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EXHIBIT 10.10
STERILIZATION PROCESSING SERVICES AGREEMENT
This agreement (the "Agreement") is made and entered into as of the 1st
day of January 1996, between the Convertors/Custom Sterile Division of Xxxxxx
Healthcare Corporation, with its principal place of business at 0000 Xxxxxxxx
Xxxx, XxXxx Xxxx, Xxxxxxxx, 00000-0000 ("Buyer"), and Xxxxxxxx Micro Science,
Inc., with its principal place of business at 0000 Xxxxxx Xxxx, Xxx Xxxxx,
Xxxxxxxx, 00000 ("Seller"). This agreement may also apply to other Xxxxxx
divisions, subsidiaries, suppliers or contract manufacturers as mutually agreed
upon by Buyer and Seller.
1.0 TERM OF AGREEMENT. This Agreement will commence as of the 1st day of
January 1996 and shall continue for [ ** Confidential Treatment requested;
material filed separately with the Commission. ] years to [ * ]. This
Agreement may be extended for [ * ] upon the written consent of both parties.
At the end of the additional [ * ] year term, this Agreement may be extended
for additional [ * ] year terms upon the written consent of both parties.
The initial [ * ] term of this Agreement may also be extended under the
provisions of Section 3.3(d) of this Agreement. This Agreement supersedes the
Sterilization Processing Services Agreement made and entered into as of
January 1, 1993, by Buyer and Seller, including any amendments or modifications
thereto.
2.0 PURCHASE AND SALE OF PROCESSING SERVICES; LABORATORY SERVICES.
2.1 Purchase and Sale of Processing Services. On the terms and
subject to the conditions hereinafter set forth, Buyer agrees to purchase from
Seller, and Seller agrees to perform for Buyer, [ * ] during the term of this
Agreement, including any extension thereof, [ * ] ethylene oxide and ethylene
oxide/nitrogen gas sterilization processing services for the products identified
on Schedule A (the "Products") produced at Buyer's facilities identified on
Schedule A and for which Buyer does not perform its own sterilization processing
services. Such processing services shall be provided at Seller's validated
processing facilities located in [ * ], or at such other validated facility or
facilities operated by Seller as may be mutually agreed upon by both parties.
The facilities and products identified on Schedule A currently represent [ * ]
in the United States [ * ] ethylene oxide or ethylene oxide/nitrogen gas
sterilization processing [ * ] ethylene oxide and ethylene oxide/nitrogen gas
sterilization processing from Seller for the Product produced at the unlisted
facility, provided, however, that if in doing so Buyer's transportation costs
for such Product increase more than thirty percent (30%) over the transportation
costs incurred by Buyer in purchasing sterilization processing services from
Seller for the Product produced at each facility listed on Schedule A, Buyer and
Seller shall negotiate in good faith the pricing provisions of this Agreement
with respect to the Product produced at the unlisted facility and use their best
efforts to retain the economic benefits of this Agreement for both parties with
respect to the Product produced at the unlisted facility. In the event, Buyer
develops or acquires additional products during the term of this Agreement which
require ethylene oxide or ethylene oxide/nitrogen gas sterilization, [ * ] of
such products
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to Seller under the terms and conditions of this Agreement, to the extent Buyer
does not perform its own sterilization processing of such products. Each such
additional product shall be included within the term "Products" under this
Agreement. Except as provided in Section 4.8 of this Agreement, title to and
risk of loss of the Products shall remain with Buyer at all times.
2.2 Annual and Quarterly Forecasts. Buyer will furnish Seller with
a preliminary forecast of its requirements for sterilization processing services
for each of Buyer's manufacturing facilities for each calendar year covered by
this Agreement, including its forecasted requirements for each calendar month
and quarter within each year, no later than August 1 of the preceding year. For
purposes of this Agreement, "calendar year" shall mean each year January 1
through December 31, 1996, 1997, [ * ] and the six month period [ * ].
Buyer and Seller shall meet prior to the beginning of each calendar quarter to
review and agree upon the Buyer's forecasted requirements for sterilization
processing services for the upcoming quarter, which shall include a forecast for
each week of the quarter, and to exchange other information regarding their
business relationship. Buyer will use its best efforts to spread its
requirements for sterilization processing services during a quarter evenly
throughout the quarter.
2.3 Minimum Processing Volume. (a) Seller will process [ * ] as
provided in Section 2.1 of this Agreement [ * ].
2.3 (b) Buyer agrees that during each calendar year of the initial
term of this Agreement it will purchase, at a minimum, a dollar volume of
sterilization processing services from Seller equal to the dollar amount shown
for that calendar year in the "Total" row on Schedule B. If during any calendar
year, Buyer fails to purchase a dollar volume of sterilization processing
services from Seller in excess of [ * ] of the minimum dollar volume for that
calendar year, Seller shall have the right, at its option, [ * ]. If Buyer
has fulfilled its obligations under Sections 2.1 and 2.3(a) of this Agreement,
termination of this Agreement, renegotiation of its terms and the remedies
provided in Section 3.2(c), shall be Seller's sole remedies for Buyer's failure
to purchase sterilization processing services from Seller in excess of [ * ]
of the minimum dollar volume for a calendar year. . If during any calendar
year, Buyer purchases a dollar volume of sterilization processing services from
Seller in excess of [ * ] of the minimum dollar volume for that calendar
year, Buyer shall have the right, at its option, [ * ].
2.3 (c) If this Agreement is extended beyond [ * ], Buyer and
Seller shall agree upon the minimum dollar volume for each year, or portion
thereof, during the extension.
2.3 (d) Buyer shall be free to purchase sterilization processing
services from persons other than Seller during a calendar month to the extent
that [ * ] outside sterilization processing services for its facilities inthat
month are such that Seller cannot meet the service level requirements set forth
in Sections 2.4(a) and 2.4(b) of this Agreement, provided, however, that, with
respect to each such purchase of processing services, Buyer shall first have
offered to
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Seller the opportunity to perform such processing services on the terms
provided for in this Agreement.
2.4 Service Level Requirement. (a) Seller guarantees that it shall
complete processing within the time frame set forth in Section I of Schedule E,
as established and mutually agreed upon by both Buyer and Seller during their
quarterly review of Buyer's requirements, for Products delivered by Buyer in
accordance with the then current production schedule, including load size and
applicable high build mix for the week (as agreed to by Buyer's shipping
department and Seller's facility production scheduler) and not in excess of the
product delivery forecast agreed upon for the quarter pursuant to Section 2.2
of this Agreement. In the event Buyer delivers to Seller during a week Product
in excess of the volume set forth in the forecast agreed upon pursuant to
Section 2.2, Seller agrees to use its best efforts to complete processing
within the time frame set forth in Section I of Schedule E. For purposes of
this Agreement, a working day is any day, including Saturday and Sunday, during
which the Seller's processing facility to which the Product is shipped by Buyer
is processing any product. The "turn around period" shall commence on the
working day and at the time product is received at Seller's processing facility
and shall end on the working day and at the time the product is processed and
removed from Seller's retort vessel.
2.4 (b) If Seller's facility fails to complete processing ofProduct
that is not in excess of the volume forecasted pursuant to Section 2.2 within
the specified aeration period in Schedule E, Section II and Buyer has complied
with its obligations under Sections 2.2 and 2.3, Buyer may, at its option, and
upon prior written notice to Seller, ship that Product using the dual driver
concept for fastest delivery to another of Seller's processing facilities
selected by Seller, in which event Seller agrees to complete processing of the
Product at such other facility within the specified aeration period in Schedule
E, Section II. In the event Seller is unable to process such Product at one of
its facilities, Buyer may use another vendor of processing services. Seller
shall incur any additional processing or transportation charges, including any
incremental processing and transportation costs incurred by Buyer, in connection
with the shipment and use of another of Seller's or another vendor's facility.
