Manufacturing Services Agreement with Organ Recovery Systems, Inc., effective as of December 22, 2011

 

3.1           BioLife Performance.  Subject to the provisions of this Agreement, BioLife will Manufacture Product and perform the Services under this Agreement with industry standard care and skill.  Additionally, BioLife shall comply with the applicable Product Specifications, Master Batch Record, and Good Manufacturing Practices. Products Manufactured in accordance with Product Specifications and Good Manufacturing Practices are expected to meet release criteria as reasonably determined by ORS.  

3.2           ORS Performance.   ORS is responsible for providing complete and accurate Product Specifications and requirements for Manufacturing, together with additional information in the possession or control of ORS, necessary for BioLife to develop the Master Batch Records, Batch Records and other production documentation for the Manufacture of each Product.  ORS shall be responsible for all regulatory issues concerning Product submissions, listing, labeling content and end user instructions for use, and ORS shall be responsible for final Product release.

3.3           Changes.  BioLife shall promptly notify ORS in writing regarding changes to production processes, environmental changes, and similar material matters that might impact safety, Manufacturing or compliance with the Product Specifications and Good Manufacturing Practices, and shall implement such changes only after such written notice is received and approved in writing by ORS.  Conversely, ORS shall obtain BioLife’s written approval before changes are made to the Product Specifications, or other changes are made that may have a material impact on BioLife or the Manufacturing or use of the Products.  In either case, ORS and BioLife will review cost impact and adjust pricing and other terms accordingly as mutually agreed in writing by the parties.

3.4           Documentation and Reporting.  BioLife shall keep complete and maintain systematic written records of BioLife’s operations in connection with the performance of the this Agreement, and shall retain all such records for the period required by applicable law or guidelines, or for five years after completion of the Agreement, whichever is greater.  BioLife will provide ORS with the copies of each Batch Record and retain the originals for its records. All documentation and submissions to regulatory authorities in support of the Products are the responsibility of ORS except as otherwise required by law.

3.5           Master Batch Record. The parties shall mutually develop and approve a Master Batch Record for each Product (including, but not limited to Product Specifications).  Provided that all questions and requests for additional information with respect to any documentation or Product Specifications which BioLife may have are addressed by ORS, BioLife shall deliver a draft of the Master Batch Record for each Product to ORS within a reasonable period of time in order to allow ORS to review and provide input on such draft.  The Master Batch Record for each Product must be approved by both parties and, to the extent approval of both Parties is required for any changes in the Master Batch Record under this Agreement, such changes must be approved at least ten (10) days prior to commencement of Manufacturing activities with respect to the first Batch of such Product to be Manufactured using such Master Batch Record or implementing any such change, including any scheduled validation runs.

4.1           Documentation. BioLife will maintain originals of the Master Batch Records and Batch Records for all Product. BioLife will provide to ORS a Certificate of Analysis and a Certificate of Compliance for all finished Product reporting, among other required items, test results and adherence to cGMP, and will provide copies of any of the foregoing as requested by ORS. The acceptance criteria for Batches will be as mutually agreed by ORS and BioLife in the Product Specification prior to commencement of any production activities. ORS is responsible for release of Product for commercial distribution.

 

All Batch Records will be held securely by BioLife for a period of at least 5 years from Manufacturing start date, or such longer period as required by law.  ORS is responsible for notifying BioLife and requesting records be maintained for greater than 5 years and contracting for ongoing storage.  All records specific to or directly supporting Product will be available for review by ORS upon request.

 

These documents include but are not limited to:

 

●	Master Batch Records and Batch Records

 

●	BioLife Standard Operating Procedures

 

●	Batch Records In-process controls

 

●	Deviation and final investigation reports

 

●	Non-conformities and final investigation reports

 

●	All QC records

 

●	Certificates of Analysis and Compliance

 

●	Raw Material Records

 

●	Validation Protocols & Reports

 

●	Inventory records

 

●	Calibration records

 

●	Personnel training records

 

4.2           cGMP Compliance. The Manufacturing of Product must comply with all the requirements of the current Good Manufacturing Practices as described in FDA regulations 21 CFR Part 820 Quality System Regulation for medical devices, as amended from time to time.

