Purchase Agreement - Biopure Corp. and INPACO Corp.
PURCHASE AGREEMENT
THIS AGREEMENT effective August 28, 1997 between Biopure Corporation, 11
Hurley St., Cambridge, MA 02141 (hereafter "Biopure") and INPACO Corporation,
1690 E. Race Street, Allentown, Pennsylvania 18103 (hereafter "INPACO").
WITNESSETH:
WHEREAS, INPACO has developed and owns certain intellectual property,
trade secrets, engineering designs, manufacturing processes and operating
information and know-how relating to the design, use and manufacture of the
packaging of fluids in polymeric films together with the dispensing fitment
devices used to extract the fluidic contents (hereafter the "Technology").
WHEREAS, INPACO has and may hereafter obtain patent rights on inventions
made by INPACO (hereafter the "Patent Rights") related to the Equipment to be
licensed to Biopure;
WHEREAS, Biopure desires to (1) purchase from INPACO the Equipment; (2) to
obtain a nonexclusive license for the use of the Technology and the Patent
Rights; and (3) have access to additional Technology as may be available after
the execution of this Agreement arising from a continuing relationship between
the parties.
NOW THEREFORE, the parties agree as follows:
1. Defined Terms shall have the meaning set forth in Schedule A, attached
hereto and incorporated herein by reference.
2. INPACO shall sell to Biopure the Equipment for which Biopure shall make
payment as follows:
2.1. Upon execution of this Agreement, Biopure shall pay INPACO the
sum of $441,940 with the order; $441,940 when one-half of the Equipment is
completed (When the main drive motor is installed); $441,940 prior to shipment
of the Equipment; and $147,314 upon installation and start-up of the Equipment.
If installation and start-up is delayed by Biopure, final payment will be paid
90 day after the equipment is shipped from Inpaco.
Page 1 of 7
<PAGE> 3
2.2. In addition to the payments required under Section 2.1 above,
Biopure shall pay INPACO a Royalty equal to $0.80 per MSI of film Packaging
Materials and $0.025 per fitment, for bags produced by Biopure for sale. Should
Biopure decide to purchase the Packaging Materials from INPACO, then the Royalty
shall be included in the purchase price of the Packaging Materials.
2.3. Biopure will remit Royalties to INPACO quarterly, no later than
30 days after the close of each calendar quarter, together with an accurate
report of the number of units produced and the value of each such unit
determined as set forth in Section 2.2 above. Any Royalty not paid by the
thirtieth (30th) day following the close of any calendar quarter shall bear
interest at the annual rate of five percent (5%) above the prime rate published
by the Wall Street Journal, Midwestern Division, on the next business day
following the date on which the Royalty was initially due. Royalties shall be
paid in U.S. dollars at conversion rates as reported by the Wall Street Journal,
Midwestern Division, prevailing on the last business day of each calendar
quarter.
2.4. Biopure's obligation to pay the Royalty to INPACO under this
Section 2 of this Agreement shall continue for so long as there are unexpired
Patent Rights or Biopure continues to use the Technology.
2.5. Biopure shall provide each year a statement prepared by its
accounting personnel, no later then January 30 of each year, certifying to the
accuracy of the Royalty paid to INPACO during the previous year.
2.6. Biopure will permit INPACO or INPACO's representatives to
audit, inspect and otherwise examine all relevant production records of Biopure
to determine the number of units produced for sale at times mutually convenient
to both parties. Biopure shall maintain all such records for a period of five
(5) years following the dates on which such production records are created. If
as a result of INPACO's audit, inspection or examination of Biopure's records it
is determined that the Royalty owed to INPACO during any calendar quarter has
been understated by more than two percent (2%), Biopure shall within ten day of
demand pay such amount of understated Royalty to INPACO with interest as set
forth in Section 2.3 above. In addition thereto, Biopure shall reimburse INPACO
the cost of such audit, inspection or examination.
3. INPACO hereby grants to Biopure, subject to the terms and
conditions hereinafter set forth, the right and license to use Equipment, the
Technology and the Patent Rights (the "License"). The License is nonexclusive.