In the event that Buyer uses another vendor's facility pursuant to this Section
2.4(b), Seller shall be liable for any validation costs, including Buyer's labor
and transportation costs and the cost of destructible samples, incurred by
Buyer, which costs shall not exceed [ ** Confidential Treatment requested;
material filed separately with the Commission. ] per vessel or [ * ] per
facility. Product processed by another vendor under this Section 2.4(b) shall
be applied toward Buyer's minimum dollar volume requirement set forth in Section
2.3(b).
2.4 (c) Should Buyer experience a shutdown or other service
interruption at any of Buyer's in house ethylene oxide or ethylene
oxide/nitrogen gas sterilization facilities which requires Buyer to transfer
this product to any of Seller's facilities, Seller shall be obligated to process
this product with the fastest turnaround possible and on a mutually agreed upon
schedule, but Seller is not obligated to meet the requirements set forth in
Sections 2.4(a) and 2.4(b) for this overflow volume.
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2.5 Conversion of Johnson City, Tennessee and Cleveland,
Mississippi. (a) Buyer agrees that no later than July 1, 1997, it will cease
providing internal sterilization processing services at its Johnson City,
Tennessee facility and will purchase all of the sterilization processing
services formerly provided at its Xxxxxxx City facility from Seller (at a rate
of at least [ * ] of sterilization processing services per year). Buyer
agrees not to provide internal sterilization processing services at any of its
other facilities for Products sterilized at its Xxxxxxx City facility. If Buyer
complies with the obligations of this Section 2.5(a), Seller agrees to install
in its Charlotte, North Carolina facility equipment necessary to permit Seller
to meet the requirements of Schedule E, Section II with respect to the
sterilization processing services transferred from Buyer's Xxxxxxx City facility
to Seller's Charlotte facility.
2.5 (b) Buyer agrees that no later than January 1, 1997, it will
cease providing internal sterilization processing services at its Cleveland,
Mississippi facility and will purchase all of the sterilization processing
services formerly provided at that facility from Seller (at a rate of at least
[ * ] of sterilization processing services per year). Buyer agrees not to
provide internal sterilization processing services at any of its other
facilities for Products sterilized at its Cleveland facility.
2.6 Laboratory Services. Commencing no later than June 1, 1996,
Buyer shall purchase [ * ] laboratory services from Seller for the Products
receiving sterilization processing services at Seller's Ontario and Los Angeles,
California and Charlotte, North Carolina facilities, provided that Seller's
prices for laboratory services at the time Buyer commences purchasing such
services from Seller are competitive with the prices of other providers of such
laboratory services unaffiliated with Buyer. If Buyer believes that other
providers of laboratory services are offering lower prices than Seller at the
time Buyer is to commence purchasing such services from Seller, Buyer shall
provide proof of such lower prices to Seller and Seller shall have an
opportunity to meet such lower prices. Buyer agrees to use its best efforts to
purchase from Seller [ * ] laboratory services for the Products receiving
sterilization processing services at Seller's facilities in Santa Xxxxxx, New
Mexico and Willowbrook, Illinois, commencing no later than June 1, 1996. The
parties agree that the provision of laboratory services by Seller to Buyer will
result in incremental internal and/or external cost reductions for Buyer which
shall be applied against the cost savings Seller has agreed to provide Buyer for
1996 under Section 3.2 of this Agreement. The task force established pursuant
to Section 3.3 will determine the amount of internal and external cost
reductions that will be attributable to Seller's provision of laboratory
services.
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3.0 PRICES FOR PROCESSING SERVICES; PAYMENT TERMS; COST SAVINGS.
3.1 Prices, Payment Terms. (a) During the term of this Agreement,
Seller shall provide processing services to Buyer at the prices set forth in
Schedule B, provided, however, Seller shall be free to increase the prices set
forth in Schedule B at any time, upon thirty (30) days advance written notice to
Buyer, in an amount which permits Seller to fully recover any increase in the
costs of Seller due to (i) an increase in the price of the gas used by Seller in
providing sterilization processing services, (ii) an increase in the amount of
gas used by Seller in providing sterilization processing services, or (iii)
regulatory changes (including changes in taxes imposed on Seller). Increases in
the per pallet price in any calendar year due to regulatory changes shall not
exceed [ ** Confidential Treatment requested; material filed separately with
the Commission. ] of the average per pallet price during that calendar year.
Increases in the per pallet price in any calendar year due to increases in the
price of the gas used by Seller shall not exceed the greater of (x) [ * ] of
the average per pallet price under this Agreement on January 1 of that calendar
year or (y) an amount equal to the difference between [ * ] increased by
[ * ] each year, compounded, for each complete or partial calendar year since
the date of this Agreement, including the calendar year in which the price
increase is occurring, and the sum of [ * ] and the prior increases in per
pallet prices due to increases in the price of the gas used by Sellers since the
date of this Agreement. (By way of example, if the average per pallet price on
January 1, 1998 is [ * ] and [ * ] of the increase from the average per
pallet price of [ * ] at the start of the Agreement was the result of
increases in gas prices during 1996 and 1997, price increases during 1998 due to
increases in gas prices shall be limited to the greater of [ * ]. If Seller
incurs an increase in the price of gas and is unable to raise its prices to
Buyer under this Section to fully recover such increase, Seller shall have the
right to terminate this Agreement on thirty (30) days written notice to Buyer.
In the event of a reduction in the price of the gas used by Seller in providing
sterilization processing services under this Agreement, Seller agrees to reduce
its prices to Buyer in an amount equal to the reduction in the price of gas,
commencing on the effective date of the gas price reduction. All notices of
price changes to Buyer under this Section shall include documentation showing
the basis for the change.
3.1 (b) The prices set forth in Schedule B have been determined
based upon a pallet size of 40 x 48 inches or as mutually agreed upon in writing
by both parties and cycles times as set forth in Schedule A. In the event of a
cycle time increase of [ * ] or more from the times set forth in Schedule A,
Buyer and Seller shall negotiate an increase in the prices set forth in Schedule
B. Any change in pallet size must be agreed to by both parties in writing prior
to the use of such alternate pallet size.
3.1 (c) The prices provided for in this Section 3.1 do not
include taxes or the costs of shipping Products or samples to and from Seller's
facilities. Such costs shall be borne entirely by Buyer.
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3.1 (d) Seller will invoice Buyer for processing services rendered
by Seller under this Agreement. Payment of each invoice shall be made by Buyer
net thirty (30) days of the date of the invoice.
3.2 Cost Savings. (a) If Buyer complies with all of itsobligations
under Sections 2.1, 2.2, 2.3, and 2.5(a) and (b) of this Agreement, Seller
agrees to provide Buyer with incremental internal and external cost reductions
and rebates ("cost savings") totaling [ * ] during the initial term of this
Agreement. The amount of the cost savings for each calendar year during the
initial term is set forth in the "Cost Savings" row on Schedule B.