 

4.3           Manufacturing, Controls and Quality Compliance. The Manufacturing will be carried out in accordance with the documentation prepared and authorized by BioLife’s Quality department and in accordance with the Manufacturing Standards.  ORS must approve all Batch Records, the Batch Master Records, Product Specifications, and Manufacturing changes prior to implementation at BioLife.  These will be treated as controlled documents and will be maintained utilizing BioLife’s document control procedure in order to ensure proper issuance and change control. BioLife will ensure and document that all personnel engaged in the Manufacture of Product shall have the education, training and experience necessary to perform assigned job functions.

 

 

BioLife will maintain qualified vendors, specifications, and when relevant, appropriate testing programs approved by ORS for all starting materials, reagents, intermediates, Manufacturing aids and packaging used in the scope of the Manufacturing, and all materials and components will be purchased by BioLife except as set forth in this paragraph. In the case where starting materials and components are sourced from ORS qualified vendors, appropriate acceptance criteria and corresponding analytical methods will be defined and implemented in cooperation with ORS.  BioLife shall assign unique lot numbers and track components used in each lot.  BioLife Batch history records are key documents for tracking materials used in the Manufacturing and packaging of Product.  Part numbers and lot numbers will be clearly indicated for all components.  The status of material (e.g., released, quarantined, rejected, etc.) will be clearly indicated for all Product and materials at all times.

 

BioLife will also maintain a copy of Product Specifications for ORS.  Analytical testing for which BioLife takes responsibility must be conducted at an approved vendor audited and/or approved by ORS.

 

All BioLife equipment used in the Manufacturing, controls and storage of Product for ORS and components thereof at BioLife shall be regularly calibrated/qualified according to BioLife policies and procedures.  Equipment qualification shall meet 21 CFR 820 expectations.

 

The Batches manufactured by BioLife will be tested according to testing methods and specifications approved by ORS in writing.

 

BioLife will release each Batch to ORS on basis of the Manufacturing and controls documentation review. BioLife will provide to ORS a BioLife QA-approved Batch History Record and a certificate of GMP compliance, as well as a Certificate of Analysis and Certificate of Compliance.

 

BioLife will be responsible for providing a written investigation and assessment of Product impact for any deviation during the Manufacturing of Product related specifically to BioLife facilities, equipment or aseptic process validation parameters. ORS has the right to review all documentation of Manufacturing and testing of the Product prior to authorization of shipment.  This review shall be conducted within a reasonable period of time following written notification by BioLife that the documentation is complete and ready for review.   Authorization to ship Product will be provided to BioLife in writing by the ORS QA Representative after review of the Certificates of Analysis and Compliance, Batch Record and other documentation as deemed necessary by ORS.  If ORS requests that BioLife store Product for more than 15 days after BioLife has submitted appropriate Certificates of Analysis and Compliance, the applicable Batch Record and other documents as deemed necessary by ORS for approval by ORS in compliance with this Agreement, ORS agrees to pay reasonable storage charges that will be mutually agreed to between ORS and BioLife.

 

Each Batch will be Packaged and provided to ORS with the corresponding and requested documentation.

 

All materials and Products will be Manufactured in the Facility in environments suitable for the Manufacturing stage.  BioLife will maintain environmental controls, including particulate and environmental monitoring, pest controls and housekeeping procedures in accordance with BioLife procedures and cGMP.  The use of facility supplies of water, air and part handling, etc., shall be consistent with cGMP and BioLife’s policies and procedures.

 

4.4           Change Control. Any major change to the Manufacturing or controls, including the Facility and equipment, pertaining to the process and its corresponding instructions or methods, or to the documents prepared by BioLife on behalf of ORS and detailing specific instructions together with all associated in-process controls affecting the Manufacturing or testing of processes or Product requires the written agreement of the ORS QA Representative prior to implementation.

 

4.5           Man In The Plant. ORS may, at ORS expense, place a company representative on-site at the BioLife Manufacturing facility during the Manufacture of any Product.  Such representative shall have full, unfettered access to all operations, documents, and records that pertain to the manufacture of any Product, except that access to the Grade A, Grade B, or Grade C controlled environment areas are restricted to BioLife personnel.

