Plasma Supply Agreement - DCI Management Group Inc. and MedImmune Inc.
PLASMA SUPPLY AGREEMENT This Plasma Supply Agreement, dated effective as of the 6th day of February, 1996 by and between DCI Management Group,Inc., a New Mexico Corporation, c/o G.W. Matlin, 71 South Bedford Road, Mount Kisco, New York, ("Supplier") and Medimmune, Inc., a Delaware corporation with offices at 35 West Watkins Mill Road, Gaithersburg, Maryland 20878 ("Purchaser"). WITNESSETH: WHEREAS, Purchaser desires to purchase Source Plasma (as defined by Title 21 CFR 600.01 et seq) from Supplier in connection with a program requiring plasma with acceptable neutralizing titers for respiratory syncytial virus (RSV) (hereafter termed "Product"); and WHEREAS, Supplier is willing to supply Purchaser's requirements for Product, up to specified levels; NOW THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein set forth, the parties hereto agree as follows: 1.0 TERM AND RENEWAL 1.1 The initial term (the "Initial Term") of this Agreement shall begin on the effective date noted above and unless sooner terminated as provided herein shall continue for a period of three (3) years from the date of this Agreement. In anticipation of the parties extending this Agreement beyond the Initial Term, the parties agree that during the month of November, 1996 and annually thereafter they shall meet for the purpose of negotiating volumes and prices for the 12-month period three years into the future. For example in November, 1996 the parties shall meet to discuss volumes and prices for months 37-48. 2.0 PRODUCTS AND PRICES 2.1 Supplier shall supply to Purchaser for the Initial Term, and any extension thereof, Product in accordance with the specifications attached as Exhibit A hereto (hereafter the "Specifications") . 2.2 During the first twelve months of this agreement, Purchaser shall pay for Product purchased hereunder at a price equal to (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) per liter of plasma, F.O.B. Louisville, KY or Aberdeen, MD, or any destination in continental U.S. as directed by Purchaser. The price for months 13-24 will be reviewed on or before November 1, 1996, and on or before November 1, 1997 for months 25-36 of the contract. Based on existing plasma market prices for all source plasma types in the domestic and international market places there shall be a price increase each year. The minimum increase of the price hereunder for each 12 month period shall be the percentage change in the Consumer Price Index (All Urban Consumers CPI-U/United States City Average/All Items Indexed) over the previous twelve month period as determined and published by the United States Department of Labor/Bureau of Labor Statistics and the maximum shall be (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED). In no event shall the price ever be less than the initial price hereunder. The parties shall negotiate such price increase in good faith. If the parties cannot agree by December 15th on a new price, each party shall select a proposed price within the above parameters for submission to an arbitrator who shall select one party's proposal. The arbitrator shall be selected by the parties, and the arbitration shall be conducted, according to the rules of the American Arbitration Association, and the arbitrator's decision shall be final and non-appealable. Each party shall pay its own costs and expenses, including attorneys fees and costs incurred in any proceedings in court to confirm the arbitration decision. Pending the decision of the arbitrator, Purchaser shall pay one- half of Supplier's proposed price increase per liter for each liter of plasma purchased during the year and upon determination by the arbitrator of the applicable price for such year the parties shall promptly adjust their accounts retroactively, including interest on the amount owed at the prime rate as published daily in the Wall Street Journal (the "Prime Rate"). The actual price paid by Supplier for any tests required or recommended by the US FDA or adopted by the Plasma Industry which are not set forth in Section 5.2 shall be added to the agreed upon price and shall not be considered as part of the price increase for purposes of this Section. Such additional test costs which may occur during any period where the price has already been established shall automatically be added to the price per liter effective on test implementation date. Supplier shall use its best efforts to keep such cost to a minimum. 3.0 PAYMENT 3.1 Purchaser shall pay for Product at the price set forth in Section 2.2 Terms of payment are net thirty (30) days from date of shipment. 3.2 The price set forth in Section 2.2 includes manufacturing, packaging, quality control and holding of Product and does include the cost of shipment to the F.O.B. point. 