3.2 (b) (i) If the incremental internal and external cost
reductions that Seller provides Buyer for a calendar year fall below the cost
savings Seller has agreed to provide Buyer for that calendar year, Seller shall
pay to Buyer a rebate in an amount equal to the difference between the agreed
upon cost savings and the incremental internal and external cost reductions
achieved during that calendar year. Such payments shall be made within sixty
(60) days after the end of the calendar year. (ii) If the incremental internal
and external cost reductions that Seller provides Buyer for a calendar year
equal or exceed the cost savings Seller has agreed to provide Buyer for that
calendar year, no rebate shall be paid by Seller to Buyer for that calendar year
and the amount of the excess for that calendar year shall be applied against the
agreed upon cost savings for the following calendar year. If at the end of the
initial term of this Agreement, Seller has provided Buyer with cost savings in
excess of the agreed upon cost savings for the initial term, Buyer shall pay to
seller one-half of the excess. Such payment shall be made within sixty (60)
days after [ * ].
3.2 (c) (i) If Buyer's purchases of sterilization processing
services from Seller during a calendar year fall below [ * ] of the minimum
dollar volume for that calendar year, as provided in Section 2.3, the cost
savings that Seller has agreed to provide Buyer for that calendar year shall be
reduced to the amount shown on the applicable schedule B-1 through B-5. If
Seller has provided Buyer with incremental internal and external cost reductions
during the calendar year that exceed the reduced cost savings Seller has agreed
to provide Buyer for that calendar year, determined in accordance with this
Section, the excess cost savings for that calendar year shall be applied to the
agreed upon cost savings for the following calendar year or paid to Seller as
provided for in Section 3.2(b)(ii) of this Agreement. (ii) If Buyer's purchases
of sterilization processing services from Seller during a calendar year exceed
[ * ] of the minimum dollar volume for that calendar year, the cost savings
Seller has agreed to provide Buyer for that calendar year shall be increased to
the amount shown on the applicable schedule B-1 through B-5 for that calendar
year. For purposes of determining the percentage of the minimum dollar volume
of sterilization processing services purchased by Buyer from Seller during a
calendar year under this Section 3.2(c), the percentage shall be rounded to the
nearest whole percentage such that .5% or more will be rounded up to the next
higher whole number and less than .5% will be rounded down to the next lower
whole number.
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3.2 (d) Buyer and Seller agree that prior to entering into this
Agreement Seller made certain investments that will result in incremental
internal and external cost reductions for Buyer during 1996 in the amount of
[ * ]. This amount shall be applied against the cost savings Seller is
obligated to provide Buyer for 1996 and for the initial term of the Agreement as
set forth on Schedule B.
3.3 Cost Savings Task Force. (a) Seller and Buyer agree to
establish a cost savings task force that will be responsible for developing and
approving projects that will result in internal and/or external cost reductions
for Buyer in connection with the sterilization of the Products. Within 60 days
after the execution of this Agreement, each party will designate at least three
of its employees who are knowledgeable about laboratory, sterilization and
logistics to serve on the task force and will notify the other party of the
employees it designated. Each party may replace one or more of its
representatives on the task force with another of its employees knowledgeable in
laboratory, sterilization and logistics upon thirty (30) days prior written
notice to the other party. The task force shall meet at least once every
forty-five (45) days at an agreed upon location.
3.3 (b) Seller and Buyer agree to see to it that the task forceuses
its best efforts to design, develop and implement projects that will result in
internal and/or external cost reductions for Buyer. The task force shall
maintain detailed minutes of its meetings which minutes shall record, among
other matters, the task force's decisions to approve, disapprove, continue,
discontinue or modify each project considered by the task force. In addition,
the task force shall prepare a detailed written report for each project
considered by it. The report shall provide a description of the project, its
scope and its expected results, identify the representatives of each party that
will be involved in the design, development and implementation of the project,
provide a schedule and budget for each phase of the project, and estimate the
internal and external cost reductions to Buyer that will result from the
project. At each meeting, the task force shall review each project then being
designed, developed and implemented and shall revise and update the report for
each project to reflect the progress of and any changes to the project since the
preceding meeting of the task force. Seller shall maintain records for each
project detailing the engineering and research and development hours and
expenses (direct and indirect) attributable to each project.
3.3 (c) Upon completion of the implementation of each project, the
task force shall prepare a final report on the project which shall include a
detailed description of the cost of the project and the hours required to
design, develop and implement the project and the final estimate of the internal
and external cost reduction that will result to Buyer as a result of the
project. This final estimate shall be applied against the cost savings Seller
has agreed to provide Buyer in the calendar year in which implementation of the
project is completed.
3.3 (d) In the event the task force approves the implementation of
a project that requires a capital investment by Seller, Seller and Buyer agree
to negotiate an extension of
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the initial term of this Agreement, an increase in the price of sterilization
processing services provided for in Section 3.1 to compensate Seller for the
capital investment required by the project, and/or having Buyer incur all or
some portion of the capital investment required.
4.0 PERFORMANCE OF PROCESSING SERVICES.
4.1 Processing Cycle Parameters. (a) Seller agrees that each
class of the Products processed hereunder shall be processed in accordance with
the cycle parameters for such class of Products set forth in Schedule A attached
hereto. The parties agree that no cycle parameters will provide for gas
concentration in excess of [ * ] mg/L unless the parties agree on the pricing
for such gas concentration. Buyer may modify the cycle parameters for any class
of Products from time to time and the parties may agree upon additional cycle
parameters for new classes of Products. No cycle parameters, modifications or
additions shall become effective and binding upon the parties until the cycle
parameters, modifications or additions and the pricing therefore have been
agreed upon in a writing signed by both parties.
(b) In the event Seller becomes aware that it has failed in any
respect to process any of the Products in accordance with the applicable cycle
parameters, Seller shall notify Buyer of such nonconformity no later than the
work day following Seller's discovery of such nonconformity. In the event a
facility of Seller fails to process in accordance with applicable cycle
parameters Products accounting for in excess of the percentage specified in
Schedule E, Section III, of Products processed by that facility, Buyer may
charge Seller an amount for each variation above the specified percentage to
reflect the actual additional cost Buyer incurs in labor and testing not to
exceed [ * ].
4.2 Validation of Processing Cycle Parameters. In accordance with
Food and Drug Administration requirements, Buyer shall have exclusive
responsibility for the validation of processing cycle parameters for each class
of the Products prior to the commencement of commercial processing of such
class.
4.3 Shipment of the Products by Buyer. Buyer will assemble the
Products on slip sheets or pallets and the Products shall be accompanied by
documents setting forth the facility from which the Products are shipped, the
number of shipping cartons in the shipment by product code and part number or
catalog number, the date of the shipment and the type of sterilization
processing required (100% ethylene oxide or EtO Nitrogen). Upon receipt of a
shipment, Seller will complete a Receiving Report on the shipment. If each
batch count received is not identical to that shown on shipping papers as having
been shipped by Buyer, Seller shall notify Buyer of any discrepancy and it shall
be Buyer's responsibility to locate the lost material and, if necessary, to
notify the appropriate government agencies. No material in any batch is to be
processed, and the provisions of Section 2.4 shall not apply, until both parties
are in agreement as to the exact count. Buyer agrees to supply Seller with five
(5) copies of a material safety data sheet ("MSDS") complying with 29 CFR
1900.1200(g) with the first shipment of any hazardous chemical to Seller, and
with the first shipment following each and every revision to
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the MSDS. Upon Seller's signed receipt of shipment, Seller will be responsible
for the total count of the Products including biological indicators (test
packs) while said Products are in Seller's possession.
4.4 Use of Biological Indicators or Product Samples. In the event
Buyer desires to use microbiological test packs, indicators or product samples,
it shall furnish to Seller comprehensive instructions regarding the procedures
of their placement and their removal, packaging and shipment to a testing
laboratory for analysis, and the procedure for the removal, handling, marking
and disposition of any shipment of the Products which includes microbiological
test packs, indicators or product samples and Seller agrees to comply with such
instructions. Such test packs, indicators or samples shall be conspicuously
marked by Buyer and shall be dispersed at selected locations through each
shipment during processing in accordance with Buyer's specifications. Buyer
will be responsible for all expenses of testing, including shipment to and from
any testing laboratory and any sterility audit of the laboratory.
