEX
without charge, except that USSC shall pay VITEX's documented and reasonable out
of pocket costs (other than attorneys fees and expenses) incurred in connection
therewith, provided same shall in each
-17-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
instance be approved by USSC in advance and appropriate documentation thereof
submitted to USSC in connection with requests by VITEX for payment of such
costs.
(d) All material communications from Governmental Bodies relating to the
marketing, distribution or sale of a Product will be shared by USSC with VITEX.
A copy of all proposed filings with Governmental Bodies relating to the
marketing, distribution or sale of a Product shall be sent to VITEX in advance
of the filing thereof with as much notice as is reasonably possible, in order
for VITEX to provide its comments with respect to the proposed filing.
(e) Each Governmental Approval for the marketing, distribution and sale of
a Product obtained hereunder shall be in the name of USSC, a designated
Affiliate of USSC or a USSC distributor, except if and insofar as a country's
Laws only allow ownership in the name of the manufacturer.
(f) Promptly following the Effective Date of this Agreement by both
parties, the parties shall establish a committee (the "Clinical Trial
Committee"). The Committee shall be composed of one individual designated by
VITEX and one individual designated by USSC. The Clinical Trial Committee shall
meet no less frequently than quarterly to discuss and communicate with respect
to clinical trials for Products, to provide advice and recommendations to VITEX
and USSC in connection with their responsibilities for clinical trials under
this Agreement, and for USSC to advise VITEX concerning the progress of USSC in
obtaining Governmental Approvals for Products.
(g) VITEX shall provide quantities of Product to USSC for research and
development and for clinical trials without charge. VITEX shall also provide
other assistance to USSC in connection with USSC's conduct of clinical trials,
provided that USSC shall reimburse VITEX for its documented and reasonable out
of pocket costs (other than attorneys fees and expenses) in connection with such
requested assistance, provided same shall in each instance be approved by USSC
in advance.
(h) *********************************************************************
*******************************************************************************
*******************************************************************************
********.
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["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
Notwithstanding, the foregoing, the Parties acknowledge that there are numerous
complexities and uncertainties involved with obtaining Governmental Approvals
for a new product, especially a blood product. The Parties understand and agree
that reasonable people can differ as to the appropriate strategy, approach or
individual decision with respect to obtaining Governmental Approvals and that
there can be no assurance that USSC will be able to obtain any of the
Governmental Approvals or, if obtained, such Governmental Approvals will be
obtained in a timely fashion designed to commercialize the Products. ***********
********************************************************************************
********************************************************************************
********************************************************: (V) any act or
omission of USSC or its Affiliates in good faith to obtain such Governmental
Approval; (W) any act or omission of a CRO or other third Person hired or
engaged by, or contracted with, USSC, its Affiliate or by a CRO; (X) any act or
omission of a Governmental Body; (Y) an act or omission of VITEX or any VITEX
Affiliate, any source of a Product or any of its components (e.g. fibrin,
thrombin, or reconstitution solution) thereof (including, without limitation,
NYBC), manufacturers, vendors or other third Persons hired or engaged by, or
contracted with, any of them in connection with the execution of VITEX's rights
and obligations under or arising out of this Agreement, or (Z) Force Majeure,
provided that, in any of such events, USSC shall *******************************
******* to overcome the denial or delay, subject to the foregoing exceptions.
********************************************************************************
****************************** in accordance with this Section 6(h) shall not be
deemed a breach of this Agreement by USSC or otherwise limit or diminish the
rights of USSC under or arising out of this Agreement except that, in such
event, USSC's Rights under this Agreement shall thereafter during the remainder
of the term of this Agreement become nonexclusive only in such portion of the
Territory (i.e. in the case of Europe, USSC's Rights shall become nonexclusive
solely in the Major Country in which such **************************************
**********************************************************.
7. CONFIDENTIALITY.
---------------
(a) Subject to Section 7(b) below, the term "Confidential Information"
shall mean, unless specified in writing to the contrary, any proprietary
information or material regarding the business or affairs of VITEX or USSC
including, without limitation, Technology, research,
-19-
development, products, employee lists, vendor lists, and customer lists and
marketing and sales information, as well as the terms and conditions of this
Agreement. Subject to the provisions of subparagraph (c) below, any and all
Confidential Information given by either party to the other under this Agreement
shall not be disclosed to any third Person and shall not be used for purposes
other than the fulfillment of obligations under this Agreement.
(b) The following information shall not be considered Confidential
Information and is excluded from the provisions of subparagraph (a) above:
(i) information which, at the time of disclosure, is in the public
domain;
(ii) information which, after disclosure, becomes part of the public
domain by publication or otherwise, except by breach of this Agreement;
(iii) information which a party can establish by written proof was in
its possession at the time of disclosure and was not acquired, directly or
indirectly, from the other party or acquired from any third party subject to any
obligation of confidentiality to the disclosing party; or
(iv) information which is required by Law to be disclosed, provided
that such disclosure is subject to all applicable governmental or judicial
protection available for like material and the party relying on this exception
notifies the other party in writing in advance of such intended disclosure,
promptly after the notifying party becomes aware of the disclosure requirement.
(c) The parties agree to disclose or make available any Confidential
Information received under this Agreement only to those of their employees,
agents, consultants, sublicensee, vendors and suppliers to whom it shall be
reasonably necessary in order to facilitate the performance of their respective
obligations or the exercise of their respective rights hereunder and only after
they have undertaken to comply with all of the confidentiality obligations
hereunder. Each party to this Agreement agrees to be responsible for, and to
indemnify the other against, any breaches of the aforementioned confidentiality
obligations by any of its employees, agents, consultants, sublicensees, vendors
and suppliers.
-20-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
(d) The provisions of this Section 7 shall survive the expiration or
termination of this Agreement for a period of ***************.
8. SUPPLY OF PRODUCTS.
------------------
(a) Subject to the terms of this Agreement and during the Term, VITEX
shall supply USSC's requirements of Products, subject to the terms and
conditions of this Section 8.
(b) VITEX shall diligently qualify and register or cause to be qualified
and registered with all applicable Governmental Bodies all production facilities
used to manufacture and produce the Products, so as to permit the supply of
Products in a timely manner under this Agreement. VITEX shall provide quarterly
reports to USSC of its progress in establishing, qualifying and registering such
production facilities and will permit USSC and its representatives to inspect,
at its cost and expense, at any time during normal business hours and upon
reasonable prior notice.
(c)
(i) Promptly following the Effective Date of this Agreement, USSC shall
provide to VITEX a non-binding ************* forecast for Products. Such non-
binding forecast shall be updated and presented to VITEX annually throughout the
Term. The purpose of this forecast is to assist VITEX in its production planning
and to facilitate its ability to supply USSC requirements of Products but USSC
shall bear no liability for the accuracy or completeness thereof or be bound to
purchase Products in accordance with such non-binding forecast. VITEX shall
treat such non-binding forecast as USSC Confidential Information and may not
share it with any third party.
(ii) On or before twelve (12) months prior to the anticipated date of the
first Governmental Approval for the marketing, distribution or sale of a
Product, the parties will meet to discuss inventory requirements for the launch
of such Product following such Governmental Approval.
-21-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
(iii) Beginning with the first calendar quarter which is at least six
(6) months prior to the anticipated date of obtaining the first Governmental
Approval for the marketing, distribution or sale of a Product, and fifteen days
(15) prior to the beginning of each calendar quarter thereafter, USSC shall
furnish VITEX a rolling forecast (the "Forecast") of its semiannual delivery
requirements of Products for the immediately succeeding ************************
********************************************************************************
********************************************************************************
********. Binding forecasts for the ******************* following commercial
sale of a Product which exceed by ************************** the most recent
non-binding Forecast for the same period, and binding forecasts subsequent to
the ******************* following commercial sale of a Product which exceed by
******************* the most recent non-binding Forecast for the same period,
shall not trigger a Capacity Event as described below. Exhibit F attached hereto
shall serve to further reflect the parties agreement in this respect.
(d) USSC purchase orders shall be in writing and shall specify the
quantities and sizes of Products, the delivery destination within the Territory
and such other terms of sale not covered by this Agreement. Each purchase order
shall represent a firm commitment by USSC to purchase the specified quantity of
Products. VITEX may reject USSC's purchase order within ten (10) days after its
receipt, if the purchase order fails to comply with the requirements of this
Section 8 or in the event any of the other proposed terms of sale set forth in
the USSC purchase order which are not covered by this Agreement are not
acceptable to VITEX. If the purchase order complies with the requirements of
this Section 8, it shall be acknowledged and accepted promptly in writing by
VITEX. In the event of any discrepancy between a purchase order and this
Agreement, the terms of this Agreement shall govern.
(e) Products shall be labeled, sterilized and individually packed for
shipment and storage in accordance with specifications, including temperature
specifications, as mutually agreed upon and in accordance with applicable Laws.
All Products shall be identified by individual Product and batch numbers.