3.3 Each invoice will include the following details: a) shipment number b) cost per shipment c) volume per shipment d) bill of lading number of each shipment e) center name f) number of cartons g) carton sequence h) cost per liter i) total volume j) total cost for the invoice 4.0 ORDER AND DELIVERY 4.1 Supplier shall provide Purchaser (through Purchaser's designee laboratory) at no cost to Purchaser plasma samples in amounts and at times mutually agreed upon by Purchaser and Supplier. In the event that a Plasmapheresis center is supplying plasma for two (2) of the Purchaser's plasma programs, the Supplier shall, as directed by the Purchaser provide two (2) separate plasma samples, one for each program to the same or different locations as designated by Purchaser. These samples shall enable Purchaser to test and identify plasma donors and/or plasma lots suitable for producing Product for Purchaser in accordance with the Specifications. 4.2 All sales of Product by Supplier to Purchaser hereunder shall be subject to the provisions of this Agreement and shall not be subject to the terms and conditions contained in any purchase order of Purchaser or confirmation of Supplier except insofar as any such purchase order or confirmation establishes Product ordered or sold thereunder and the delivery date and carrier thereof. 4.3 During the initial 24-month term of this Agreement Purchaser shall accept all material from identified acceptable RSV donors up to the following maximum volumes: for the period covering months 1 thru 12 -(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED); for the period covering months 13 thru 24 - (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)and for the period covering months 25 thru 36- (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED). Notwithstanding the aforesaid, after the initial 24 month period if Purchaser determines that its total annual volume needs of RSV plasma is less than the amount then currently being supplied by Supplier, Purchaser shall notify Supplier in writing of its anticipated total volume requirement from all vendors for months 25-36 of the Initial Term of the Agreement and in such event Supplier shall cease sending new donor samples for screening to Purchaser's laboratory in order to limit growth in RSV plasma production. Purchaser however, shall continue to purchase all material produced from previously approved donors for the period covering months 25 thru 36 up to a maximum of(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED). If at any time during the 25th - 36th months the average volume of plasma produced from previously approved donors drops below (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)of the needed total volume of material required by Purchaser from all Suppliers, then in such event Supplier shall resume sending samples of new donors plasma to Purchaser's laboratory for testing and approval, and Purchaser shall accept such RSV plasma from Supplier up to a level equal to (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) of Purchaser's total RSV annual volume requirements.If at any time during the initial 36-month period of thiscontract or any extension period Purchaser is unable toproduce finished product from the RSV plasma being suppliedas a result of U.S. Food and Drug Administration suspension or revocation of Purchaser's license or Purchaser's voluntary withdrawal of all finished product from the market place,then in such event Purchaser may elect to suspend this Agreement until such time as the production and sale of finished product is reinstated provided Purchaser accepts and timely pays for all RSV plasma from approved donors which was drawn from donors prior to the date of the Food and Drug Administration's suspension or revocation of Purchaser's license or Purchaser's voluntary withdrawal of all finished product from the market place. This paragraph shall not be interpreted as in any way being in conflict with Section 16.0 of this Agreement. 4.4 Supplier shall arrange insured common carrier transportation of Product to Purchaser's designated destination. Such carrier shall be a qualified shipper of perishable medical products and shall be approved in advance by both Purchaser and Supplier. Title to and risk of loss of Product shall pass to Purchaser at the time of delivery to the carrier at the F.O.B. point. Supplier shall use its best efforts to deliver quantities of the Product specified herein, it being understood that Purchaser shall accept Supplier's total RSV production from acceptable approved donors during the initial period of this contract up to the maximum herein before set forth sub section 4.3. Supplier's failure to supply quantities of RSV plasma equal to Purchaser's production needs or maximum volumes herein before set forth shall not be deemed a breach of contract, it being understood and agreed that the Supplier has no control over the volume of RSV plasma to be collected at various facilities. Supplier shall invoice Purchaser for Product no earlier than the date of shipment. 