4.5 Records of Processing. (a) Seller shall provide Buyer on a
daily work day basis a log of Buyer's product at Seller's locations showing the
status of product within Seller's locations. Buyer will furnish an originating
document providing load number and catalog number. The log shall include, but
not be limited to, the following information in the format indicated below:
LOAD LOT NUMBER DATE RECEIVED VACUGAS NUMBER PRETEMP DATE CYCLE STOP DATE B.I.* PULL DATE TURN-AROUND TIME
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*Where preferred by Buyer
The log shall be transmitted to Buyer via Seller's fax and may be changed or
added to as mutually agreed to by Buyer and Seller.
4.5 (b) Seller shall provide Buyer with weekly and monthly turntime
reports and monthly non-conformance reports for each of Seller's facilities, and
for all facilities combined, that provided sterilization processing services to
Buyer during the period covered by the report.
4.6 Shipment of the Products by Seller. Seller agrees that upon
completion of processing, Seller's facilities can be used as a shipping point
for processed Products to locations determined by Buyer. Seller shall cause
the Products to be shipped in accordance with Buyer's written instructions and
Buyer shall pay all shipping charges. On all shipments of Products to be
shipped to a location other than one of Buyer's facilities, in addition to
paying all shipping charges, Buyer shall reimburse Seller for all direct and
indirect expenses incurred by Seller in preparing the shipments, including
labor and material handling expenses. When shipping the Products, Seller shall
include documents specifying the number of units in the shipment by product
code and lot number. In the event that Buyer has notified Seller that Buyer's
Product is
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released for shipment from Seller, Seller is solely responsible for notifying
the common carrier within [ * ] from the time of notification of
release by Buyer.
4.7 Storage of the Products by Seller. Buyer will remove Product
from Seller's processed product warehouse expeditiously after processing, but
Buyer may store Product in Seller's processed product warehouse area for a
maximum of [ * ] after sterile release without extra charges for storage.
Thereafter, Seller may charge Buyer for storage in Seller's warehouse or in an
outside warehouse selected by Seller at the prevailing rate for such services
and Seller shall have the option of returning such Product to Buyer at Buyer's
expense, provided Buyer has not previously given Seller shipping instructions
for such Product.
4.8 Product Damage Caused by Seller. If Product is damaged bySeller
as a result of Seller's failure to adhere to the parameters set forth in
Schedule A or by physical mishandling by Seller, Seller shall be responsible to
Buyer for the entire costs of the Product, billed to Seller at Buyer's
established manufacturing cost. Buyer will make every effort to keep cost to a
minimum by refurbishing and/or repackaging wherever feasible.
4.9 Buyer's Access to Seller's Facilities. During routine ethylene
oxide processing, Seller will allow authorized Buyer personnel to observe the
process, monitor procedures and have access to pertinent sterilization process
records. Buyer personnel may be present throughout the qualification period.
All visits to Seller's facilities by Buyer personnel will be prearranged with
Seller's Plant Manager.
4.10 Buyer's Access to Processing Records. Upon request, Seller
shall send Buyer duplicate copies of all sterilization processing records deemed
necessary by Buyer along with microbiological test packs (if required), upon
completion of sterilization process cycles, including degassing.
4.11 Non-sterile Markings. Buyer agrees that it will ship each
pallet, carton or other designated unit of the Products completely covered and
conspicuously marked to show its "non-sterile" nature. Such marking must be
sufficiently secure to prevent its accidental removal prior to release of the
Products from quarantine by Buyer. After the processing has been completed,
Seller will attach to each pallet, carton or other container of such Products a
label bearing the following works: "VACUGAS Treated - Awaiting Sterility Test
Results." Buyer agrees that it will leave this label attached to each pallet,
carton or other container of the Products, and will keep each such pallet,
carton or other container in quarantine, until it has received a certificate of
specification compliance from its testing laboratory. As provided in Section
4.6, Seller agrees, upon authorization by Buyer, to release and ship product
after sterilization. Seller will develop a standard procedure to remove all of
Buyer's and Seller's labels showing "non-sterile" status and "Awaiting Sterility
Test Results". If non-compliance by Seller occurs, Seller shall audit the
respective facility within two (2) weeks and provide documentation of audit
results to Buyer.
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4.12 Compliance with Laws. (a) Each of the parties agrees at all
times to conduct its operations in compliance with the applicable requirements
of 21 Code of Federal Regulations Part 801.150 ("Medical devices; processing,
labeling, or repackaging") and 21 Code of Federal Regulations Part 820 ("Good
Manufacturing Practice for Medical Devices: General") or any successor
regulations. Seller agrees to obtain and keep current all applicable licenses
and permits required by applicable laws and regulations for the operation of its
plants that engage in processing under this Agreement. Seller will notify Buyer
in January of each calendar year that all applicable licenses and permits have
been obtained and are current.
(b) Buyer acknowledges that the State of California has determined
that ethylene oxide is a carcinogen and a reproductive toxin, and that it is so
listed under California's Safe Drinking Water and Toxic Enforcement Act of 1986
("Proposition 65"). The presence of ethylene oxide or other gas residues in the
Products following sterilization processing may require warning labels under
Proposition 65 or similar "right to know" laws in other states. Buyer agrees to
comply with any and all federal state and local labeling requirements.
4.13 FDA Visits to Seller's Facilities. Seller shall notify Buyer
in writing within twenty-four (24) hours of an FDA investigation or audit of any
of Seller's facilities where Seller is processing Buyer's Products. Seller
shall notify Buyer of an FDA request to review any documents, Products or
practices pertaining to Buyer. Seller agrees to provide copies of all documents
reviewed by the FDA pertaining to Buyer or Buyer's Products. Seller will
provide, within two (2) weeks from the date of exit interviews, copies of FDA
investigation/audit reports and Seller's response to FDA for facilities at which
Seller is processing Buyer's Products.
5.0 CONFIDENTIAL INFORMATION. Buyer and Seller each acknowledges that, in
the course of performing its obligations pursuant to this Agreement, it may
obtain certain confidential and/or proprietary information belonging to the
other party, its affiliates or customers. Subject to the exceptions set forth
in this Section, each party agrees that information provided to it in writing
or reduced to writing within thirty (30) days after its communication to the
receiving party and which has been marked "confidential" shall be received in
strict confidence, shall be used only for the purpose of this Agreement and
shall not be disclosed by the receiving party, its agents or employees without
the prior written consent of the disclosing party, except as may be necessary
by reason of legal and regulatory requirements beyond the receiving party's
reasonable control. This obligation of confidentiality shall survive
termination of this Agreement but shall not apply to information which is (i)
publicly known or becomes publicly known through no act of the receiving party;
(ii) rightfully received from a third party; (iii) independently developed; or
(iv) already known to the receiving party. Each party agrees that any
information disclosed to it prior to the execution and delivery of this
Agreement shall be subject to and governed by the terms of this Section.
6.0 LIMITATION OF LIABILITY; INDEMNIFICATION
6.1 Obligation of Seller. (a) The parties agree that Seller's
obligation under this Agreement is limited to processing the Products in
accordance with the cycle parameters referred to in Section 4.1 hereof. Buyer
acknowledges that many factors beyond Seller's control can
--------------
* Confidential Treatment requested; material filed separately with the
Commission.