 

4.6           Material Review. All Batches for which deviations occur from the Product Specifications or procedures authorized by BioLife’s Quality department for the Manufacturing, controls, or storage of materials or Product, or any other problem arising during performance of such activities will be fully investigated by BioLife.  BioLife will immediately notify ORS (but within 24 hours in all events) in reasonable detail if BioLife determines that such an investigation is necessary or advisable.  Investigations must be completed and approved by BioLife’s Quality department. The ORS QA representative will be notified within 2 Business Days of all deviations and provided a copy of the deviation and investigation report within 12 days of BioLife’s investigation initiation.  If an investigation of any deviation, non-conformance or other failure to meet the Product Specifications takes longer than 12 days, BioLife, will provide to ORS an interim report no later than 15 days of initiation of the investigation.  If an ORS on-site representative is present, that individual will be immediately notified of deviations. ORS on-site representative shall be entitled to notify ORS QA and any other ORS personnel deemed necessary by ORS.  ORS will be included in decisions regarding Product and possible corrective actions. ORS may actively participate in any investigation described above and all results will be shared as they become available. All records of the investigation together with the rationale and justification of the decisions that are taken will be maintained with the related documentation.

Rework and reprocessing instructions and/or procedures, if possible, will be developed and approved in writing by ORS with applicable technical assistance from BioLife and provided to BioLife by ORS QA and technical staff prior to being performed by BioLife.  Written approval for all rework and reprocessing must be received from ORS QA.  All rework and reprocessing must be consistent with regulatory filings, applicable law, the Product Specifications, BioLife procedures and otherwise in accordance with this Agreement.

 

ORS provided materials found by BioLife not to be in conformance with written specifications or drawings will be clearly identified and segregated.  ORS shall be notified in writing of non-conforming materials within 48 hours of the occurrence via email and BioLife will dispose non-conforming materials according to ORS written instructions.  Any parts designated as scrap will be returned to ORS or disposed of according to ORS instructions and at ORS cost.    In case of rejections, ORS shall be responsible for the final decision to return non-conforming materials to the component or raw material supplier, if applicable.

4.7           Storage and Shipping. All materials, components, Products, work in progress and related items shall be stored and shipped per environmental requirements specified in Product  Specifications or raw material and component specifications.

4.8           Retained Samples. Samples of Product from each Batch will be retained by BioLife, as specified in this Agreement and Manufacturing instructions, and as otherwise required by law. ORS shall be entitled to designate the period for which Samples will be retained.

4.9           Samples. BioLife will pull samples for release testing, stability, retains, and research and development as instructed by the Manufacturing instructions and/or in writing by ORS. ORS will be financially responsible for any stability testing requested by ORS based on a written quote from BioLife and approved in writing in each instance by ORS. Inventory records documenting the history and purpose of removal of samples from each Batch will be maintained.

4.10           Complaints. ORS is solely responsible for all complaints. Complaints will be documented and managed in accordance with ORS procedures.  Complaints referred to BioLife for more information will be fully investigated by BioLife’s Quality department and a report prepared and issued to the ORS QA Representative within a reasonable time-frame mutually agreed to between ORS and BioLife from receipt of the complaint.

4.11           Recalls.  If either party has reason to believe that one or more Batches of a Product should be recalled or withdrawn from distribution, such party shall immediately inform the other in writing.  Recalls and withdrawals of Product shall be within the sole discretion of ORS. BioLife will cooperate fully with ORS in the event of any recall or withdrawal and will provide at ORS’s expense, such assistance in connection therewith as ORS may reasonably request.  Notwithstanding the foregoing, if any recall or withdrawal occurs as a result of Product which is determined not to be conforming to the requirements set forth in this Agreement, BioLife shall reimburse ORS for the reasonable out of pocket costs and expenses incurred by ORS in connection with such recall or withdrawal.