Products delivered by VITEX to USSC shall not include an applicator. USSC
presently expects to include applicator(s) in a package or kit incorporating the
packaged Product received from VITEX. The parties will discuss any alternative
product configurations, such as bulk fibrin, thrombin or reconstitution
solution, or if the parties desire to include an applicator in the packaged
Product received from VITEX.
-22-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
(f) VITEX shall prepare, obtain, and transmit to USSC such documents as
shall be required for USSC or its nominee to take over customs clearance and to
satisfy other import formalities into the Territory and export formalities, if
any.
(g) Upon loading the Products on board carrier at the dock of VITEX's
manufacturing plant and facilities, title to the Products and all risk of loss
or damage thereto shall pass to and be borne by USSC.
(h) VITEX covenants and agrees to have sufficient equipment or facilities
to provide manufacturing capacity for Products which USSC, its Affiliates and
permitted assignees order from VITEX.
VITEX shall use reasonable efforts to meet any requirements of USSC that
exceed a Forecast. USSC agrees that the nonbinding portions of its Forecasts
shall be made by USSC in good faith so that VITEX may provide sufficient
capacity for Products which USSC, its Affiliates and permitted assignees order
from VITEX, provided, however, that USSC shall have no liability for the
accuracy and completeness of such Forecasts and shall have no obligation to
order any Product in the nonbinding portion of a Forecast.
If at any time during the Term VITEX is unwilling or unable to supply
Products pursuant to USSC purchase orders for **************** or more (even if
due to Force Majeure) but not in the event such Purchase Orders exceed by twenty
five percent (25%) or more of the most recent binding Forecast, (each a
"Capacity Event") then, in such event, but only for so long as such condition
continues but for a period of not less than one (1) year ("Capacity Event
Period"), USSC shall be deemed to have satisfied its Exclusivity Minimum Sales
for the Capacity Event Period and USSC shall have the right in its discretion to
require VITEX on written notice to (i) transfer to USSC the data and information
necessary to manufacture or have a third party manufacture Products during the
Capacity Event Period, and (ii) grant to USSC a fully paid up option and right
to obtain an exclusive, worldwide license and right, with the right to
sublicense, during the Capacity Event Period to manufacture and produce Products
for sales by USSC or its Affiliates and permitted assignees under the Patents
and Technology (the "Capacity Event License"). In such event, VITEX shall
provide assistance to USSC to effect the aforesaid transfer provided USSC shall
pay to VITEX its out of pocket costs (excluding attorney fees and expenses)
-23-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
During any Capacity Event Period, USSC shall continue to purchase Product
from VITEX on the terms and conditions of this Agreement to the extent VITEX is
willing and able to supply Products to USSC in accordance with the terms and
conditions of this Agreement.
The Capacity Event License shall be exercisable by USSC upon notice thereof
given to VITEX without the need for execution of any further documentation,
except that for good order's sake the Parties shall execute a document
evidencing the effectiveness of the Capacity Event License. As full and complete
consideration for the Capacity Event License, USSC shall pay to VITEX a periodic
royalty (the "Capacity Event Royalty") (i) during the ******************* of the
Capacity Event Period equal to (x) ****************** on all Net Sales of
Products manufactured under the Capacity Event License by USSC or its third
party manufacturers, reduced by (y) the amount of any additional out of pocket
costs and expenses (e.g. higher per unit prices by a third party supplier) which
USSC may incur in connection with obtaining an alternative supply of Products,
provided that the Capacity Event Royalty shall in any such event be no less than
**************** on all such Net Sales, and (ii) during the term of this
Agreement subsequent to the ******************* of the Capacity Event Period,
the Capacity Event Royalty shall be equal to (x) ***************** on all Net
Sales of Products manufactured under the Capacity Event License by USSC or its
third party manufacturers, reduced by (y) the amount of any additional out of
pocket costs and expenses (e.g.. higher per unit prices by a third party
supplier) which USSC may incur in connection with obtaining an alternative
supply of Products, provided that the Capacity Event Royalty shall in any such
event be no less than ********************************* on all such Net Sales.
The recordkeeping and audit provisions set forth in Section 5(b) shall
apply to the Capacity Event License. USSC shall have the right at its discretion
to terminate the Capacity Event License at any time upon notice to VITEX but
without any termination or other fee being due by USSC to VITEX in connection
with such termination.
(i) If the Rights are converted to non exclusive in accordance with this
Agreement, VITEX shall (i) offer prices and terms of sale for Products to USSC,
its Affiliates and permitted assignees which shall be VITEX's lowest prices and
best terms considering (aa) the price and terms set forth in this Agreement, and
(bb) the prices and best terms on which VITEX has sold and agrees to sell
Products to any third Person for comparable quantities, and (ii) allocate its
production of Products and production of Products for VITEX by third Person
between (aa) its sales to USSC, its Affiliates
-24-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
and permitted assignees, and (bb) its sales or transfers to third Persons, in a
proportion that is at least as favorable to USSC, its Affiliates and permitted
assignees as the ratio that the Products set forth in the Forecasts bears to the
number of Products set forth in VITEX's bona fide, good faith sales forecasts
for sales by VITEX, its Affiliates and third Persons.
(j) Notwithstanding anything set forth in this Section 8 to the contrary,
VITEX shall require thirty six (36) months of notice by USSC prior to providing
USSC with the first shipment of Product for veterinary applications.
9. PRICE AND TERMS OF SALE.
-----------------------
(a) Prices for Products shall be as follows:
(i) Except as provided in Sections 9(a)(ii), 9(a)(iii) and 9(a)(iv)
below, the purchase price for a Product, ** ******* ******* **********
************* ******** shall be ******** multiplied by the
****** ** ** ** ********** ******* ********* ** *** ******* (the Purchase
Price").
(ii) The purchase price for a Product, Ex Factory VITEX's or third
Person's Japanese manufacturing facility, for resale in Japan, may be higher
than the Purchase Price but only if and to the extent that regulatory and
commercial considerations require the manufacture of Japanese sourced Product in
Japan for the Japanese market, and in no event shall the purchase price exceed
******** mutiplied by *** ****** ** ** ** ********** ******* contained in the
Product (the "Maximum Japanese Price"), provided that if Japanese sourced
Product is (aa) required by Japanese Governmental Bodies, or if the parties have
mutually agreed that Japanese sourced Product is commercially desirable, and
(bb) is not commercially available in Japan for the Maximum Japanese Price,
then, in such event, the parties will discuss such situation and seek out a
mutually acceptable resolution, but in such event VITEX shall not be required to
sell to USSC at the Maximum Japanese Price a Product for resale in Japan, and
USSC shall not be required to purchase for resale in Japan a Product from VITEX
or a Japanese producer at a price in excess of the Maximum Japanese Price.
(iii) Subsequent to the ***** *** ******** ***** following the first
Governmental Approval to market, distribute and sell a Product in the United
States, Japan or a Major
-25-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
Country in Europe (i.e.. ******* ****** ** *** ****** ******* ***** **** *
***** ******* ********), if a "Price Increase Event" (defined below) has
occurred with respect to such year, the purchase price for a Product shall be
increased by ******** multiplied by *** ****** ** ** ** **********
******* contained in the Product. For purposes of this Section 9(a)(iii), a
Price Increase Event shall be deemed to have occurred if the sale of Products by
USSC, its Affiliates and permitted assignees in such calendar year or thereafter
following Governmental Approval are less than a "Price Increase Level", as
defined hereinafter, for such year, unless due to (W) any act or omission of a
Governmental Body, (X) any act or omission of VITEX or a VITEX Affiliate, (Y)
any act or omission of a supplier of a Product, or any components (e.g. fibrin,
thrombin, or reconstitution solution) thereof (including, without limitation,
NYBC), manufacturers, vendors or other third Persons hired or engaged by, or
contracted with, any of them in connection with the execution of VITEX's rights
and obligations under or arising out of this Agreement, or (Z) Force Majeure.
The "Price Increase Level" shall be *** ******* *** ***** ******* ****** ** ***
*********** ******* ***** *** **** ****, as the case may be. Upon a mutual
determination by the parties that a Price Increase Event for such year has
occurred, VITEX will invoice USSC for the additional amounts owed to it for
Products sold to USSC since the beginning of such year, which invoice shall be
paid within forty five (45) days of receipt unless disputed by USSC in good
faith.