11
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affect the ultimate microbiological condition of the Products. Among these are
the quality, type and original bioburden of the Products and their packaging,
the atmospheric humidity in the packaging room, the configuration of the
Products, the material of construction of the Products, the adequacy of the
testing laboratory atmosphere and equipment, the competence of testing
laboratory personnel, the competence and adequacy of sampling techniques, and
the care and handling of the Products during warehousing and distribution.
BUYER ACKNOWLEDGES AND AGREES THAT BUYER IS SOLELY AND EXCLUSIVELY RESPONSIBLE
FOR THE VALIDATION OF STERILIZATION PROCESSING AND PRODUCT STERILITY ASSURANCE,
THE INTEGRITY OF PRODUCT PACKAGING AND THE ADEQUACY OF PRODUCT LABELING.
SELLER MAKES NO REPRESENTATION, GUARANTEE, OR WARRANTY, EXPRESSED OR IMPLIED,
WITH RESPECT TO THE STERILITY OF THE PRODUCTS WHICH ARE PROCESSED HEREUNDER.
(b) The parties agree that Buyer's sole and exclusive remedy in the
event of Seller's failure to process the Products in accordance with the cycle
parameters referred to in Section 4.1 shall be the remedies provided in Section
4.1(b) and 4.8. In no event shall Seller be liable for special, indirect,
incidental, or consequential damages, including but not limited to damages
arising from death, bodily injury, property damage other than damage to the
Products, loss of profits or revenue or loss of use of the Products.
6.2 Indemnification. (a) Buyer agrees to indemnify and save
Seller harmless from and against all expenses, losses, costs, deficiencies,
liabilities and damages, including reasonable attorneys' fees and expenses
(collectively, "damages") incurred or suffered by Seller arising out of or in
connection with (i) any breach by Buyer of any of its covenants or agreements
made in this Agreement, (ii) the processing of the Products, except to the
extent such damages are caused by negligent acts or omissions of Seller, or
Seller's failure to comply with the provisions of this Agreement, or (iii) any
claim that the Products are not sterile.
(b) Seller agrees to indemnify and save Buyer harmless from and
against all damages incurred or suffered by Buyer arising out of or in
connection with (i) any breach by Seller of any of its covenants or agreements
made in this Agreement and (ii) any negligent acts or omissions of Seller in the
processing of the Products.
7.0 TERMINATION
7.1 Termination for Material Breach. Upon the material breach of
any obligation under this Agreement by either party, the aggrieved party may
give to the defaulting party notice of such breach, which notice shall specify
the exact nature of the breach and shall expressly state the aggrieved party's
intention to terminate this Agreement in the event the breach is not remedied
within ninety (90) days after the receipt of such notice. If after the
expiration of such period, the defaulting party has failed or refuses to remedy
such breach, this Agreement may be terminated forthwith, effective upon notice
given by the aggrieved party to the defaulting party. The right of either party
to terminate this Agreement in the event of a breach hereof by the other party
is not an exclusive remedy for such breach, and, except as provided in Sections
2.3(b) and 6.1(b), either party shall also be entitled to any other remedy
--------------
* Confidential Treatment requested; material filed separately with the
Commission.
12
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available under the laws of any applicable jurisdiction. This Agreement may
also be terminated by Seller or Buyer pursuant to Section 2.3(b).
7.2 No Waiver of Termination Rights. Any delay by either party
in sending any of the notices specified in Section 7.1 shall not constitute any
waiver of the sending party's right to terminate this Agreement.
7.3 Termination Not Unfair or Abusive. The parties agree that any
termination hereof according to the formalities specified herein, and based on
the conditions required by the provision under which such termination is
effected, shall not constitute an unfair or abusive termination or create any
liability not set forth in this Agreement of the terminating party to the other
party.
7.4 Survival of Certain Rights and Obligations. Neither the
expiration nor any termination of this Agreement for whatever cause shall affect
any rights or obligations of either party which have accrued as of the effective
date of such expiration or termination, nor shall it affect any rights or
obligations of either party which are intended by the parties to survive such
expiration or termination, including without limitation the rights and
obligations of the parties under Sections 5.0, 6.1, and 6.2 hereof.
8.0 GENERAL PROVISIONS
8.1 Notices. Any notice, request, information or other document to
be given hereunder to any of the parties by any other party shall be in writing
and delivered personally or sent by registered or certified mail, postage
prepaid, as follows:
If to Buyer, addressed as follows:
Xxxxxx Healthcare Corporation
Baxter Convertors/Custom Sterile
0000 Xxxxxxxx Xxxx, Xxxx. X
XxXxx Xxxx, Xxxxxxxx 00000
Attn.:Director of Distribution Logistics
Custom Sterile
If to Seller, addressed as follows:
Xxxxxxxx Micro Science, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxx 00000
Attn.: Xxxxx Xxxxx, Vice President Sales and Marketing
Any party may change the address to which notices hereunder are to be sent to
it by giving written notice of such change of address in the manner herein
provided for giving notice. Any notice delivered personally shall be deemed to
have been given on the date it is so delivered, and
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any notice delivered by registered or certified mail shall be deemed to have
been given on the date it is received.
8.2 No Waiver. The failure of either party hereto at any time to
require performance by the other party of any provision of this Agreement shall
in no way affect the right of such party to require performance of that
provision, and any waiver by either party of any breach of any provision of this
Agreement shall not be construed as a waiver of any continuing or succeeding
breach of such provision, a waiver of the provision itself or a waiver of any
right under this Agreement.
8.3 Governing Law. The validity, construction, interpretation and
enforcement of this Agreement, or any breach thereof, shall be governed by the
laws of the State of Illinois applicable to contracts made and to be performed
in that State.
8.4 Entire Agreement. This Agreement constitutes the final written
expression of the terms of agreement between the parties relating to the
subject matter contained herein and is the complete and exclusive statement of
these terms. This Agreement supersedes all prior agreements with respect to
such subject matter and merges all prior discussions between the parties. All
references to this Agreement shall be deemed to include the schedules hereto.
No provision in any purchase order or purchase order confirmation, whether
entered into prior to, concurrently with or after the execution and delivery of
this Agreement, shall be effective to the extent that such provision is
inconsistent with any provision of this Agreement
8.5 Amendments. This Agreement may be amended only by a writing
signed by a duly authorized representative of each party.
8.6 Severability. The provisions of this Agreement shall be deemed
severable, and the invalidity, unenforceability or illegality of any provision
of this Agreement shall not in any way affect or impair the validity,
enforceability or legality of the other provisions hereof.
8.7 Force Majeure. Neither party shall be liable to the other for
any delay or default in performance of any obligation under this Agreement
rising from causes beyond its control, including without limitation fire, storm,
flood, earthquake, explosion, accident, acts of public enemies, war, rebellion,
insurrection, sabotage, epidemic, quarantine restrictions, labor disputes or
shortages, transportation embargo, or failure or delays in transportation,
inability to secure gas, acts of Good, or acts of any governmental authority or
agency thereof. If one of Seller's facilities is shut down for a period of time
pursuant to the Occupational Safety and Health Administration ("OSHA")
Regulation 29 CFR Part 1910 or the environmental regulations of any state and
the facility cannot continue processing for Buyer, Seller shall utilize any of
its other processing facilities and shall be solely responsible for any
additional processing and transportation costs resulting therefrom during the
period of the shut down.
8.8 Assignment. (a) Except as provided in subsection (b) of this
Section, this Agreement is not assignable by either party without the prior
written consent of the other party hereto, which consent shall not be
unreasonably withheld, provided, however, either party may assign its rights
and delegate its obligations hereunder to an affiliate of the party. For
purposes
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of this Agreement the term "affiliate" means, with respect to a specified
person, any other person which directly, or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with,
the person specified.