4.5 Supplier shall schedule the timely shipment of Product pursuant to Purchaser's requirements as established by Purchaser in writing. For the purpose of this Agreement, a timely shipment shall be a shipment that leaves the F.O.B. point not later than two weeks after approval from Purchaser to ship product. No shipment, however, shall be for less than 40 liters of material. It is also agreed that Supplier can ship prior to receipt of shipping authorization from Purchaser's designee laboratory; conditioned upon the following: A - Purchaser pays for material when units are authorized. Supplier can bill without authorization if authorization has not been received three (3) weeks from date of shipment of samples. B - Supplier will issue a credit memo to Purchaser for any unauthorized units that are shipped in error. 4.6 Supplier shall supply Purchaser a list of all centers covered by this Agreement. (Exhibit B) Supplier shall have the right to add additional centers to said list with prior written approval of Purchaser, so long as Purchaser is not then currently purchasing plasma from said additional centers. 5.0 QUALITY CONTROL 5.1 Supplier and its subcontractors and vendors shall manufacture Product in accordance with the Specifications. All plasma collection facilities shall be currently QPP certified by the American Blood Resources Association. 5.2 Plasma shipments will be accompanied by a plasma packing list that records for each unit shipped a unit number, donor identification number, draw date, volume and test results for HBsAg, ALT, Anti HIV I & II and Anti HCV. A six-month "look back" program on Donors reactive to HBsAg and Anti HIV I & II will remain in effect on all units shipped to Purchaser. The tests used for screening plasma shipped to Purchaser shall conform to the most current technology available for use in the plasma collection industry and shall conform to FDA requirements for such tests. 5.3 Supplier agrees that all Product supplied hereunder and the manufacture and delivery thereof shall be in compliance with all applicable laws and regulations (21 CFR 211.606 and 640). 5.4 Supplier shall provide Purchaser's Quality Control Department with a reasonable number of production samples of Product for QC testing by Purchaser. 5.5 All product manufactured and sold hereunder is subject to Purchaser's inspection, prior to acceptance pursuant to Section 6.1. 5.6 Purchaser shall have the right upon reasonable advance notice during normal business hours to inspect each facility at which Product is produced for the purpose of observing production and quality control and inspecting all documents applicable to manufacture, processing and holding of Product. Such inspections shall be limited to a frequency of no more than once every 12 months unless quality deviations occur, in which case Purchaser shall have the right to inspect more often. All source documents concerning laboratory testing shall be retained in accordance with FDA regulations and they shall be available for inspection by Purchaser. 5.7 Purchaser and Supplier shall immediately notify each other with respect to any "Look Back" and adverse Drug Reaction Reports with respect to Acceptable Donors and resulting Product. 6.0 ACCEPTANCE AND REJECTION 6.1 If upon receipt and inspection of Product by Purchaser at the destination specified in the shipping instructions, the shipment, or any portion thereof, does not conform to the order or the Specifications, Purchaser shall promptly notify Supplier of such condition and afford Supplier a reasonable opportunity to inspect the Product and make any appropriate adjustment or replacement. Supplier shall complete the adjustment or replacement within sixty (60) days of notification by Purchaser. The cost of any replacement shall be at the sole expense of Supplier including any return shipment or reshipment. During this period and at all times prior to shipment by Supplier, plasma is to remain stored at temperatures specified by FDA regulations. 6.2 In the event Purchaser experiences an over supply of Product resulting in excess inventory, upon reasonable written request by Purchaser, Supplier shall use its best efforts to assist Purchaser in selling such excess Product through Supplier's existing distribution channels. 