(iv) Notwithstanding any other provision of this Agreement, the Purchase
Price shall be fixed for the ***** *** *** ***** following Governmental Approval
to Market distribute and sell a Product in the United States, Japan or a Major
Country in Europe (i.e. ******* ****** ** *** ****** ******* ***** **** * *****
******* *********). Subsequent to the ***** *** *** ***** following Governmental
Approval, the Purchase Price shall be subject to increase or reduction through
negotiation by the parties in good faith on an annual basis taking into
consideration conditions in the marketplace including, without limitation,
competitive products, as well as distributor margins, manufacturing costs and
efficiencies and other increases and decreases, if any, otherwise provided for
in this Section 9. Notwithstanding, any determination to change the Purchase
Price shall not consider increases in manufacturing costs unless and to the
extent such costs (calculated in accordance with GAAP consistently applied) for
any twelve (12) month period have increased by ******** or more above the
manufacturing costs for the Product (calculated in the same manner) measured for
the twelve (12) month period commencing when the Product is first commercially
sold under this Agreement in the United States, Japan or a Major Country in
Europe (i.e. ******* ****** **
-26-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
*** ****** ******* ***** **** * ***** ******* *********). In the event VITEX
desires to propose to USSC an increase in the Purchase Price based, in whole or
in part, on an increase in VITEX's manufacturing costs, VITEX shall at its
expense appoint an independent certified public accounting firm of nationally
recognized standing to examine VITEX's books and records and confirm to VITEX
and USSC the manufacturing cost figures calculated in accordance with this
Section 9(a)(iv). Such report shall be provided to USSC in connection with any
such VITEX request for an increase in the Purchase Price based, in whole or in
part, on increases in VITEX's manufacturing costs. Such manufacturing cost
information shall be treated as VITEX's Confidential Information.
(b) Prices for Improved Products: The parties shall in good faith discuss
and seek to reach a mutually satisfactory agreement with respect to the
appropriate price for each Improved Product giving due consideration for pricing
of similar or competitive products and other market related considerations.
Prices for Improved Products shall be subject to increase or reduction to the
same extent as provided in this Agreement for Products.
(c) All dollar amounts stated in this Agreement are expressed in U.S.
dollars, and all payments to be made to any party hereunder are to be made in
legal currency of the United States and shall be subject to any withholding
requirements under applicable Law. All payments to be made under this Agreement
shall be paid by wire transfer in immediately available funds, to such account
as the receiving party shall have designated from time to time in writing to the
other party.
(d) VITEX covenants and agrees that at the time of sale or transfer of a
Product to USSC, its Affiliates and permitted assignees, it shall have, transfer
and convey good and marketable title to the Product free and clear of all Liens.
(e) VITEX will notify USSC in writing no later than ten (10) business days
prior to completion of QC release testing of all Products to be available for
delivery. USSC will arrange for the pickup and shipping of such Products within
fifteen (15) business days of such availability. In the event that such
arrangements are not timely made or in the event of any other delay in delivery
not attributable to VITEX, VITEX shall store the Products at USSC expense upon
commercially reasonable terms and conditions to be agreed by VITEX and
-27-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
USSC. If storage is not available at the VITEX facility, USSC shall make its
owns arrangements for storage at alternative FDA approved locations and for
transportation thereof.
(f) The purchase price for Product purchased pursuant to USSC's purchase
orders shall be paid by USSC to VITEX within ******** from the date VITEX has
made the Product available to USSC at VITEX's Melville, Long Island facility in
accordance with USSC's purchase order (unless the parties make mutually
acceptable alternative arrangements) provided USSC has received a complete
invoice related thereto and USSC has not rejected the Product in accordance with
Section 10 below. The invoice date may coincide with but shall not be earlier
than the date on which VITEX has made the Product available to USSC at VITEX's
facility.
(g) All Products will be delivered by *****, ****** *** ********, *** ****
******* ****.
10. WARRANTIES; LIMITATION OF LIABILITY; REJECTION OF PRODUCT.
---------------------------------------------------------
(a) VITEX represents and warrants that the Products to be sold to USSC
under this Agreement shall not be adulterated or misbranded at the time of
delivery within the meaning of the Act, shall meet VITEX's standard
specifications for the Products, and shall be free of defects in material and
workmanship. VITEX shall document from time to time, and provide USSC with, such
specifications in reasonably complete detail. THIS WARRANTY IS IN LIEU OF ALL
OTHER WARRANTIES, EXPRESS, STATUTORY OR IMPLIED, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
(b) EACH PARTY'S LIABILITY UNDER OR ARISING OUT OF THIS AGREEMENT SHALL BE
LIMITED TO ACTUAL DAMAGES. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR
INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES SUFFERED BY THE PARTIES OR ANY
OTHERS RESULTING FROM THE USE OF THE PRODUCT.
-28-
(c) USSC may reject any shipment or partial shipment from VITEX that does
not meet VITEX's representations and warranties as set forth in this Section 10,
upon notice to VITEX delivered within forty five (45) days after receipt by USSC
of such shipment or, in the case of any latent defect, after USSC discovered or
had a reasonable basis for discovering such defect. Any shipment of Products
that are not rejected by USSC within such period shall be deemed accepted. In no
event shall VITEX be liable for any nonconformity of the Products resulting from
the shipment, storage or handling of such Products after delivery by VITEX in
accordance with Section 8 above, or the tampering, alteration or mishandling of
the Product by any person (including any customer of USSC) following such
delivery.
(d) Upon the request of VITEX, USSC shall furnish evidence of
nonconformity of the shipment of Product. If VITEX confirms the nonconformity,
VITEX will use diligent efforts to promptly replace the Product at no additional
charge to USSC with a conforming shipment and issue a credit to USSC for any
costs and expenses incurred by USSC in shipping the rejected Product to USSC.
11. INDEMNIFICATION.
---------------
(a) VITEX shall indemnify, defend and hold harmless USSC and its
Affiliates, employees, officers, directors and agents (each, a "USSC Indemnified
Party") from and against any and all liability, loss, damage, cost and expense
(including reasonable attorneys' fees and expenses) (collectively, a
"Liability") (subject to the limitations in subparagraph (c) below) which the
USSC Indemnified Party may incur, suffer or be required to pay resulting from or
arising in connection with (i) the breach by VITEX of any representation or
warranty contained in Section 17 of this Agreement, or (ii) any negligent act or
omission of VITEX or any Affiliate thereof in the design, manufacture, handling,
transportation or storage by VITEX or its agents, or any other activity
conducted by VITEX under or arising out of this Agreement which is a proximate
cause of injury, death or property damage to a third Person.
(b) USSC shall indemnify, defend and hold harmless VITEX and its
Affiliates, employees, officers, directors and agents (each, an "VITEX
Indemnified Party") from and against any Liability (subject to the limitations
in subparagraph (c) below) which the VITEX Indemnified Party may incur, suffer
or be required to pay resulting from or arising in
-29-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
connection with (i) the breach by USSC of any representation or warranty
contained in Section 17 of this Agreement, or (ii) any negligent act or omission
of USSC (or any Affiliate thereof) in the handling, transportation, storage,
distribution, marketing and sale of the Products by USSC, its Affiliates or
permitted assignees, excluding the design and manufacture of the Product but
including manufacture of the Product under a Capacity Event License, or any
other activity conducted by USSC, its Affiliates or permitted assignees under or
arising out of this Agreement which is a proximate cause of injury, death or
property damage to a third Person.
(c) The obligations of the indemnifying party under subparagraphs (a) and
(b) above are conditioned upon the delivery of written notice to the
indemnifying party of any potential Liability promptly after the indemnified
party becomes aware of such potential Liability. The indemnifying party shall
have the right to assume the defense of any claim or Action related to the
Liability if it has assumed responsibility for the claim or Action in writing.
If the indemnifying party defends the claim or Action, the indemnified party may
participate in (but not control) the defense or settlement thereof at its sole
cost and expense.
(d) Neither party may settle a claim or action related to a Liability
without the consent of the other party if such settlement would impose any
monetary obligation on the other party or require the other party to submit to
an injunction.
(e) Commencing prior to the date of shipment of the first batch of Product
from VITEX to USSC and thereafter, during the Term, each party shall maintain
comprehensive general liability insurance, including product liability insurance
with broad form vendors coverage with insurance carriers reasonably acceptable
to the other party on a claims made basis in an amount not less than ********
combined single limit for bodily injury and property damage per occurrence and
in the aggregate. Such insurance may contain provision for a deductible or self-
insured retention not to exceed ******** of such party's stockholders' equity.
Such insurance shall include the other as an additional named insured as its
interest may appear. Prior to delivery of the first batch of a Product from
VITEX to USSC, each party shall furnish the other party with a certificate of
insurance evidencing such coverage so naming the other party as an additional
insured as its interest may appear and with thirty (30) days' written notice to
the other party of cancellation or material
-30-
change. Nothing set forth herein in this Section 11(e) is intended to substitute
for the indemnity rights of each party set forth in this Agreement.
12. VITEX MANUFACTURING OF PRODUCTS.
-------------------------------
(a) VITEX agrees to produce and manufacture Products in compliance
with Good Manufacturing Practices, applicable Laws and pursuant to current
Product specifications. In discharging its obligations hereunder, VITEX shall
obtain all applicable Governmental Approvals and observe in all material
respects all applicable Laws including, without limitation, those relating to
registration requirements for the manufacturing, assembling or supply of medical
devices and defect notification.
(b) USSC and its representatives shall have the right, but not the
obligation, to inspect the production, labeling, shipping, packaging and quality
control and sterilization facilities of VITEX as well as all records relating to
the manufacturing sites of such manufacturing party to verify compliance with
Good Manufacturing Practices and applicable Laws. Such inspections shall be
during normal business hours and with advance notice.
