Exhibit 1
REGULATORY COMPLIANCE AGREEMENT
This Agreement made this 31st day of January, 2000 between Advance Biofactures
Corporation, a New York corporation having offices at 00 Xxxxxx Xxxxxx,
Xxxxxxxx, XX 00000 (hereinafter called "ABC"), Xxxxx Pharmaceutical Company, a
New Jersey corporation having offices at 0000 Xxxxxxxxxxx Xxxxx - Xxxxx, Xxxxx
Xxxxx, XX 00000-0000 (hereinafter "KPC"), and Xxxxx & Nephew, Inc, a Delaware
corporation having offices at 00000 Xxxxxxx Xxxx, Xxxxx, XX 00000-0000
(hereinafter "S&N").
WITNESSETH:
WHEREAS, ABC and KPC are parties to an Agreement dated August 16, 1993 (the
"License Agreement") pursuant to which ABC granted to KPC an exclusive license
to market the Licensed Product in the United States, including the Commonwealth
of Puerto Rico, and Canada with the right to sublicense upon prior written
consent of ABC (the "Licensed Rights");
WHEREAS, KPC and S&N desire to enter a long term contractual relationship
related to the Licensed Product, and seek continuity of supply of Licensed
Product in compliance with all relevant U. S. Food and Drug Administration
("FDA") laws and regulations;
WHEREAS, KPC desires to grant a sublicense of the Licensed Rights to S&N for the
period of time during which ABC will be addressing certain issues raised by FDA
related to the Product and its compliance with FDA laws and regulations, and S&N
desires to receive such sublicense (the "Sublicense");
WHEREAS, ABC has submitted to FDA a comprehensive compliance plan which includes
remedial steps which ABC believes address the regulatory issues raised by FDA
(the "Compliance Plan"); and
WHEREAS, KPC desires to assign the Licensed Rights to S&N following FDA Approval
of the Curacao Facility (as the term "FDA Approval of the Curacao Facility" is
defined in paragraph 9) following the remediation of ABC's manufacturing
facility for Collagenase Powder located in Curacao (the "Curacao Facility"),
which remediation ABC has undertaken as part of the Compliance Plan, and S&N
desires to receive such assignment (the "Assignment");
NOW, THEREFORE, in consideration of the premises set forth herein, it is
mutually agreed between the parties hereto as follows:
1. Redacted
2. ABC agrees to make its reasonable best commercial efforts to fully fund
and timely implement in all material respects the Compliance Plan, and
will permit KPC and S&N, each at its own expense, to monitor, upon
reasonable notice and at reasonable times and in a manner not
interfering with the ability of ABC to conduct its business and
operations, ABC's progress against the Compliance Plan.
3. Redacted
4. (a) Redacted
(b) Upon reasonable notice and at reasonable times to monitor and in a
manner not interfering with the ability of KPC or S&N to conduct their
respective businesses and
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operations, KPC and S&N shall each permit ABC, at no cost to KPC and
S&N, to audit their compliance with (i) all relevant FDA laws and
regulations having an impact on the manufacturing or sale of the
Licensed Product or any other activity relating to the Licensed Product
and (ii) all reports KPC or S&N make or are required to make to the
FDA. This audit shall be conducted in accordance with generally
accepted industry standards for conducting audits of this type. ABC
agrees that any ABC representatives shall comply with all safety and
security rules of KPC or S&N in effect at the time of any such audit.
(c) In the event a party disagrees with any determination by another
party as provided in paragraph 4(a) above that action is required to
assure FDA compliance under generally accepted industry standards, the
parties agree to meet to discuss the matter. In the event the parties
are unable to resolve their disagreement during a 60 day period, they
will seek the opinion of a regulatory consultant acceptable to each
party, the cost of whom shall be borne equally by the parties. Each
party agrees that the decision of such regulatory consultant shall be
binding upon it; and further agrees that it shall undertake, at its
sole cost, any reasonable action that such regulatory expert determines
is required to assure FDA compliance under generally accepted industry
standards. In the event such action will require an extraordinary
expense, the parties agree to meet to discuss the matter.
(d) It is understood and agreed among the parties that ABC has the
primary regulatory responsibility with respect to all matters related
to the regulatory compliance with all relevant FDA laws and regulations
having an impact on the Collagenase Powder for use in the License
Product as well as for the Curacao Facility. Accordingly, the
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ultimate decision maker with respect to regulatory compliance in
connection with these matters is ABC, subject to the terms and
conditions herein.
5. ABC acknowledges that it is in the process of recruiting and seeking to
hire and maintain qualified quality assurance personnel, including
without limitation a Vice President of Quality Assurance. If by
September 30, 2000, ABC has encountered difficulties in filling the
Vice President position, the parties agree to discuss the options
available to address this requirement.
6. (a) Redacted
(b) Redacted
(c) During the term of this Agreement, ABC shall apprise KPC and S&N at
the conclusion of each calendar quarter of ABC's inventory of
Collagenase Powder.
(d) During such renovation and up to FDA Approval of the Curacao
Facility, if ABC is unable or unwilling to fill any KPC order for
Collagenase Powder made in accordance with the terms and conditions of
the License Agreement, ABC agrees that it shall immediately provide to
KPC all the necessary technical information and manufacturing know-how
for KPC to manufacture Collagenase Powder. Except to the extent it may
be required by FDA or other governmental entity to disclose (after
giving ABC a reasonable opportunity to seek judicial relief to prevent
such disclosure), KPC agrees to keep secret and not use for any purpose
other than as stated herein any such technical information and
manufacturing know-how. At such time as ABC is able and willing to fill
KPC orders for Collagenase Powder in accordance with the terms and
conditions of the License
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Agreement, KPC agrees to (i) cease manufacturing Collagenase Powder and
(ii) return to ABC, or destroy at ABC's direction, all such technical
information and manufacturing know-how. This obligation of secrecy
shall be for the period of time, and governed by the exceptions, found
in Article 8(I) of the License Agreement. KPC shall not permit any
non-affiliated third party to manufacture the Collagenase Powder.
7. The term of this Agreement shall commence upon execution hereof by all
parties and shall expire when FDA Approval of the Curacao Facility and
FDA Approval of the Compliance Plan shall have been obtained.
8. KPC and S&N acknowledge that ABC shall not be liable for monetary
damages resulting from any non-compliance by ABC with respect to any of
its obligations arising solely under this Agreement unless and to the
extent that such non-compliance is determined by a final non-appealable
order of a court of competent jurisdiction to have resulted from ABC's
bad faith. Except as provided in the previous sentence, the sole remedy
of KPC and S&N shall be injunctive or other equitable relief.
9. (a) Redacted
(b) Redacted
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in
duplicate originals by their duly authorized representatives.
ADVANCE BIOFACTURES CORPORATION XXXXX PHARMACUETICAL COMPANY
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
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Title: Executive Vice President Title: President
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Date: January 31, 2000 Date: January 31, 2000
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XXXXX & NEPHEW, Inc
By: /s/ Xxx Xxxxxx Xx.
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Title: President
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Date: January 31, 2000
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