8.8 (b) Xxxxxx International Inc. ("Baxter") has publiclyannounced
its intention to spin off certain of its businesses as a separate corporation
(referred to until such time as a definitive name is announced as "NewCo"). It
is anticipated that NewCo will own the facilities listed on Schedule A, which
use or will use Seller's sterilization processing services. Buyer agrees to
assign this Agreement to NewCo and to cause NewCo to accept the assignment and
to comply with the terms and conditions of this Agreement. If some of the
business units that use Seller's sterilization processing services are retained
by Xxxxxx, Xxxxxx may, at its option, execute a separate unrelated agreement
with Seller.
8.9 Binding Agreement. Subject to the provisions of Section 8.8
hereof, this Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors and assigns.
8.10 Relationship. This Agreement does not create an agency
relationship or partnership between the parties, each party is an independent
contractor.
8.11 EEO Information. Seller is aware of and will comply with
applicable State and Federal laws and regulations that pertain to small business
and equal employment opportunity as attached hereto as Schedule D.
8.12 Schedules. The following schedules are attached to this
Agreement and are incorporated herein:
1. Schedule A: Process Control Standards (listed separately for
each of Buyer's manufacturing facilities).
2. Schedule B: [ * ]
3. Schedules B-1 through B-5: [ * ]
4. Schedule C: Continuing Guaranty, dated 9/28/87 (page 1 of 1).
5. Schedule D: EEO Information
6. Schedule E: Performance Criteria Schedule
In the event of any conflict between the express provisions of the
Schedule C and of this Agreement, the provisions of this Agreement shall
control.
---------------
* Confidential Treatment requested; material filed separately with the
Commission.
15
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their respective duly authorized officers as of the date first above
written.
XXXXXX HEALTHCARE CORPORATION XXXXXXXX MICRO SCIENCE, INC.
By: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxxxx X. Xxxx
------------------------------------- -----------------------------------
Title: Vice President of Manufacturing Title: President and C.E.O.
---------------------------------------- -------------------------------
Its duly authorized officer Its duly authorized officer
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SCHEDULE A
PROCESS CYCLE SPECIFICATIONS
GMS LOCATION BAXTER DIVISION BAXTER LOCATION PRODUCTS
------------ --------------- --------------- --------
[ * ] Baxter Custom Sterile [ * ]
[ * ] Xxxxxx Healthcare [ * ]
[ * ] Baxter Convertors [ * ]
[ * ] Baxter Custom Sterile [ * ] Kits
[ * ] Baxter Custom Sterile [ * ] Kits
[ * ] Baxter Custom Sterile [ * ] Kits
[ * ] Baxter Custom Sterile [ * ] Kits
---------------
*Confidential Treatment requested; material filed separately with the
Commission.
18
+
[ * ]
---------------
*Confidential Treatment requested
+ 34 pages omitted.
19
SCHEDULE C
CONTINUING GUARANTEE
Seller guarantees that it will process Buyer's product according to Buyer's
specifications set forth in Schedule A and the terms and conditions of this
Agreement.
Seller will furnish to Xxxxxx Healthcare Corporation a Certificate of Insurance
evidencing the following insurance:
- Comprehensive general liability with contractual liability
coverage in the amounts of not less than $3,000,000 per occurrence,
combined single limit.
- Statutory only workers compensation coverage.
- Employer liability in the amount of $500,000.
- Auto liability coverage in the amount of $1,000,000.
Evidence of insurance should be forwarded to Director of
Logistics/Distribution, Baxter Custom Sterile, 0000 Xxxxxxxx Xxxx - Xxxxxxxx X,
XxXxx Xxxx, Xxxxxxxx 00000.
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BAXTER SCHEDULE D
================================================================================
As a federal government contractor, Xxxxxx Healthcare Corporation, and its
affiliates are required to include in their subcontracts, vendor agreements and
supply contracts certain additional clauses and provisions imposed by federal
regulations. Contractor hereby agrees to the following terms and conditions
applicable to its agreements with Xxxxxx Healthcare Corporation or its
affiliates.
I. EQUAL EMPLOYMENT OPPORTUNITY CLAUSE (Applies To Contracts Of $10,000 Or
More)
During the performance of this contract, the Contractor agrees to the
provisions of the Equal Employment Opportunity Clause contained in
Executive Order 11246 of September 24, 1965 and incorporated in 41 CFR
60-1.4(a).
II. EMPLOYMENT OF VETERANS (Applies To Contracts Of $10,000 or More)
During the performance of this contact, the Contractor agrees to comply
with the federal Vietnam Era Veterans Readjustment Act and provisions of 41
CFR 60-250.4 regarding equal employment opportunity for veterans.
III. EMPLOYMENT OF HANDICAPPED PERSONS (Applies To Contracts Of $25,000 Or
More) During the performance of this contract, the Contractor agrees to
comply with the provisions of the Rehabilitation Act of 1973 and with the
provisions of 41 CFR 60.741.4 regarding equal employment opportunities for
handicapped persons.
IV. UTILIZATION OF SMALL BUSINESS AND SMALL DISADVANTAGED BUSINESS CONCERNS
(Applies To Contracts Over $10,000)
(a) It is the policy of the United States that small business concerns
owned and controlled by socially and economically disadvantaged
individuals shall have the maximum practicable opportunity to participate
in the performance of contracts let by any Federal Agency.
(b) The contractor hereby agrees to carry out this policy in the
awarding of subcontracts to the fullest extent consistent with the
efficient performance of this
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contract. The contractor further agrees to cooperate in any studies or
surveys as xxx be conducted by the Small Business Administration or the
contracting agency which may be necessary to determine the extent of
the contractor's compliance with the clause.
(c) (1) As used in this contact, the term "small business concern" shall
mean a small business as defined pursuant to section 3 of the Small
Business Act and relevant regulations promulgated pursuant thereto.
(2) The term "small business concern owned and operated by socially and
economically disadvantaged individuals" shall mean a small business
concern -
(i) which is at least 51 per centum owned by one or more socially and
economically disadvantaged individuals; or in the case of any public owned
business, at least 51 per centum of the stock of which is owned by one or
more socially and economically disadvantaged individuals; and
(ii) whose management and daily business operations are controlled by one
or more of such individuals. The contractor shall presume that socially
and economically disadvantaged individuals include Black Americans,
Hispanic Americans, Native Americans, Asian-Pacific Americans, and other
minorities, or any other individual found to be disadvantaged by the Small
Business Administration pursuant to section 8 (a) of the Small Business
Act.
(d) Contractors acting in good faith may rely on written representations
by their subcontractors regarding their status as a small business concern
owned and controlled by socially and economically disadvantaged
individuals.
All solicitations for negotiated for formally advertised contracts or
amendments or modifications (including contracts, amendments, and modifications
placed on a sole source basis), except those for procurement and setasides
pursuant to section 8 (a) and section 15 of the Small Business Act as amended
which individually are expected to exceed $5,000,000, or in the case of
contracts for the construction of any public facility, $1,000,000, and are
required to include the clause entitled Utilization of Small Business Concerns
and Small Business Concerns Owned and Controlled by Socially and Economically
Disadvantaged Individuals, shall include a provision which requires the
apparent successful offeror, provided the offeror is not a small business
concern, to negotiate a detailed subcontracting plan. The provision is as
follows:
1. This provision does not apply to small business concerns.
2. The term "subcontract" means any agreement (other than one
involving an employer/employee relationship) entered into by a
Federal Government prime contractor or subcontractor calling for
supplies or services required for the performance of the original
contract or subcontract.