(c) VITEX shall notify USSC thirty (30) days prior to making, or any
third party making on VITEX's behalf, any material change in the composition or
design of the Product, in the materials used to manufacture the Product or in
the manufacturing process. In connection with any such change, VITEX shall
provide test results to USSC within seven (7) days of any such changes to assure
that the Product continues to meet safety and efficacy at least to the levels of
the prior specification. All information disclosed by VITEX to USSC pursuant to
this Section 12 shall be considered VITEX Confidential Information.
(d) VITEX shall institute and fund any recall, field corrective
action, or the like in circumstances relating to a Product defect or failure
which requires such action by a Governmental Body or as otherwise may be
required pursuant to applicable Laws, if caused by VITEX's acts or omissions.
USSC shall institute and fund any recall, field corrective action, or the like
in circumstances relating to a Product defect or failure which requires such
action by a Governmental Body or as otherwise may be required by applicable
Laws, if caused by USSC's acts or omissions. In either circumstance, the actual
retrieval of the Product sold by USSC, its
-31-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
Affiliates or permitted assignees shall be undertaken by USSC, its Affiliates or
permitted assignees, as the case may be. Both parties shall maintain adequate
records concerning traceability of Products. Each party shall provide the other
with a copy of any reported adverse experience involving a Product purchased or
sold under this Agreement. Any death, serious injury, potential for occurrence
of the same or change in the frequency or occurrence in field experiences
required to be reported by a party to this Agreement to any Governmental Body
shall be reported to the other party as promptly as possible to enable the
parties to comply with applicable Laws in a timely manner. *************** ***
***** ********* ** **** ********* ** *** ********, ** *** ***** ** *** ******,
***** ********** ******, ** *** **** ** * ******* ********* *** ****** **
******** ******* ***** *** *** ****** ** *** ******* ** * ******* ** *** *******
** *** ******** ** **************, ** **** ** **** ** ******* ** *********** **
*********, ***** ***** ****** *** ******* *** *********** ** *** **** **** ***
******* ** ******** ** ******* *****.
(e) **** ***** ****** ** *** ***** ******* ***** ** *** ******
******* ***** ** ****** ****** ********* *********, *** ** ** ***** **** ****
*** ******* ******** ******* *****,**** *** **** *****, ** ***** *** *****
****** **** ******* ********** ********** **** * ******* ******* ******** ******
********* ********. **** ********* ****** ***** **** **** ******* ** *****
********. **** ***** **** *** ***** ** ********* **** ******, *** ***** *******
**** ***** ** ********** **** **** ************. * ******* ******* ** * ******
** ****** **** ** *** *********** ** ******* *** ** ********* ** * ******
********* *** ** *** ** ** ***** ** ***** ** ****. ******* *** ***** ****** **
**** ******* ***** ** ******** ** ********** *** *** ********** ** ***** **
******* ********** ******* ** *** ********* ****** ** **** ***** *** ***** **
**** *********.
13. USSC DISTRIBUTION OF PRODUCTS.
-----------------------------
(a) VITEX shall make available to USSC, at no charge to USSC, samples
of all VITEX's sales literature, catalogues, technical manuals, specification
and data sheets and other promotional materials relating to a Product which it
may prepare or have prepared from time to time during the Term (collectively,
"VITEX Marketing Materials"). Five copies of all VITEX Marketing Materials
existing on the Effective Date of this Agreement is executed by all of the
parties hereto shall be delivered to USSC promptly following the Effective Date
of
-32-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
this Agreement. USSC shall have the right to copy, disseminate and use VITEX
Marketing Materials, in whole or excerpts, at no charge.
(b) USSC shall have unqualified discretion and control over its
Product marketing decisions and promotional materials. Without limiting the
foregoing, USSC shall have the right to prepare such sales literature and other
advertising and promotional materials as USSC determines to be necessary or
appropriate for the marketing, distribution and sale of the Products within the
Territory provided that USSC shall provide to VITEX a copy of all USSC's sales
literature and other advertising and promotional materials prepared by it or on
its behalf excluding copies of materials which contain the same claims and are
used in the same market as materials previously provided to VITEX. VITEX shall
have no liability for any claim by any third party arising out of the creation,
use or distribution by USSC of any sales literature or other advertising or
promotional materials not approved by VITEX, which approval shall not be
unreasonably delayed or denied.
14. NON COMPETE.
-----------
(a) During the Term unless and until the Rights are converted to non-
exclusive under Sections 3(a) and 3(b), VITEX and its Affiliates shall sell
Product only to USSC, and neither VITEX nor any of its Affiliates shall, except
as permitted in Sections 2(c),2(d) and 14(b) knowingly, directly or indirectly,
(i) develop, market, distribute or sell, or (ii) consult with, or otherwise
assist any third Person to develop, market, distribute or sell in the Field, any
product, alone or in any kit form, which may be competitive with a Product, in
or into any portion of the Territory in which and for so long as USSC has
exclusive Rights in such portion of the Territory under this Agreement. *******
********* ** *** ********* ***** ** ****** ** ******** ***** **** ********* ****
****** ************* ******** ***** **** ************** ** *************
******** ***** ********, ****** *****, ***** ** *** ******** ******** *****
*********** *** ** ***** ****** *********, ******** **** ***** ***** ***
********* *********** ** ******* ******** ** *** ***** ***** *** *** ** ***
*****.
(b) During the Term unless and until the Rights are converted to
nonexclusive under Section 3(a) or (b), USSC and its Affiliates shall purchase
Product only from VITEX, and neither USSC nor any of its Affiliates shall
knowingly, directly or indirectly, market or sell a
-33-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
product competitive with a Product in any portion of the Territory for so long
as USSC has exclusive rights under this Agreement with respect to such portion
of the Territory, or (ii) consult with, or otherwise assist any third Person to
develop, market, distribute or sell in the Field, any product alone or in kit
form, which may be competitive with a Product in or into any portion of the
Territory for so long as USSC has exclusive rights under this Agreement in such
portion of the Territory. *************** *** *********, **** ***** *** **
******* ** *** ********* ************ **** ******* ** *** ***********,
*********, ************ *** **** ** ****** **** **** * ******** ******
************* *********, ********* **** ** *** ********* ****** *** ***
*********** ******** ** ****, *** ********** *** ********* ********* ** *
******** **** ******* *** ********* ****** *** ***** ** ******** ** ****, ***
********** *** ********* ********* ** **** ******** ****, ****, ** **** *****,
***** ***** **** *** ***** ** ******* ****** ****** ***** **** ********* **
************ ** ********** **** ******* **** *** *** ********* **** ***
*********** ********** ******** ****. Subsequent to USSC's first commercial sale
of a Recombinant Product, USSC shall at its expense appoint an independent
certified public accounting firm of nationally recognized standing to examine
USSC's books and records and confirm to VITEX and USSC whether the net sales of
USSC, its Affiliates and permitted assignees of Recombinant Products exceeds the
net sales of USSC, its Affiliates and permitted assignees of Products. Such
information shall be retained by VITEX as USSC's Confidential Information. Such
examination shall occur on or after February 15 of any such calendar year.
15. TRADEMARKS.
----------
(a) Unless prohibited by local Law, all labeling and packaging
material for the Products and their respective components shall provide (if
applicable) that the Products are manufactured by, and sold under license from,
"V. I. Technologies, Inc." USSC shall appropriately identify, in compliance with
applicable Laws, all Products and its appropriate components with any Existing
Patent or Future Patent numbers or appropriate Existing or Future Patent legends
applicable to such component.
(b) Notwithstanding Section 15(a) above or anything else in this
Agreement to the contrary, USSC may utilize any trademark, trade name or logo in
connection with the promotion, marketing and sale of a Product which USSC in its
discretion may decide (other
-34-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
than trademarks, tradenames or logos owned by VITEX unless VITEX has given USSC
written consent to use such VITEX trademarks, tradenames or logos in connection
with USSC's marketing and sale of Products, which consent shall be in VITEX's
discretion). All such trademarks, trade names and logos (with the exception of
trademarks, tradenames or logos of VITEX used with permission as described
above) shall be owned by USSC, shall not become a Trademark owned by VITEX nor
shall VITEX acquire any right, title or interest therein or have the right to
use any thereof during or after the Term. VITEX agrees that any rights arising
to it from the use of the USSC trademarks in the Territory and any goodwill
related thereto shall inure to the benefit of USSC.
16. PROTECTION OF INTELLECTUAL PROPERTY RIGHTS.
------------------------------------------
(a) If, at any time during the Term, either party shall become aware
of any apparent infringement or threatened infringement by a third Person of the
Existing Patents or Future Patents in the Field (collectively, the "IPRs"), the
parties having the knowledge thereof shall promptly give notice to the other
party. **** ***** **** *** *****, *** *** *** **********, ** *********, ** ***
**** **** *** *******, ** ****** ** *** *** **** ** ** *** **** ** ***** ** ***
**********, *** ***** ** ******** ** *********** **** *** ** *** ******** **
*******, ******** ** ****** ******** ** ********* ** *** **** ******, ********
**** **** ***** ***** ******** ** *** ********** ***** *** **** ******* *** **
***** **** ******* ** *** *******, ******** ** ****** ******** ** ********* **
*** **** ****** ***** ********** ***** **** ******* ** *** **** ** ********
***** ***** ********* **** **** ****** ** ***** ** ********** **** *** ***** **
**** *********. In the event that any such Action for infringement may only be
asserted in a particular jurisdiction in the name of VITEX or any of its
Affiliates, then VITEX agrees that it will allow USSC to prosecute such Action
in VITEX's name or in the name of VITEX's Affiliates at USSC's request. USSC
shall have sole control of the Action and all negotiations for its compromise or
settlement.