7.0 COLLECTION SITES 7.1 Supplier and Purchaser will determine by mutual agreement the plasmapheresis locations which will provide samples and/or plasma for the program herein mentioned. Centers chosen will remain in the program until all Donors from a center are removed from the program due to antibody titer loss or the program comes to an end. Before admittance to the program all centers must provide to the Purchaser a completed Plasmapheresis Center Information Form, as supplied by the Purchaser or Purchaser's designee laboratory. It is agreed that no proprietary questions will be answered by Supplier. In addition, it is agreed that a general company overview can be utilized to answer questions that have the same answers for all centers. It is understood and agreed that the identification of donors by Purchaser as meeting Purchaser's specification for production of RSV Hyperimmune Globulin is proprietary information and that although Supplier does not know Purchaser's exact specifications Supplier is aware that once a donor has been identified as meeting such specifications, such plasma could potentially be sold to third parties for manufacture by such third parties into RSV Hyperimmune Globulin. Accordingly, it is agreed that supplier will not, during the term of this agreement and for twelve months thereafter, knowingly sell plasma from any approved donor identified by Purchaser as having RSV Antibody to any other purchaser for the intended use by such other purchaser in the manufacturing of RSV Hyperimmune Globulin. 8.0 TERMINATION 8.1 In addition to any other remedy it may have, either party shall have the right to terminate this Agreement if the other party fails to remedy and make good any material default in the performance of any material condition or obligation under this Agreement within sixty (60) days of written notice thereof. 8.2 The failure of either party to terminate this Agreement by reason of the breach of any of its provisions by other party shall not be construed as a waiver of the rights or remedies available for any subsequent breach of the terms or provisions of this Agreement. 8.3 The exercise of one remedy by a party shall not preclude such party from exercising additional remedies. 8.4 Upon termination of this Agreement, Purchaser must pay for any Product already delivered. 8.5 Either party may terminate this Agreement effective immediately upon giving notice of termination, if the other party shall file a petition in bankruptcy, shall be adjudicated as bankrupt, shall take advantage of the insolvency laws of any state, territory or country, shall make an assignment for the benefits of creditors, shall be voluntarily dissolved, or shall have a receiver, trustee or other court officer appointed for its property. 8.6 Purchaser further covenants and agrees that during the term of this Agreement and any renewal or extension period and for twelve (12) months thereafter, Purchaser shall not, without the express written consent of Supplier purchase any plasma of the same or similar specifications as set forth in Exhibit "A" directly or indirectly from any parties who have supplied such plasma to Supplier and which Supplier sold to Purchaser. It is agreed and understood that any breach by Purchaser of this covenant set forth in this sub paragraph 8.6 shall cause irreparable harm to Supplier and Supplier shall be entitled to obtain an injunction against Purchaser in addition to any other legal or equitable remedies available to Supplier. 9.0 WARRANTIES AND INDEMNIFICATIONS 9.1 Supplier warrants and represents that at the time of shipment, Product covered by this Agreement shall conform to the applicable Specifications and the other requirements expressly set forth in this Agreement and that the Supplier shall deliver Product to Purchaser free from claims or liens of third parties that may affect title to the Product. 9.2 Purchaser shall indemnify and hold Supplier harmless from any and all third party claims of disease related liability arising from the use in manufacturing of Product provided by Supplier, except those which result from Supplier's negligence or willful misconduct. Supplier shall promptly notify Purchaser of any such claims. Where Purchaser acknowledges that the indemnification is applicable with respect to such claims Purchaser shall control the defense, settlement or compromise of any such claims. 10.0 NOTICES 10.1 Any and all notices permitted or required to be given hereunder shall be sent by registered or certified mail, postage and fees paid, with return receipts requested, addressed as on the first page of this Agreement or at such other address as to which a party gives notice under this Section 10.1. Notice shall be deemed given as of the date of mailing. 11.0 ASSIGNMENT 11.1 Neither party shall assign this Agreement in whole or in part other than as part of the sale of all or substantially all of its business assets without the prior written consent of the other. Upon a permitted assignment, all of the provisions of this Agreement and all rights and obligations of the parties hereunder shall be binding upon and inure to the benefit and be enforceable by the successors and assigns of Supplier and Purchaser. 