4.12           Regulatory Inspections. BioLife will advise ORS in writing immediately upon receipt of any notice of any regulatory inspection of BioLife that may in any way be related to the Products.  ORS shall have the right to attend any such inspection.  BioLife will provide ORS with copies of any reports or communications containing any observations arising from inspections at the facilities of BioLife carried out by any regulatory authority.  BioLife will provide ORS with a copy of all deficiencies noted and the BioLife response to the regulatory agency.  This documentation may be redacted to maintain confidentiality regarding other BioLife clients.  BioLife shall cure all deficiencies of any kind or nature noted in any regulatory inspection or audit, at BioLife’s sole cost and expense.

 

     4.13           Regulatory Updates. No documentation with respect to Products Manufactured by BioLife for ORS will be provided by BioLife directly to the FDA or any other regulatory authority, except as specifically agreed to in writing by ORS and BioLife or as required by law.

5.1           Forecast and Raw Materials.  ORS shall provide BioLife with a 12-month rolling forecast of Product deliveries that will allow BioLife to order, receive and approve raw materials prior to the issuance of a Purchase Order.  The initial 12 month rolling forecast accepted by BioLife is included in Appendix A to this Agreement. ORS will be financially responsible for any raw materials ordered by BioLife to produce up to six (6) months of Product deliveries from this 12 month rolling forecast.  Upon written request by BioLife, the six (6) month limit set forth in the preceding sentence may be extended by ORS in writing on specific materials.  ORS shall update and deliver to BioLife the 12-month rolling forecast by no later than the last day of each fiscal quarter. Should ORS fail to provide an updated 12 month forecast, the previous forecast shall remain effective.

Increases to the rolling forecast of more than 500 liters in any 90 day period from the most recent forecasted quantity for such 90 day period must be approved in writing by BioLife.  BioLife and ORS agree that Product shipments may commence as early as both parties agree, and in any case, before March 2012 if possible.

5.2           Purchase Orders.  ORS shall provide Purchase Orders to cover calendar quarters of deliveries.  All Purchase Orders shall be sent by first class mail, email or facsimile. ORS shall issue Purchase Orders to BioLife for Product production lots at least 60 days prior to the beginning of the next calendar quarter provided that the requirements stated in Section 5.1 are met.  Within 5 Business Days after BioLife’s receipt of a Purchase Order, BioLife shall either accept the Purchase Order or provide a written explanation for rejection, or a new proposed delivery date.

5.3           Minimum Purchase Order Quantities.  ORS agrees to place Purchase Orders for at least 80% of the quantities listed in Appendix A.

5.4           Shipping.  All shipments are FCA BioLife (per INCOTERMS 2010). BioLife shall ship Products to the address set forth as specified in the Purchase Order.

5.5           Raw Materials.  In order to insure an adequate inventory of raw materials for BioLife Manufacturing of Products, ORS may, at its discretion, purchase additional lots of raw materials and provide same to BioLife at the Facilities.  These additional lots of raw materials would be rotated into BioLife’s raw material inventory and, once so used by BioLife would be replaced in the same quantity and type by BioLife in such time as to ensure a continuing appropriate supply of raw materials.

6.1           BioLife Scheduling Policy.  To maintain a smooth manufacturing schedule, to offer reasonable flexibility to ORS, and to allow the BioLife project managers to provide ORS with estimated filling dates for the purposes of completing a timeline, the following scheduling policy shall apply to this Agreement.  The BioLife manufacturing division will set BioLife’s manufacturing schedule, and only those projects that have achieved the following project milestones will be confirmed on the schedule:

 

(a)           Receipt of signed Agreement, and an accepted Purchase Order;

 

(b)           All required validations/qualifications/engineering runs are performed and approved;

 

(c)           Production Batch record approved by ORS and BioLife;

 

(d)           All equipment and preparation items in-house and available for use;

 

(e)           Components, excipients and/or active ingredients have been received and released.

 

Once on the manufacturing schedule, ORS will be notified of the actual fill date.  A postponement or cancellation caused by ORS will incur fees as described below.  BioLife will work closely with ORS to achieve ORS’s scheduling requirements.  BioLife’s manufacturing schedule is necessarily complex, and BioLife reserves the right to change the schedule to permit maximum utilization of the facility.  Should scheduling changes be necessary, BioLife shall notify ORS and in no event shall BioLife’s actual production date be greater than 15 days from the original production date accepted by BioLife.