(b) If, at any time during the Term, either party becomes aware of a
claim or Action by a third Person that the use of an IPR or the marketing,
distribution or sale of a Product in the Territory infringes or allegedly
infringes the intellectual property rights of a third Person, the parties having
the knowledge thereof shall promptly give notice to the other party. Such notice
shall set forth the claim of the apparent infringement or threatened
-35-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
infringement to the extent then known by the notifying party. **** ***** ****
*** ****** ** ****** **, ** *** ******, ****** *** **** ***** ** ****** ** ***
****** **** ** ** ***** ** ** ********* **** *** *** ********* **** ***
************ ******** ****** ** *** ***** ******. *************** *** *********,
** ***** *** ****** ********* ***** ** ** ** ** *** **** ** **** ********* ** *
***** ** ******, ** *** ***** ** *** ************ ******** ***** ******** ***
***** *** **** ***** ******** ***** ** ******, **** ***** **** ** ********** **
****** ***** ** *********** *******. **** ***** **** **** ******* ** *** *******
** **** ***** ** ****** *** *** *********** *** *** ********** ** **********.
(c) VITEX will provide reasonable assistance and information to USSC
in connection with such claims and Actions, upon reasonable prior notice,
including, without limitation, securing the testimony of its officers,
directors, employees, agents and inventors, provided that USSC shall reimburse
VITEX for all out of pocket expenses, other than attorney's fees and expenses,
incurred by VITEX in providing such cooperation.
(d) Notwithstanding anything in this Section 16 to the contrary, the
parties acknowledge that certain of the IPR include intellectual property
licensed by VITEX from the New York Blood Center ("NYBC") (the "NYBC IPR")
pursuant to the New York Blood Center License Agreement. VITEX hereby conveys to
USSC all of VITEX's rights under the NYBC IPR or otherwise to defend the NYBC
IPR in the Field.
17. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS.
-----------------------------------------------------
(a) VITEX and USSC each hereby represent and warrant to the other as
follows:
(i) The execution, delivery and performance of this Agreement
by such party has been duly authorized by all requisite corporate action;
(ii) The execution, delivery and performance of this Agreement
by such party and the rights granted to the other party hereto is not restricted
or otherwise limited by, and does not conflict with, or constitute a breach or
default under, (A) its certificate of incorporation or bylaws or any equivalent
charter documents, (B) any Law applicable to it, or
-36-
(C) any provision of any agreement, contract, commitment or instrument to which
it is a party or by which it or any of its assets is bound;
(iii) Except for Governmental Approvals required to manufacture
and market the Products, the execution, delivery and performance of this
Agreement by such party does not require any Governmental Approval.
(iv) There is no claim, Action or investigation, pending or
currently threatened against it, which (i) if adversely determined, would
restrict or limit its right to enter into this Agreement, grant the rights which
are granted by it under this Agreement or carry out its respective obligations
under this Agreement) or (ii) involves or relates to any of the IPRs.
(b) VITEX hereby further represents, warrants, covenants and agrees
with USSC as follows:
(i) The description of Products, set forth in Exhibit A of
---------
this Agreement is a true, correct and complete description of such Products as
of the date of this Agreement.
(ii) The patents and patent applications set forth in Exhibit B
---------
of this Agreement constitute and include all of the patents and patent
applications owned by, or licensed to, VITEX or its Affiliates, or in which any
of them has any right, title or interest, relating to Products. The nature of
any such licensors' rights, title or interest in the foregoing is as set forth
in Exhibit B. There is no Lien on VITEX's interest in any of the foregoing and
---------
VITEX covenants and agrees to retain such interests free and clear of any Lien.
(iii) Set forth on Exhibit D is a description of the
---------
manufacturing process which VITEX will use to manufacture the Products under
this Agreement. With the exception of those portions of the said manufacturing
process covered by patent rights of the New York Blood Center and licensed to
VITEX under the license agreement attached as Exhibit E hereto (the "NYBC
---------
License"), VITEX is the owner of all rights, title and interest in any
Technology necessary to manufacture the Products under this Agreement. There is
no Lien on any of VITEX's said rights or on VITEX's interest in the NYBC
License. VITEX covenants and agrees to retain its said rights free and clear of
any Liens. To VITEX's knowledge, but without
-37-
specific investigation, there is no Lien on NYBC's interest in the NYBC License
or on the patents which are the subject of the NYBC Agreement.
(iv) The New York Blood Center License Agreement set forth in
Exhibit E of this Agreement is a true, correct and complete copy of such
---------
agreement and constitutes all of the arrangements between the NYBC and VITEX
with respect to all intellectual property involving or relating to the Products,
Improved Products or Enhanced Products.
(c) The representation and warranties of each party contained in
subparagraphs (a) and (b) above (i) shall be considered to have been relied upon
by the other party hereto regardless of any discussion, review or investigation
made by or on behalf of, the other party, and (ii) shall survive the execution
of this Agreement and shall remain true and correct after the date hereof with
the same effect as if made as of the date hereof.
(d) Each party hereto covenants and agrees that it shall not enter
into any oral or written agreement or arrangement that would be inconsistent
with its obligations under this Agreement or the rights granted to the other
party in this Agreement.
(e) Nothing in this Agreement shall be construed as a representation
or warranty that the IPRs are valid or enforceable or that their exercise does
not infringe any intellectual property rights of third parties. Notwithstanding
the foregoing, VITEX hereby represents and warrants to USSC that, to the best of
its knowledge and belief, neither the exercise of the IPRs nor the marketing,
distribution or sale of Products thereunder would infringe the valid
intellectual property rights of any third Person.
18. TERMINATION OF AGREEMENT.
------------------------
(a) VITEX may terminate this Agreement upon written notice to USSC in
the event of any of the following ("USSC Events of Default"):
(i) USSC commits any breach of a provision of this Agreement,
which breach continues for sixty (60) consecutive days after receipt of notice
thereof from VITEX, except for USSC's failure to make payment to VITEX of any
material amount due and owing
-38-
and such failure continues for fifteen (15) consecutive days after receipt of
notice thereof from VITEX, unless USSC contests same in good faith.
(ii) USSC makes an assignment for the benefit of creditors, or
a trustee or receiver for USSC or any substantial part of its assets is
appointed and such trustee or receiver is not discharged or stayed within sixty
(60) consecutive days; or
(iii) Any proceeding involving USSC is voluntarily commenced by
USSC under any bankruptcy, reorganization, insolvency, readjustment of debt,
dissolution or liquidation Law; or if such proceeding is involuntarily
instituted against USSC and the same shall remain undismissed or unstayed for
sixty (60) consecutive days.
(b) USSC may terminate this Agreement upon written notice to VITEX in
the event of any of the following ("VITEX Events of Default"):
(i) VITEX grants third parties any rights conflicting with the
Rights, or commits any other breach of a provision of this Agreement, which
breach continues for sixty (60) consecutive days after receipt of notice thereof
from USSC, unless VITEX contests the existence of such breach in good faith;
(ii) VITEX makes an assignment for the benefit of creditors, or
a trustee or receiver for VITEX or any substantial party of its assets is
appointed and such trustee or receiver is not discharged or stayed within sixty
(60) consecutive days; or
(iii) Any proceeding involving VITEX is voluntarily commenced by
VITEX under any bankruptcy, reorganization, insolvency, readjustment of debt,
dissolution or liquidation Law; or if such proceeding is involuntarily
instituted against VITEX the same shall remain undismissed or unstayed for sixty
(60) consecutive days.
(c) USSC may terminate this Agreement upon nine (9) months notice to
VITEX.
(d) The parties may terminate this Agreement upon the mutual
agreement of VITEX and USSC set forth in a writing signed by both parties.
-39-
19. POST-TERMINATION OBLIGATIONS; SURVIVAL.
--------------------------------------
(a) Upon expiration of the Term or termination prior to the end of
the Term, USSC, its Affiliates and permitted assignees shall have the right to
market, distribute and sell or cause to be marketed, distributed and sold all
stocks of Products on hand on the date of expiration as well as any thereof
subject to outstanding purchase orders.
(b) In the event of any termination of this Agreement as provided in
Section 18(a) or 18(c) above, all Governmental Approvals specific to the
marketing and sale of the Products which are in the name of USSC or its
Affiliates shall be promptly transferred to VITEX, to the extent transferable.