3. The offeror acknowledges that it is aware of the subcontracting plan
requirements in this provision, and if it is the apparent successful
offeror, and if the contract offers subcontracting possibilities,
agrees to negotiate or offer a plan which includes:
a. Percentage goals (expressed in terms of percentage of total
planned subcontracting dollars) for the utilization as
subcontractors of small business
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concerns owned and controlled by socially and economically
disadvantaged individuals; (for the purposes of the subcontracting
plan, the contractor may include all purchases which contribute to
the performance of the contract, including a proportionate share of
products, services, etc., whose costs are normally allocated as
indirect or overhead costs.)
As part of its establishment of percentage goals, the apparent
successful offeror shall also include in its subcontracting plan:
(1) A statement of: (a) total dollars planned to be subcontracted;
(b) total dollars planned to be subcontracted to small business;
and (c) total dollars planned to be subcontracted to small
disadvantaged business.
(2) A description of the principal product and service areas to be
subcontracted and an identification of those areas where it is
planned to use (i) small business subcontractors, and (ii) small
disadvantaged business subcontractors.
(3) A statement of the method used in developing proposed
subcontracting goals for (i) small business, (ii) small
disadvantaged business concerns.
(4) If the offerer includes indirect and overhead costs as an
element in establishing the goals in the subcontracting plan, the
method used in determining the proportionate share of indirect and
overhead costs incurred with (i) small business, and (ii) small
disadvantaged business subcontractors shall be explained.
b. The name of an individual within the employ of the offeror who
will administer the subcontracting program of the offeror and a
description of the duties of such individuals;
c. A description of the efforts of the offeror will take to assure
that small business concerns and small business concerns owned and
controlled by socially and economically disadvantaged individuals
will have an equitable opportunity to compete for subcontracts;
d. Assurances that the offeror will include the clause entitled
Utilization of Small Business Concerns and Small Business Concerns
Owned and Controlled by Socially and Economically Disadvantaged
Individuals in all subcontracts which offer further subcontracting
opportunities and to require all subcontractors (except small
business concerns) which receive subcontracts in excess of
$5,000,000, or in the case of a contract for the construction of
any public facility, $1,000,000, to adopt and comply with a plan
similar to the plan agreed to by the offeror. Such assurances
shall describe the offeror's procedures for the review, approval,
and monitoring for compliance with such plans;
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e. Assurances that the offeror will submit such periodic reports
and cooperate in any studies or surveys as xxx be required by the
contracting agency or the Small Business Administration in order to
determine the extent of compliance by the offeror with
subcontracting plan; and
f. A recitation of the types of records the offeror will maintain
to demonstrate procedures which have been adopted to comply with
the requirements and goals set forth in the plan, including the
establishment of source lists of small business concerns and small
business concerns owned and controlled by socially and economically
disadvantaged individuals; and efforts to identify and award
subcontracts to such small business concerns. The record shall
include at least the following (these records xxx be maintained on
a plantwide of companywide basis unless otherwise indicated):
(1) Small and disadvantaged business source list, guides and other
data identifying small and small disadvantaged business vendors.
(2) Organizations contacted for small and disadvantaged business
sources.
(3) On a contract-by-contract basis, records on all subcontract
solicitations over $1,000,000, indicating on each solicitation (a)
whether small business was solicited, and if not, why not; (b)
whether small disadvantaged business was solicited, and if not, why
not; and (c) reasons for the failure of solicited small business or
small disadvantaged business to receive the subcontract award.
(4) Records to support other outreach efforts:
o Contacts with minority and small business associations;
o Contacts with business development organizations;
o Attendance at small and minority business procurement
conferences and trade fairs.
(5) Records to support internal activities to guide and encourage
buyers:
o Workshops, seminars, training programs, etc.
o Monitoring activities to evaluate compliance.
(6) On a contract basis, records to support award data submitted to
the Government to include name and address of subcontractor.
4. The offeror understands that:
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a. No contract will be awarded unless and until an acceptable plan
is negotiated with the contracting officer which plan will be
incorporated into the contract, as a material pert thereof.
b. An acceptable plan must, in the determination of the contracting
officer, provide the maximum practicable opportunity for small
business concerns and small business concerns owned and controlled
by socially and economically disadvantaged persons to participate
in the performance of the contract.
c. If a subcontracting plan acceptable to the contract officer is
not negotiated within the time limits prescribed by the contracting
activity and such failure arises out of causes within the control
and with the fault or negligence of the offeror, the offeror shall
be ineligible for an award. The contracting officer shall notify
the contractor in writing of his reasons for determining a
subcontracting plan to be unacceptable. Such notice shall be given
early enough in the negotiation process to allow the contractor to
modify the plan within the time limits prescribed.
d. Prior compliance of the offeror with other such subcontracting
plans under previous contracts will be considered by the
contracting officer in determining the responsibility of the
offeror for award of the contract.
e. It is the offeror's responsibility to develop a satisfactory
subcontracting plan with respect to both small business concerns and
small business concerns owned and controlled by socially and
economically disadvantaged individuals and that each such aspect of
the offeror's plan will be judged independent of the other.
f. The offeror will submit, as required by the contracting officer,
subcontracting reports in accordance with the instructions thereon,
and as further directed by the contracting officer. Subcontractors
will also submit these reports to the government's contracting
officer or as otherwise directed, with a copy to the prime
contractor's designated small and disadvantaged business liaison.
5. The failure of any contractor or subcontractor to comply in
good faith with (a) the clause entitled Utilization of Small
Business Concerns and Small Business Concerns Owned and Controlled
by Socially and Economically Disadvantaged Individuals or (b) an
approved plan required by this Small Business and Small
Disadvantaged Business Subcontracting Plan (Negotiated) provision,
will be a material breach of such contract or subcontract.
V. UTILIZATION OF WOMEN-OWNED BUSINESS CONCERNS (Applies To Contracts Over
$10,000)
(a) It is the policy of the United States Government that women-owned
businesses shall have the maximum practicable opportunity to participate
in the performance of contracts awarded by any Federal agency.
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(b) The Contractor agrees to use his best efforts to carry out this
policy in the award of subcontracts to the fullest extent consistent with
the efficient performance of this contract. As used in this contract, a
"women-owned business" concern means a business that is at least 51%
owned by a woman or women who also control and operate it. "Control" in
this context means exercising the power to make policy decisions.
"Operate" in this context means being actively involved in the day to day
management. "Women" mean all women business owners.
The following clause shall be included in all contracts, amendments or
modifications expected to exceed $5,000,000 or in the case of contracts for the
construction of any public facility, $1,000,000 which require the Utilization
Clause in (1) above:
(A) The Contractor agrees to establish and conduct a program
which will enable women-owned business concerns to be considered
fairly as subcontractors and suppliers under this contract. In this
connection, the contractor shall:
(1) Designate a liaison officer who will administer
the Contractor's "Women-Owned Business Concerns Program."
(2) Provide adequate and timely consideration of the
potentialities of know women-owned business concerns in all
"make-or-buy" decisions.
(3) Develop a list of qualified bidders that are women-owned
businesses and assure that known women-owned business concerns
have an equitable opportunity to compete for subcontracts,
particularly by making information on forthcoming opportunities
available by arranging solicitations, time for the preparation
of bids, quantities, specifications, and delivery schedules so
as to facilitate the participation of women-owned concerns.