 

6.3           Equipment Purchased by ORS. BioLife agrees not to use equipment purchased by ORS for any purpose other than the Manufacture ORS Products.

 

6.4           Exclusivity.  During the term of this Agreement and for a period of two (2) years following the termination or expiration of this Agreement, BioLife agrees that it will not directly or indirectly manufacture, produce, promote, process or sell, for its own account or on behalf of any third party, any solution that is approved for clinical use in the perfusion, flushing, irrigation or static storage of human organs (including for this purpose, to the best of BioLife’s knowledge pancreatic islet cells) that are harvested, transported or otherwise made ready for transplant.

 

 

7.1           Pricing.  The initial prices for the Services shall be as set forth on Appendix B.

7.2           Annual Price Review.  The parties agree to review and, if appropriate, to adjust pricing in twelve-month intervals during the term of this Agreement.  The prices shall be quoted and paid in United States Dollars.

7.2           Price Increases for Raw Materials and Components.  The parties agree to review and adjust pricing if any raw material cost increases by more than 10%.

 
 

7.3           Invoicing.  BioLife will submit invoices to ORS upon the issuance of the completed Batch Record which complies fully with this Agreement for each Batch.  All invoices shall be sent by first class mail, email or facsimile.

7.4           Payment.  ORS shall pay all amounts correctly invoiced by BioLife within 30 days after the date of such invoice.  ORS shall pay a late fee, commencing on the due date, on all delinquent payments.  The late fee shall be the lesser of 1.0% per month (12% per annum) or the maximum rate allowed under applicable law.  Without limiting any other remedies, BioLife may withhold future deliveries if payment is not received in a timely manner.

 

7.5           Taxes.  All prices for any Products are exclusive of any export, foreign import, federal, state or local tax or excise.  Any such tax or excise paid by BioLife (other than taxes on BioLife’s income) shall be reimbursed by ORS, and shall appear as a separate item on the BioLife invoice; provided, however, that BioLife shall not pay any such tax or excise if BioLife receives a valid tax exemption certificate from ORS prior to shipment.

8.1.           Time to Examine Shipment.  Following delivery of a shipment of Products to ORS’s premises, and during the time Products are located at ORS’s premises, ORS will have a period of 10 days in which to examine the quantities of Products delivered: (i) for substantial conformity with the Purchase Order, and (ii) to ensure that such delivery of Products is accompanied by a Certificate of Analysis, and (iii) visually inspecting the exterior of the shipment of Products to verify that the shipment appears to be in good condition. If ORS determines that the shipment does not pass such examination it shall promptly notify rejection of the shipment to BioLife in writing.

8.2.           Returns.  Within 10 days of receipt by BioLife of a notice of rejection from ORS in accordance with Section 8.1, BioLife shall issue a return authorization in writing to ORS.  In the event that a return authorization is so issued, ORS shall package and return to BioLife the quantity of Products in question at BioLife’s expense and BioLife shall replace such quantity within a commercially reasonable amount of time mutually agreed upon by ORS and BioLife.  If the payment in respect of such quantity of Products is outstanding, the payment date shall be postponed until 30 days from the date such replacement quantities are received and accepted by ORS in accordance with this Section 8.