(c) Neither USSC nor VITEX shall be relieved of their respective
obligations to pay sums of money due and payable or accrued under this Agreement
as of the date of such termination or expiration.
(d) Any provision required to interpret and enforce the parties'
rights and obligations under this Agreement upon the expiration or termination
of this Agreement shall survive such expiration or termination to the extent
required for the full observation and performance of this Agreement by the
parties hereto.
20. NOTICES.
-------
(a) All notices, and other communications required or called for
under this Agreement shall be in writing, shall be transmitted by overnight U.S.
Mail, postage prepaid, or by certified or registered U.S. Mail, return receipt
request, postage prepaid or by overnight Federal Express or another nationally
recognized courier service (billed to sender) and shall be deemed delivered when
received by the party to whom it is addressed at:
If to VITEX:
V.I. Technologies, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-40-
Attn.: Chief Executive Officer
If to USSC:
United States Surgical Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: Senior Vice President and General Counsel
21. INDEPENDENT RELATIONSHIP.
------------------------
(a) Nothing herein contained shall be deemed to create an employment,
agency, joint venture or partnership relationship between the parties hereto or
any of their agents or employees, or any other legal arrangement that would
impose liability upon one party for the act or failure to act of the other
party. Neither party shall have any power to enter into any contracts or
commitments or to incur any liabilities in the name of, or on behalf of, the
other party, or to bind the other party in any respect whatsoever.
22. FORCE MAJEURE.
-------------
(a) Failure of any party to perform its obligations under this
Agreement (except the obligation to make payments when properly due) shall not
subject such party to any liability or place them in breach of any term or
condition of this Agreement to the other party if such failure is caused by any
cause beyond the reasonable control of such non-performing party, including,
without limitation, acts of God, fire, explosion, flood, drought, war, riot,
sabotage, embargo, strikes or other labor double, failure in whole or in part of
suppliers to deliver on schedule materials, equipment or machinery, interruption
of or delay in transportation, a national health emergency or compliance with
any Law of any Governmental Body, or Product recall or Plasma Recall
(collectively, "Force Majeure"). The party affected by such Force Majeure shall
notify the other party immediately and in detail of the commencement and nature
of such Force Majeure and the probable consequences thereof, and shall use its
best efforts to render performance in a timely manner, utilizing to such end all
resources reasonably available to it under the circumstances.
-41-
23. PUBLIC DISCLOSURE.
-----------------
(a) Neither party shall make any press release or other written or
oral public announcement regarding this Agreement and the transaction
contemplated hereby until first obtaining the prior consent of the other party,
which shall not be unreasonably withheld, unless such public announcement is
required by Law. The party required by Law to make any such public announcement
or other disclosure shall use reasonable efforts to inform the other party of
the proposed announcement or disclosure in reasonably sufficient time prior to
public release, and shall use reasonable efforts to provide the other party with
a written copy thereof in order to allow such other party to comment upon such
announcement or disclosure.
24. GOVERNING LAW; RESOLUTIONS OF DISPUTES.
--------------------------------------
(a) This Agreement and all questions relating to its validity,
interpretation, performance and enforcement shall be governed by and construed
in accordance with the internal laws of the State of Connecticut applicable to
contacts entered into and to be performed entirely within the State of
Connecticut without reference to its conflicts of laws provisions.
(b) The parties hereby agree that they will attempt in good faith to
resolve any controversy, claim or dispute ("Dispute") arising out of or relating
to this Agreement promptly by negotiations. Any material Dispute which is not
settled by the parties within fifteen (15) days after notice of such Dispute is
given by one party to the other in writing shall be referred to a senior
executive of USSC and the Chief Executive Officer of VITEX who are authorized to
settle such Disputes on behalf of their respective companies (each, a "Senior
Executive" and collectively, "the Senior Executives"). The Senior Executives
will meet for negotiations within fifteen (15) days of the referral of the
Dispute to them, at a time and place mutually acceptable to the Senior
Executives, but which meeting may be held telephonically.
(c) Subject to the procedure set forth in Section 24(b), any
controversy or claim or dispute arising out of or relating to this Agreement, or
the breach thereof, shall be exclusively settled by any federal or state court
located in the State of Connecticut and the parties
-42-
irrevocably submit to the exclusive jurisdiction of such courts and waive any
and all objections to jurisdiction, venue or service that they may have under
the law of the State of Connecticut or otherwise in those courts in any such
action, suit or proceeding.
25. MISCELLANEOUS.
-------------
(a) ENTIRE UNDERSTANDING. This Agreement contains the entire
--------------------
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporary agreements and understandings,
inducements or conditions, express or implied, written or oral, between the
parties hereto except as herein contained. The express terms hereof control and
supersede any course of performance and/or usage of the trade inconsistent with
any of the terms hereof. This Agreement may not be modified or amended other
than by an agreement in writing signed by all parties.
(b) PROVISIONS SEPARABLE. The provisions of this Agreement are
--------------------
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.
(c) WAIVER. Neither the failure nor any delay on the part of either
------
party to exercise any right under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right preclude any
other or further exercise of the same or of any other right, nor shall any
waiver of any right with respect to any occurrence be construed as a waiver of
such right with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.
(d) EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
-------------------------
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall be binding
when one or more counterparts hereof, individually or taken together, shall bear
the signatures of all of the parties reflected hereon as the signatories.
-43-
(e) BINDING NATURE OF AGREEMENT. This Agreement shall be binding
---------------------------
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Neither party shall transfer or assign this Agreement,
in whole or in part, without the prior written consent of the other; except that
USSC may, without such consent, assign this Agreement to an Affiliate of USSC
provided USSC remains liable for the performance thereof by such Affiliate.
(g) SECTION HEADINGS. The section headings in this Agreement are for
----------------
convenience only; they form no part of this Agreement and shall not affect its
interpretation.
26. EFFECTIVE DATE.
--------------
(a) Notwithstanding anything in this Agreement to the contrary, this
Agreement and each of the party's rights and obligations under this Agreement,
other than set forth in Section 26(b) below, shall become effective on the
"Effective Date" which shall be that date which is one (1) business day
following the last to occur of the following: (i) VITEX shall have received
approval of this Agreement and the transactions contemplated hereby by the VITEX
Board of Directors, but which shall occur no later than September 13, 1996; (ii)
USSC shall have completed its diligence review concerning VITEX, the New York
Blood Center License Agreement and the NYBC IPR with results thereof
satisfactory to USSC in its sole and complete discretion, (iii) VITEX and USSC
shall have agreed to their mutual satisfaction, in their sole and complete
discretion, on changes, if any, to the provisions of Sections 8(h) with respect
to a Capacity Event License and Section 16 (Protection of Intellectual Property
Rights) of this Agreement arising out of or related to the NYBC IPR, and any
consent, approval by NYBC, or lack thereof, with respect thereto, (iv) the
parties shall have mutually agreed upon the contents of Exhibits A, B and D, and
-------------------
(v) a site visit to VITEX's Melville, New York facilities by USSC personnel with
results thereof satisfactory to USSC in its sole and complete discretion.
Notwithstanding the foregoing, this Agreement shall terminate and be of no
further force and effect unless the Effective Date shall occur on or prior to
October 4, 1996. Each of the parties shall reserve the right not to have this
Agreement become effective in the event that between the date hereof and the
proposed Effective Date there shall occur a material adverse change concerning
Products or the business condition of the other party.
-44-
(b) The parties hereby covenant and agree to use commercially
reasonable efforts to cause the conditions set forth in Section 26(a) above to
be satisfied as soon as practicable after the date hereof. Without limiting the
foregoing, (i) VITEX shall prepare and submit to USSC on or prior to September
18,1996 for USSC's review and comments a draft of Exhibits A, B and D, (ii)
-------------------
VITEX shall, and shall use reasonable commercial efforts to cause the NYBC to,
provide USSC with information and documents responsive to USSC's diligence
requests to NYBC as soon as practicable, but in any event prior to September 18,
1996, in order that USSC may complete its diligence review, (iii) VITEX shall
use reasonable commercial efforts to (aa) obtain the consent of the NYBC to the
Capacity Event License in Section 8(h), and (bb) obtain the consent of the NYBC
to an amendment to, or waiver of, the relevant provisions of the New York Blood
Center License Agreement to the mutual satisfaction of the parties as relates to
Section 16 hereof, such consent to be obtained by VITEX on or before September
20,1996, (iv) VITEX shall cooperate with USSC to arrange USSC's site visit to
VITEX's Melville, New York facilities no later than September 20, 1996, (v) USSC
shall complete its review and comments of VITEX's draft of Exhibit D within two
days after USSC's receipt of such draft from VITEX; (vi) USSC shall complete its
diligence review within fourteen (14) calendar days following the receipt by
USSC of additional documents and information requested by USSC from VITEX and
NYBC in connection with USSC's diligence review, and (vii) subject to VITEX's
cooperation, USSC shall complete its site visit to VITEX's Melville, New York
facilities no later than September 20, 1996.
-45-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the date first above written.