The License is assignable by Biopure with prior written approval by INPACO.
INPACO may withhold written approval if the assignment is to a direct competitor
of INPACO or INPACO may withhold approval if the assignee does not assume all
commercial conditions of this agreement
Page 2 of 7
<PAGE> 4
3.1 INPACO warrants that it is the owner of the Technology and
Patent Rights and that it has the right to enter into this Agreement INPACO
shall indemnify and hold harmless Biopure from any claim made by a third party
against Biopure based upon or arising out of the infringement or alleged
infringement of any patent or other intellectual property rights of any other
person relating to the Equipment, the Technology or the Patent Rights, provided,
however, that Biopure shall not be entitled to any indemnification provided for
under this provision unless Biopure has made all payments due to INPACO under
the terms hereof.
4. Any and all inventions and ideas relating to the Technology conceived
by INPACO, whether or not such inventions and ideas are patentable shall be
deemed to be developed and owned solely by INPACO. Any such inventions or ideas
shall be the property of INPACO and shall be included under the license.
5. All information disclosed by INPACO to Biopure concerning the subject
matter of this Agreement, whether disclosed verbally, by samples, or in writing,
shall be considered confidential information. Biopure agrees that said
confidential information shall be retained in secret during the term of this
Agreement and for a period of five (5) years following any termination of this
Agreement and shall not be used for Biopure's own purposes or those of any other
person, or disclosed to others, except as otherwise permitted under this
agreement, unless the information received:
a. Was known to Biopure prior to its receipt from INPACO as evidenced
by a written document;
b. was publicly available at the time it was disclosed to Biopure
pursuant to the Agreement;
c. subsequently becomes publicly available through no fault of Biopure;
d. is rightfully acquired by Biopure, subsequent to disclosure to it by
INPACO, from a third party who is not in breach of a confidentiality
obligation regarding such information; or
e. required to be disclosed to the FDA or equivalent foreign
organization pursuant to Biopure's Business or is the subject of a
court order or subpoena requiring disclosure.
5.1 Biopure agrees that a breach of any provision of this Section 5 by
Biopure will result in irreparable injury to INPACO. Accordingly, Biopure agrees
that INPACO shall be entitled to an immediate accounting and to payment of all
proceeds realized by Biopure as a result of such breach and to injunctive relief
in any court of competent jurisdiction.
Page 3 of 7
<PAGE> 5
6. Unless otherwise terminated, this Agreement shall continue for a period
of ten (10) years from the date the Equipment is delivered to Biopure and shall
be automatically extended for additional three (3) year periods.
During the term of this Agreement and for a period of one (1) year
following any termination of this Agreement, Biopure shall refrain from the sale
of the vertical aseptic pillow type machine of the same design as the Equipment
manufactured by a third party.
Upon the expiration of the term of this Agreement or any termination
hereof, the License shall be revoked, become void and be of no further effect.
7. INPACO warrants the Equipment against defects in material and
workmanship under the normal use and service for which it was designed, for a
period of one year after date of start-up providing Equipment is stored in
accordance with INPACO's recommendations at Biopure' plant. If there is a delay
in installation and commissioning of the Equipment, the warranty will be for a
maximum of two years from original time of shipment on INPACO manufactured parts
only. INPACO's obligation under this warranty being limited to the repair or
replacement of material or the correction of material or workmanship of the
Equipment shown to INPACO's satisfaction to be defective provided Biopure shall
have notified INPACO in writing within 90 days of the discovery of any and all
such defects This warranty does not extend to components not manufactured by
INPACO. Warranties for component or device manufacturer's standard warranty,
INPACO's liability shall be limited to passing through the manufacturer supplied
with its product. INPACO hereby disclaims all other express and/or implied
warranties. It is further understood that in no event shall INPACO be liable for
any punitive, exemplary or consequential damages such as lost profits, lost
product, etc., INPACO's total liability being as stated above. INPACO hereby
disclaims all other warranties, express or implied including the warranty of
merchantability and fitness for a particular purpose, except as specifically set
forth above.