8.3.           Dispute resolution.  After BioLife receives a rejection notice from ORS pursuant to Section 8.1 and BioLife issues a return authorization under Section 8.2, BioLife shall analyze any quantity of Products rejected by ORS for non-conformity with the requirements of Section 8.1 within 10 days of receipt of such returned Products and present its findings with respect to such quantity of Products to ORS.  If such tests confirm non-conformity with the relevant Specification, BioLife shall promptly, at ORS’s option and at BioLife’s cost and expense either: (i) supply a conforming quantity of Products in the same quantity as the rejected Products and reimburse ORS for any shipping charges in relation to such non-conforming quantity of Products as specified in this Section 8.2 or (ii) refund the purchase price of the rejected Products, inclusive of any shipping charges.  If the quantity of confirmed non-conforming Product is less than 200 units, BioLife shall increase the quantity of the next Purchase Order placed by ORS by the quantity of non-conforming Product, at no additional cost to ORS.  If the quantity of non-conforming Product is greater than 200 units, BioLife shall use its best efforts to manufacture replacement Product at an expedited rate, resulting in delivery of such replacement Product no later than six (6) weeks from the date of notification by BioLife of determination of a Product as non-conforming.  If the Parties cannot agree on whether the quantity of Products in question conform to the requirements of Section 8.1 an independent qualified laboratory reasonably acceptable to both Parties, and at a cost shared equally by both Parties, shall analyze both ORS’s and BioLife’s samples of the Products in question, and the definitive results of such laboratory shall be binding on the Parties.  If the quantity of Products in question is determined to be non-conforming, such non-conforming Products shall be held for BioLife’s disposition, or shall be returned to BioLife, in each case at BioLife’s expense, as directed by BioLife no later than 10 days following such determination.  If the quantity of Products in question is determined to be conforming and provided that the Certificate of Analysis and Certificate of Compliance accompanying such quantity of Products did not indicate it to be non-conforming, such quantity of Products shall be returned to ORS at ORS’s cost and expense, including any associated testing costs.

10.1           Acknowledgment.  ORS acknowledges that BioLife has quoted its fees in reliance upon the limitations on liability described in this Section 9.

10.2           Finished Product Limitation.   BioLife’s liability for finished Product shall be limited to sterility based on documented filter validation from ORS, or a waiver to use the specified filter signed by ORS.  The liability arising therefrom will be limited to production sufficient to replace any affected Product.

BioLife shall indemnify, defend and hold ORS and its officers, directors and employees and successors harmless from any Losses incurred by or made against ORS or any such other person arising from or relating in any way to (i) the gross negligence or willful misconduct of BioLife or any employee, officer or director of, or contractor to, BioLife; (ii) a claim by a third party that BioLife’s use of any BioLife Intellectual Property independent of Product infringes or misappropriates such third party’s intellectual property rights; (iii) any violation of any law, rule or regulation applicable to BioLife’s obligations under this Agreement; or (iv) any breach of this Agreement by BioLife, provided, however, that the foregoing indemnification shall not apply to the extent such Losses result from the gross negligence or willful misconduct of ORS.

10.4           General Limitation.  Without limiting the foregoing provisions of this Section 10, except with respect to BioLife’s indemnification obligation in Section 10.3 above, in no event will BioLife’s total liability to ORS exceed the amounts invoiced by and paid to BioLife for the relevant Products, on a lot specific basis.  Additionally, even if BioLife has been advised of the possibility of such damages, UNDER NO CIRCUMSTANCES WILL BIOLIFE BE LIABLE TO ORS UNDER ANY THEORY FOR ANY INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES ARISING FROM ANY LOSS RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT, SUCH AS BUT NOT LIMITED TO, LOSS OF REVENUE, LOST PROFITS OR LOST BUSINESS, except in the case of BioLife’s indemnification obligation set forth in Section 10.3 above or a breach by BioLife of any confidentiality obligation owing to ORS.

10.4           Insurance.  During the term of this Agreement and for a period one year thereafter, BioLife and ORS shall each carry Commercial General Liability Insurance, combined single limit, including without limitation, Product Liability and, in the case of ORS, Product Liability coverage.  The insurance shall cover amounts not less than two million dollars ($2,000,000) for each occurrence and in the aggregate.

 

13.13           Headings.  Headings used in this Agreement are for convenience only and will not be used to construe or interpret this Agreement by either party.

13.14           No Use of Name.  BioLife, on behalf of itself and its employees, agents and affiliates, agrees not to use the name of ORS or any of its employees, agents or affiliates, or reference any of their Products, in any publicity, advertising or other publication (other than required filings with the Securities and Exchange Commission, excluding prices, commercial terms or volumes, which are and remain the Confidential Information of ORS) or as otherwise required by any governmental authority, without ORS’s prior written approval granted or withheld in ORS’s sole discretion.