V.I. TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: President & CEO
UNITED STATES SURGICAL CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President, Strategic Planning and Business
Development
-46-
EXHIBITS
--------
EXHIBIT A Description of Product
EXHIBIT B Existing Patents
EXHIBIT C Exclusivity Minimum Sales
EXHIBIT D Manufacturing Processes
EXHIBIT E VITEX/New York Blood Center License Agreement
EXHIBIT F Forecasts
-47-
EXHIBIT A
---------
DESCRIPTION OF PRODUCT
----------------------
-48-
EXHIBIT B
---------
EXISTING PATENTS
----------------
-49-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
EXHIBIT C
---------
EXCLUSIVITY MINIMUM SALES
-------------------------
Year following MLs sold in MLs sold in MLs sold in
-------------- ----------- ----------- -----------
Governmental Approval U.S.A Europe Japan
--------------------- ----- ------ -----
1 ******** ******** ********
2 ******** ******** ********
3 ******** ******** ********
4 ******** ******** ********
5 ******** ******** ********
1. "Exclusivity Minimum Sales" shall mean * ****** ********* ****** ******
------------------------------
******** *** ********, ******** ******** *** ******** ******** ******* ** ****
********* ***** ** ********** ** * *** ** ******* ******* **** *** ***** *****
********* **** *** **** ** ***** ************ ******** *** *** ********** ****
** * ******* ** ******** ** **** ** *** ****** ** ** ****, *** ********** **
********* ********* ** * ***** ******* ** ****** ***** *** ** *******, ****** **
*** *** ***** **** ***** ******* *********, ** ** *****.
2. Exclusivity Minimum Sales after the 5th year following Governmental
-------------------------------------------------------------------
Approval: *** *********** ******* **** ***** ***** ******** ** ***** ***** ***
--------
*** **** ********* ************ ******** ** *** **** ***** ** *** ***** *****
*** *** *** **** ********* ************ ********, ******* ** ********* **
******** ** **** ******* *. *** ******* ***** ***** ** *** *** ** *** *** ****
********* ************ ******** *** *** **** **** *** **** ****** **********
********* ** **** ***** *** **** ** ******** ***** **** ********* *******, **
***, **** *** ********** ** *** *********** ******* ***** ***** ***** **
********** ** *** *********** *********, ******* **********, ***********
******** *** *** ****** ** *********** ************* ** ******** ******** ***
******** ********. *************** *** *********, *** ******* ********* ***
***** **** *** *********** ******* ***** ***** *** *********** *** ** *******
***** ****** *********** *** ****** ** ******* * ************ ******** **
******** ******* ****** *********** ** ***** ** ****** ***** **** **** *** ***
********* *** ******* ** ****** *** **** ******** ** *** *****. ***********, ***
********* ******* ***** **** ** ********** **** *** *********. ***************
******** ** *** ******** ** **** ******* *, *** ***** ******** ** **** *******,
*** ***** ******* ** ** *** *********, *** ***********
-50-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
******* **** ***** *** **** **** ***** *** *** **** ********* ************
******** ***** *** ****** *** *********** ******* ***** *** *** *** ****
********* ************ ******** *** ***** ** *** ***** ***** *** ***** **
********** ** ********** **** *** ***** ******** ** **** *******.
3. Proration: Exclusivity Minimum Sales shall commence with the first
---------
calendar quarter following the date of such Governmental Approvals. The annual
minimums shall be prorated by calendar quarter as follows: ****** of the annual
minimum in the first calendar quarter following such Governmental Approval;
****** of the annual minimum in the second calendar quarter following such
Governmental Approval; ****** of the annual minimum in the third calendar
quarter following such Governmental Approval; and ****** of the annual minimum
in the fourth calendar quarter following such Governmental Approval. The
foregoing is not intended to create quarterly minimums, but rather to compute
annual calendar minimum sales requirements recognizing that Governmental
Approvals may be obtained at different times during a calendar year.
-51-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
4. Examples: The following examples shall serve to clarify Exclusivity
--------
Minimum Sales:
Example 1: If Governmental Approval is received in the U.S.A. on
March 30th, and no Governmental Approval in a Major Country in Europe (see
above) or Japan is received through the end of such calendar year, then the
Exclusivity Minimum Sales would be ****** ML (i.e. ****** ML).
Example 2: Example 1 situation plus the following: If Governmental Approval is
---------
received in a Major Country in Europe on June 30th of the next calendar year,
and no Governmental Approval is received in Japan through the end of such
calendar year, then the Exclusivity Minimum Sales for such calendar year would
be ****** ML calculated as the sum of the following:
U.S.A.: ****** being ****** of the remainder of First Year following
------
Governmental Approval in the U.S.A., plus ****** being ****** of the Second Year
following Governmental Approval in the U.S.A.; plus
Europe: ****** being ****** of the First Year following Governmental Approval in
------
Europe
Example 3: Example 2 situation plus the following: If Governmental Approval is
---------
received in Japan on September 30th of the next calendar year of this Agreement,
then the Exclusivity Minimum Sales for such calendar year would be ****** ML
calculated as the sum of the following:
U.S.A.: ****** being ****** of the Second Year following Governmental Approval
------
in the U.S.A., plus ****** being ****** of the Third Year following Governmental
Approval in the U.S.A.; plus
Europe: ****** being ****** of the First Year following Governmental Approval in
------
Europe, plus ****** being ****** of the Second Year following Governmental
Approval in Europe; plus
Japan: ****** being ****** of the First Year following Governmental Approval in
-----
Japan
-52-
EXHIBIT D
---------
MANUFACTURING PROCESSES
-----------------------
-53-
EXHIBIT E
---------
VITEX/NEW YORK BLOOD CENTER LICENSE AGREEMENT
---------------------------------------------
See Exhibit 10.7 to the Registration Statement.
-54-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
EXHIBIT F
---------
FORECASTS
---------
Example:
USSC's Initial Forecast:
****** binding ****** Units consisting of:
******Units ******
****** Units ******
****** non binding ****** Units consisting of:
****** Units ******
****** Units ******
USSC's Forecast ****** Later With Maximum Allowable Increases That
Would Not Trigger Capacity Event in the ******:
****** binding ****** Units consisting of:
****** Units ******
****** Units ******
(****** ******** *********** ** ********)
-59-
NEW YORK Blood Center
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
212/570-3000
September 27, 1996
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
V.I. TECHNOLOGIES, INC.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
RE: EXCLUSIVE LICENSE AGREEMENT (#4) FOR VIRALLY
INACTIVATED FIBRIN SEALANT/THROMBIN PRODUCTS
Dear ▇▇▇:
Reference is made to SECTIONS 2.1 and 2.2 of the above-referenced Exclusive
License Agreement (the "NYBC LICENSE") between the New York Blood Center, Inc.
("NYBC") and Melville Biologics, Inc. (now V.I. Technologies, Inc.) ("VITEX").
Under those Sections, VITEX has agreed not to grant any sublicenses under the
rights granted to it under the NYBC License without the prior written consent of
NYBC.
You have provided us with a copy of the Exclusive Distribution Agreement between
VITEX and United States Surgical Corporation, dated September 11, 1996 (the
"USSC Agreement"). Under SECTION 8(H) of the USSC Agreement, VITEX is required
to grant to USSC a Capacity Event License to manufacture and produce Products
(as such terms are defined in the USSC AGREEMENT) under certain circumstances,
which license would constitute a sublicense under the NYBC License. The
Effective Date of the USSC Agreement is subject to, among other events, the
NYBC's written consent to the said SECTION 8(H).
NYBC hereby consents to any Capacity Event License required to be granted by
VITEX under the provisions of SECTION 8(H) of the USSC Agreement.
Sincerely yours,
BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
-----------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
President
New York Blood Center, Inc.
cc: ▇. ▇▇▇▇▇▇▇, Esq.
▇. ▇▇▇▇▇▇▇▇▇▇, Ph.D.
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
NEW YORK Blood Center
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
212/570-3010
OFFICE OF THE PRESIDENT
September 27, 1996
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
V.I. TECHNOLOGIES, INC.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: EXCLUSIVE LICENSE AGREEMENT (#4) FOR VIRALLY INACTIVATED
FIBRIN SEALANT/THROMBIN PRODUCTS between the New York Blood
Center, Inc. ("NYBC") and Melville Biologics, Inc. (Now V.I.
Technologies Inc.). Effective October 26, 1995 ("License
Agreement") - AMENDMENT I
Dear ▇▇▇:
In connection with the Exclusive Distribution Agreement of September 11,
1996 between your Company and United States Surgical Corporation, you
have requested an amendment of the above-identified Exclusive License
Agreement with respect to the possible institution of patent
infringement actions against third parties. NYBC is willing to amend the
Exclusive License Agreement by the addition of the following new
Paragraph 8.5 to ARTICLE VIII. INFRINGEMENT:
8.5. Notwithstanding the provisions of PARAGRAPHS 8.1 - 8.4 above, if,
at any time during the Term of the Exclusive Distribution
Agreement between V.I. Technologies, Inc. (Formerly Melville
Biologics, Inc., and referred to herein as LICENSEE) and United
States Surgical Corporation ("USSC") dated September 11, 1996
("THE DISTRIBUTION AGREEMENT"), either NYBC or LlCENSEE or USSC
becomes aware of any infringement by a third party of any of the
PRODUCT PATENT RIGHTS (which are included in the definition of
IPR in the Distribution Agreement) with respect to the
manufacture or sale of any product listed on APPENDIX B hereof,
then NYBC and LICENSEE agree ***********************************
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["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
PAGE 2 - (TRO - EXCLUSIVE L.A.)