Biopure agrees to and will be responsible for operating the Equipment in the
manner and configuration for which it is sold and intended. Further Biopure, as
the sole manufacturer of the finished product produced by the Equipment, is
responsible for and agrees to integrate and operate the Equipment within a total
processing, packaging and distribution system which meets all of the laws,
regulations and requirements of local, state and federal government which apply
to the production of its products.
Page 4 of 7
<PAGE> 6
8. The License shall be subject to termination by INPACO, in accordance
with the following provisions:
a. In case any breach or default shall be made in observance or
performance of any one or more of the conditions herein contained, or if
Biopure shall become insolvent, then and in each such case INPACO shall
have the right by notice in writing to Biopure, to terminate the License.
b. In case Biopure becomes insolvent or bankrupt, or proceeding for the
appointment of a receiver against it, or makes or executes any bill of
sale, deed of trust or assignment for the benefits of creditors, the
license hereby shall thereupon cease and terminate unless INPACO shall
upon notice thereof elect otherwise.
9. If at any time either party should waive its rights due to any breach
or default by the other with respect to any of the provisions of this Agreement,
such waiver shall not be construed as a continuing waiver of other breaches or
defaults with respect to or in any manner affect the same or other provision of
this Agreement.
10. INPACO shall not be liable for failure to fulfill any of its
obligations under this Agreement, insofar and so long as such failure is caused
by strike, lockout, riot, sabotage, accident, trade dispute, war, fire,
explosion, flood, power shortage, confiscation, Act of God, or act of any
government.
11. This Agreement contains the entire Agreement between the parties. It
may not be changed orally but only by Agreement in writing signed by the party
against whom enforcement of any waiver, change, modification or discharge is
sought.
12. All the provisions of this Agreement are severable, and in the event
any of them shall be held to be invalid in any competent court, this Agreement
shall be interpreted as if such invalid portion were not contained herein. In
addition thereto, Section 5 and 13 of this Agreement shall survive any
termination of this Agreement.
13. Any and all disputes between the parties relating to or arising under
the terms and conditions of this Agreement shall be resolved by final and
binding arbitration pursuant to the rules of the American Arbitration
Association nearest INPACO. The decision by the arbitrator(s) shall be final and
binding upon the parties. In no event shall the arbitrator(s) be authorized to
award consequential, direct or indirect, punitive and/or exemplary damages.
Page 5 of 7
<PAGE> 7
14. Biopure and INPACO stipulate that this Agreement shall be governed by
and construed under and in accordance with the laws of the State of Ohio,
without regard to principles of conflict of laws.
INPACO Corporation Biopure
/s/ Joseph Premchus /s/ Geoffrey J. Filbey
------------------- ----------------------
Name Name
V.P. Sales V.P. Engineering
------------------- ----------------------
Title Title
9-04-97 28th Aug '97
------------------- ----------------------
Date Date
Page 6 of 7
<PAGE> 8
SCHEDULE A
Customer: Biopure Corporation
Address: 11 Hurley Street
Cambridge, MA
"Technology" means intellectual property, trade secrets, engineering designs,
patents, pending patent applications, unfiled patent applications, manufacturing
processes, operating information and know-how now and hereafter owned by INPACO
relating to the design, manufacture and operation of INPACO's packaging system
for the packaging of fluids in polymeric film containers including dispensing
fitment and metering devices used to extract fluidic contents.
"Equipment" means Mark II A-FA-Proposal P-578 attached hereto.
"Packaging Materials" means the fitment and film used on the Equipment.
"Patent Rights" means those valid, issued patents owned, licensed to or
controlled by INPACO which are listed below and any after acquired and/or issued
patents owned, licensed to be controlled by INPACO:
3,894,381 4,246,062 , 4,452,378 , 4,767,478 , 4,779,397 , 4,695,337 ,
--------- --------- --------- --------- --------- ---------
4,512,136
---------
Page 7 of 7