12.0 ENTIRE AGREEMENT 12.1 This Agreement, including the Exhibits attached hereto constitutes the sole and entire Agreement between the parties with respect to the sale of Product by Supplier to Purchaser and may not be altered or modified except in writing and signed by duly authorized officers of both parties. 13.0 INDEPENDENT CONTRACTOR 13.1 In all activities under this Agreement, Supplier shall act and be deemed an independent contractor with no authorization to in any way obligate or bind Purchaser. This Agreement shall not be deemed held or construed as creating a copartnership between Supplier and Purchaser for any purpose whatsoever. 14.0 SEVERABILITY 14.1 If any terms or provisions of this Agreement shall be invalid or unenforceable, the remaining terms hereof shall not be affected, but shall be valid and enforced to the fullest extent permitted by law, unless such invalid or unenforceable term or provision materially affects a party's rights or expected rights under this Agreement. 15.0 HEADINGS 15.1 The headings used in this Agreement are intended for guidance only and shall not be considered part of the written understanding between the parties hereto. 16.0 FORCE MAJEURE 16.1 Neither party shall be liable for non-performance caused by factors beyond that party's direct control, said factors including but not being limited to: (i) natural disasters or other "Acts of God"; (ii) riots, wars, or insurrection; or (iii) actions of any governmental agency, including rules, laws, orders, regulations and restrictions. 17.0 APPLICABLE LAW 17.1 This Agreement shall be construed and enforced in accordance with the law of the State of New York without reference to choice of law principles. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers as of the day and year first above written. MEDIMMUNE, INC. DCI MANAGEMENT GROUP, INC. BY: David M. Mott BY: Ira London President Secretary 2/7//96 2/7/96 EXHIBIT A SPECIFICATIONS FOR RSV SOURCE PLASMA 1. PURCHASER'S DESIGNEE Plasma samples and plasma units are to be shipped for screening and processing to such persons or entities designated by Purchaser from time to time. Purchaser's designee for receipt of plasma samples shall be the Massachusetts Public Health Biologics Laboratory (MPHBL). Purchaser shall notify Supplier in writing of any change in such designee. 2. LICENSES Supplier shall supply Medimmune and its designee with documentation that each Source Plasma center of Supplier selected by Supplier for producing Product is currently licensed by the FDA for collection of Source Plasma (i.e. copy of FDA license). 3. PLASMA SAMPLES A 0.5 ml sample of plasma from each donation from donors for whom Supplier seeks qualifications must be submitted and received by Medimmune or its designee. 4. ACCEPTABLE RSV DONORS Medimmune or its designee will advise Supplier of donor acceptable for contributing to the RSV plasma supply program ("Acceptable Donors") based on the donor's RSV antibody titers. Acceptable Donors must also meet the FDA requirements for Source Plasma. Acceptable Donors will continue to remain acceptable based on their RSV titers until Medimmune or its designee notifies Supplier in writing that the donor is no longer acceptable. Acceptable Donors shall be removed from the RSV program immediately upon receiving such notification from Medimmune or its designee. Plasma from Acceptable Donors drawn up to the day after notification date will be accepted. 5. ACCEPTABLE RSV PLASMA UNITS All plasma drawn from Acceptable Donors (see item #4 above) will be accepted as long as the Donor remains an Acceptable Donor and the plasma meets all FDA requirements for Source Plasma. If a Donor becomes unacceptable, all plasma units collected up to the day after notification will be accepted but units drawn after that date will not be accepted (see item #4 above). Before shipping plasma units, Supplier must send a copy of the proposed "Plasma Packing List" (see item #6 below) to Medimmune or its designee for verification. 6. LABELLING AND TESTING Plasma shipments must be accompanied by a "Plasma Packing List" that records for each unit shipped in identification (i.e. "Control") number of the unit, a donor identification number, signature of pheresis center Manager, date plasma was drawn, volume and results of the HBsAg, Anti HIV I & II and Anti HCV, and ALT tests. 7. "LOOK BACK" Purchaser must be informed of any donor becoming positive for Anti HIV I & II or HBsAg, if plasma from that donor has been shipped to Purchaser anytime during the preceding 6 months, so the Purchaser can judge if previous donations are acceptable for fractionation. 