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*************************
With the exception of the addition set forth above, all the terms and
conditions of the captioned License Agreement shall remain in full force
and effect.
If the foregoing is acceptable to your Company, please sign the enclosed
copy of this letter and return it to us. Our signature on this letter
will serve to confirm the amendment of the Exclusive License Agreement
to include the new Paragraph 8.5 as set forth above.
Sincerely yours,
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ M.D.
---------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
President
New York Blood Center, Inc.
AGREED TO AND ACCEPTED BY:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
--------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
V.I. Technologies, Inc.
(Formerly, Melville Biologics, Inc.)
NEW YORK Blood Center
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇
212/▇▇▇-▇▇▇▇ Fax 212/▇▇▇-▇▇▇▇
OFFICE OF THE PRESIDENT
October 2, 1996
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
V.I. TECHNOLOGIES, INC.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: EXCLUSIVE LICENSE AGREEMENT (#4) FOR VIRALLY INACTIVATED
FIBRIN SEALANT/THROMBIN PRODUCTS - CONSENT TO ASSIGNMENT
Dear ▇▇▇:
Reference is made to SECTION 12.1 of the above-referenced Exclusive LICENSE
Agreement (the "NYBC License") between the New York Blood Center, Inc. ("NYBC")
and Melville Biologics, Inc. (now, V.I. TECHNOLOGIES, Inc.) ("VITEX"). Under
that Section, VITEX has agreed not to assign or otherwise transfer any of the
rights granted to it under the NYBC License without the prior written consent of
NYBC.
You have provided us with a copy of the Exclusive Distribution Agreement between
VITEX and United States Surgical Corporation ("USSC"), dated September 11, 1996,
amended on October 3, 1996, all effective on October 4, 1996 (the "USSC
AGREEMENT"). NYBC understands that under SECTION 16(D) of the USSC Agreement,
VITEX is required to assign to USSC, to the extent necessary to carry out the
provisions of SECTION 16, its rights under SECTION 8.2 of the NYBC License.
NYBC hereby consents to the assignment to USSC of VlTEX's rights under Section
8.2 of the NYBC License, provided that USSC agrees to assume VlTEX's obligations
under SECTIONS 8.2 and 8.3 of the NYBC License. Nothing contained herein (or in
the USSC Agreement) shall serve to alter or expand the rights of VITEX (or its
assignee, USSC) under Section 8.2 of the NYBC License.
Sincerely yours,
BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ MD
--------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
President
New York Blood Center, Inc.
cc: ▇. ▇▇▇▇▇▇▇, Esq.
▇. ▇▇▇▇▇▇, Esq. (A,R&E)
AMENDMENT AGREEMENT
THIS AMENDMENT AGREEMENT, made this 3rd day of October, 1996 by and
between V.I. TECHNOLOGIES, INC., a Delaware corporation having its principal
place of business at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (formerly known
as Melville Biologics, Inc.) ("VITEX"), and UNITED STATES SURGICAL CORPORATION,
a Delaware corporation having its principal place of business at ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("USSC").
WHEREAS, VITEX and USSC (collectively the "Parties") are parties to an
Exclusive Distribution Agreement dated September 11, 1996 (the "Distribution
Agreement"); and
WHEREAS, pursuant to Section 26 thereof, the Distribution Agreement will
not become effective until certain conditions have been satisfied; and
WHEREAS, the Parties desire to confirm that all of the said conditions
have been satisfied and that the Distribution Agreement shall become effective
subject to certain amendments to Section 16 thereof, all on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and intending to be legally bound, the parties agree as follows:
1. Definitions. Unless otherwise expressly defined, capitalized
terms will have the meanings ascribed to them in the Distribution Agreement.
2. Satisfaction of Conditions. The Parties hereby acknowledge and
agree that all of the conditions to effectiveness set forth in Section 26(a) of
the Distribution Agreement have been satisfied, including, without limitation,
the following:
(a) Exhibits A, B and D. Exhibits A, B and D to the Distribution
Agreement in the form agreed on by the Parties, are attached as Exhibits
A, B and D hereto.
(b) Consent of NYBC to Capacity Event License. A letter dated
September 27, 1996 consenting on behalf of the New York Blood Center to
the Capacity Event License in Section 8(h) of the Distribution Agreement
is attached as Exhibit E hereto.
(c) Amendment to NYBC License. A letter agreement dated September
27, 1996 amending the NYBC License with respect to certain matters
covered by Section 16 of the Distribution Agreement is attached as
Exhibit F hereto.
3. Effective Date. The Parties agree that the Effective Date of the
Distribution Agreement shall be October 4, 1996.
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
4. Amendment to Section 16. Section 16 of the Distribution Agreement
is hereby deleted in its entirety and replaced with the following:
16. Protection of Intellectual Property Rights
(a) Prosecution of Third Party Infringers. If, at any time
during the Term, either party shall become aware of any apparent
infringement or threatened infringement by a third Person of the
Existing Patents or Future Patents in the Field (collectively,
the "IPRs"), the party having the knowledge thereof shall
promptly give notice to the other party. Unless the Rights have
been converted to non-exclusive in accordance with this
Agreement, and except as otherwise provided in Section 16(b)
below. *****************************************************
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*****************. In the event that any such Action for
infringement may only be asserted in a particular jurisdiction in
the name of VITEX or any of its Affiliates, then VITEX agrees
that it will allow USSC to prosecute such Action in VITEX's name
or in the name of VITEX's Affiliates at USSC's request. ****
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(b) Limitations on USSC's Rights Regarding Third Party
Infringers. Notwithstanding anything in Section 16(a) to the
contrary, the parties acknowledge that certain of the IPR include
intellectual property licensed by VITEX from the New York Blood
Center (the "NYBC IPR") pursuant to the New York Blood Center
License Agreement, and that with respect to the NYBC IPR, USSC's
rights under Section 16(a) are limited to (i) those rights
expressly granted to it pursuant to the amendment to the New York
Blood Center License Agreements dated September 27, 1996, and
(ii) those rights at VITEX granted to it under Section 8.2 of the
New York Blood Center License Agreement, which rights VITEX
hereby assign to USSC to the extent necessary to carry out the
provisions of Section 16(a) subject to USSC's assumption of the
obligations of VITEX hereunder.
-2-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
(c) Defense of Claims of Infringement. If, at any time during
the Term, either party becomes aware of a claim or Action by a
third Person that the use of an IPR or the marketing,
distribution or sale of a Product in the Territory infringes or
allegedly infringes the intellectual property rights of a third
Person, the parties having the knowledge thereof shall promptly
give notice to the other party. Such notices shall set forth the
claim of the apparent infringement or threatened infringement to
the extent then known by the notifying party.
(i) *********************************************
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-3-
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
(bb) **********************************
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(d) Mutual Assistance. Each party will provide reasonable
-----------------
assistance and information to the other party in connection with
all such claims and Actions, upon request with reasonable prior
notice, including, without limitation, securing the testimony of
its officers, directors, employees, agents, and inventors,
provided that the party prosecuting or defending the claim or
Action shall reimburse the other party for all out of pocket
expenses, other than attorney's fees and expenses, incurred by
such other party in providing such requested cooperation.
5. Miscellaneous.
-------------
(a) Effect of Amendments. Except as expressly amended hereby,
--------------------
the Distribution Agreement shall remain in full force and effect. All provisions
of the Distribution Agreement relating to the interpretation or enforcement
thereof shall apply equally to this Amendment Agreement.
(b) Execution in Counterparts. This Amendment Agreement may be
-------------------------
executed in any number of counterparts, each of which shall be deemed to be an
original as against any party whose signature appears thereon, and all of which
shall together constitute one and the same instrument. This Amendment Agreement
shall be binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected hereon as
the signatories.
-4-
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
under seal as of the date first above written.
V.I. TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
------------------------------
Title: President & CEO
-----------------------------
UNITED STATES SURGICAL CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Title: V.P.
-----------------------------
EXHIBITS
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Exhibit A Description of Products
Exhibit B Existing Patents
Exhibit C None
Exhibit D Manufacturing Processes
Exhibit E New York Blood Center Consent Letter
Exhibit F New York Blood Center License Amendment
Schedule 1 List of Patents Covered by Section 16(e)
- 5 -
["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
EXHIBIT A
DESCRIPTION OF PRODUCTS
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["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
EXHIBIT B
PATENT/SERIAL NUMBER TITLE INVENTOR
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******************************[2 pages omitted]*************************
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["****" indicates material omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.]
EXHIBIT D
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