8. DELIVERY AND SHIPPING A. Until Supplier is notified otherwise as contemplated in item #1 above, plasma should be shipped to: Baxter Hyland Protein Control 4501 Colorado Blvd. Los Angeles, CA 90039 B. Invoice should be sent to: Medimmune, Inc. 35 West Watkins Mill Road Gaithersburg, MD 20878 C. Plasma should be shipped frozen in suitable containers so that the plasma is maintained at temperatures specified by FDA regulations or required for product integrity. The requirement for product integrity of RSV is minus 20 degrees Celsius. D. Plasma is to be shipped in containers with cardboard dividers. Each case will have a barcode affixed on the outside of the carton. The exact details of information on barcode will be mutually agreed to. E. DCI will provide Medimmune a copy of Bill of Lading and Packing List for each unit within 48-hours of shipment. F. DCI will have management reports for Medimmune to review material expected, material received, material processed, and material cleared for shipment. It is agreed that DCI and MedImmune's MIS staff will review the best format for reports. DCI and MedImmune will review the ability for MedImmune to have access to certain data on the RSV computer system. At a minimum the information required would include, but not be limited to, the following data which might be accessed either weekly, monthly or quarterly: number of screens sent, number of donors enrolled, number of units authorized, number of units picked up/sent (broken down by shipment and volume), number of new donors enrolled, number of screens sent to enroll those donors, number of donors dropped from the program, enrollment dates, number of units sent since enrollment, date dropped from the program, and number of units sent weekly, monthly and/or quarterly. Data will be provided on any kind of ASCii file, preferably, delimited, with a standard output that is on PC accessible media. It is agreed that all donor information is confidential in addition, it is agreed that all software design, including Data Base structures and other proprietary information be confidential to the extent that such information is not already in Purchaser's possession or is not now hereafter entered in the public domain, such information is supplied only for Purchaser's internal use. At no time can it be discussed with any Third Party without prior written approval of Supplier. 9. The following are the procedures to cover all RSV Plasma collected from approved donors. A. DCI will send RSV confirm samples and paperwork for complete cartons only. The samples will be sent with an electronic packing form disk. B. The cover sheet will be modified (example attached) to indicate the number of cartons, individual carton numbers, and total units from each individual center. C. Mass Laboratory will inspect each incoming sample shipment and advise if the shipment was complete or which units are missing sample tubes. There will be a place on the coversheet for Mass Lab to confirm the number of samples received from each center. If a sample is missing, Mass will indicate in the space provided, the details indicating which bleed is missing a sample. It is understood that Mass has agreed that it will confirm within three days from receipt of the samples. D. DCI will give its best effort to obtain the missing sample and send it with the following weeks confirmed samples package. It is agreed that the packing list for the entire carton will be sent with the sample. Mass has agreed to give their best effort to release single unit shipments at the same time as the entire lot. E. Mass will advise DCI of any problem units within any individual carton. DCI will arrange for the corrected paperwork for the individual carton involved to be faxed to Mass. F. Within a two week period, it is Purchaser's and Supplier's understanding Mass will issue to DCI confirmation shipment verification. The verification will reflect the details of the original paperwork or the paperwork with any changes that were required by Mass prior to verification. We expect Mass to issue confirmation by entire lots, same as they receive them, confirmation including lot numbers. G. DCI Centers will ship to Bio Med when confirmation shipment verification is received. All paperwork will be modified if required to remove any problem units. The paperwork will be sent with shipping disk the same as always. A copy of the Bill of Lading will be included with paperwork. H. All Nabi and contract centers will send in modified paperwork to reflect any changes required by Mass prior to receipt of verification. Upon verification notice, DCI will submit corrected paperwork and shipping disk to Mass. The actual shipment will not leave the Queens Village warehouse until shipping approval is received. It is Purchaser's and Supplier's understanding that Mass will issue shipping approval within a two week period after date of shipment of samples to Mass. DCI may ship and bill MedImmune if approval is not received within the time period defined in section 4.5A of the RSV Agreement. EXHIBIT B (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)