(4) Maintain records showing (i) procedures which have been
adopted to comply with the policies set forth in this clause,
including the establishment of a source list of women-owned
business concerns; (ii) awards to women-owned businesses on the
source list by minority and nonminority women-owned business
concerns; and (iii) specific efforts to identify and award
contracts to women-owned business concerns.
(5) Include the "Utilization of Women-Owned Business
Concerns" clause in subcontracts which offer substantial
subcontracting opportunities.
(6) Cooperate in any studies and surveys of the
Contractor's women-owned business concerns procedures and
practices that the Contracting Officer may from time-to-time
conduct.
(7) Submit periodic reports of subcontracting to women-owned
business concerns with respect to the records referred to in
subparagraph (4) above,
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in such form and manner and at such time (not more often than
quarterly) as the Contracting Officer may prescribe.
(B) The Contractor further agrees to insert, in any subcontract
hereunder which may exceed $5,000,000 or $1,000,000 in the case of
contracts for the construction of any public facility and which
offers substantial subcontracting possibilities, provisions which
shall conform substantially to the language of this clause,
including this paragraph (B), and to notify the Contracting Officer
of the Names of such subcontractors.
(C) The contractor further agrees to require written
certification by its subcontractors that they are bona fide
women-owned and controlled business concerns in accordance with the
definition of women-owned business concern as set forth in the
Utilization Clause 1(b) above at the time of submission of bids or
proposals.
VI. UTILIZATION OF LABOR SURPLUS AREA CONCERNS (Applies To Contracts Over
$10,000)
(A) It is the policy of the Government to award contracts to
labor surplus area concerns that (1) have been certified by the
Secretary of Labor (hereafter referred to respectively as certified
concerns with a first or second preference) regarding the employment
of proportionate number of disadvantaged individuals and have agreed
to perform substantially (i) in or near sections of concentrated
unemployment or underemployment or in persistent or substantial
labor surplus areas or (ii) in other areas of the United States; or
(2) are noncertified concerns which have agreed to perform
substantially in persistent or substantial labor surplus areas,
where this can be done consistent with the efficient performance of
the contract and at prices no higher than are obtainable elsewhere.
The Contractor agrees to use its best efforts to place its
subcontracts in accordance with this policy.
(B) In complying with paragraph (A) of this clause, the Contractor in
placing its subcontracts shall observe the following order of
preference: (1) certified concerns with a first preference which are
also small business concerns, (2) other certified concerns with a
first concerns, (3) certified concerns with a second preference which
are also small business concerns, (4) other certified concerns with a
second preference, (5) persistent or substantial labor surplus area
concerns which are also small business concerns, (6) other persistent
or substantial area concerns, and (7) small business concerns which
are not labor surplus area concerns.
The Contractor further agrees that the following clause shall be included
in all contracts which may exceed $500,000 which contain the clause
required above and which, in the opinion of the procuring activity, offer
substantial subcontracting possibilities. Furthermore, prime contractors
who are to be awarded contracts which may not exceed
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$500,000 but which, in the opinion of the procuring activity, offer
substantial subcontracting possibilities, shall be urged to accept this
clause.
(A) The Contractor agrees to establish and conduct a program
which will encourage labor surplus area concerns to compete for
subcontracts within their capabilities. In this connection, the
Contractor shall -
(1) Designate a liaison with duly authorized
representatives of the Government on labor surplus area
matters, (ii) supervise compliance with the Utilization of
Concerns in Labor Surplus Areas clause, and (iii) administer
the Contractor's "Labor Surplus Area Subcontracting Program";
(2) Provide adequate and timely consideration of the
potentialities of labor surplus area concerns in all
"make-or-buy" decisions;
(3) Assure that labor surplus area concerns will have
an equitable opportunity to compete for subcontracts,
particularly by arranging solicitations, time for the
preparation of bids, quantities, specifications, and delivery
schedules so as to facilitate the participation of labor
surplus area concerns;
(4) Maintain records showing procedures which have been adopted to
comply with the polices set forth in this clause. Records
maintained pursuant to Government until the expiration of one
year after the award of this contract, or for such longer
periods as may be required by any other clause of this contract
or by applicable law or regulations; and
(5) Include the Utilization of Concerns in Labor Surplus Areas
clause in subcontracts which offer substantial labor surplus
area subcontracting opportunities.
(B) A "labor surplus area concern" is a concern that (1) has been
certified by the Secretary of Labor (hereafter referred to as a
certified-eligible concern) regarding the employment of a
proportionate number of disadvantaged individuals and has agreed to
perform substantially in or near sections of concentrated
unemployment or underemployment, in persistent or substantial labor
surplus areas, or in other areas of the United States, or (2) is a
noncertified concern which has agreed to perform a substantial
proportion of a contract in persistent or substantial labor surplus
areas. A certified-eligible concern shall be deemed to have
performed a substantial proportion of a contract in or near sections
of concentrated underemployment, in persistent or substantial labor
surplus areas, or in other areas if the costs that concern will
incur on account of manufacturing or production in or near such
sections or in such areas (by itself, if a certified concern, or by
certified concerns action as fist-tier subcontractors) amount to
more than 25
8
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percent of the contract price. A concern shall be deemed to have
performed a substantial proportion of a contract in persistent or
substantial labor surplus areas (by itself or its first-tier
subcontractors) if the costs that the concern will incur on account
of production or manufacturing in such areas amount to more than 50
percent of the contract price.
(C) The Contractor further agrees to insert, in any subcontract
hereunder which may exceed $5,000,000 and which contains the
Utilization of Concerns in Labor Surplus Areas clause, provisions
which shall conform to the language of this clause, including this
paragraph, and to notify the Contracting Officer of the names of
such subcontractors.
VII. CLEAN AIR AND WATER
(Applicable only if the contract exceeds $1,000,000, or the contracting
officer has determined that orders under an indefinite quantity contract
in any one year will exceed $1,000,000, or a facility to be used has been
the subject of a conviction under the Clean Air Act (42 U.S.C.
1957c8(cX1) or the Federal Water Pollution Control Act (33 U.S.C. 1319(c)
and is listed by EPA, or the contract is not otherwise exempt.)
The contractor agrees as follows:
(A) To comply with all requirements of section 114 of the Clean
Air Act, as amended (42 U.S.C. 1857, et seq. as amended by Pub. L.
91-604 and section 306 of the Federal Water Pollution Control Act
(33 U.S.C. 1251 et seq., as amended by Publ. 92-500), respectively,
relating to inspection, monitoring, entry, reports, and information,
as well as other requirements specified in section 114 and section
308 of the Air Act and the Water Act, respectively, and all
regulations and guidelines issued thereunder before the award of
this contract.
(B) That no portion of the work required by this prime contract
will be performed in a facility listed on the Environmental
Protection Agency List of Violating Facilities on the date when this
contract was awarded unless and until the EPA eliminates the name of
such facility or facilities from such listing.
(C) To insert the substance of the provisions of this clause into
any nonexempt subcontract, including paragraph (D).
The Contractor also agrees that it has or will provide Xxxxxx Healthcare
Corporation with a copy of all available material safety data sheets for
products furnished under this contract. The material safety data sheets will
include such information as product ingredients; physical characteristics;
storage, transportation and disposal requirements; firefighting methods; human
exposure limitations; and other environmental and safety hazards and
precautionary measures.
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SCHEDULE E
PERFORMANCE CRITERIA SCHEDULE - 1996
FOR BAXTER CONVERTORS/CUSTOM STERILE DIVISION
(To be reviewed quarterly)
Section
-------
I. Turnaround period 2.4(a): Average of [ * ] working days in any
processing facility for any given month.
II. Aeration Period over which Seller agrees to meet its obligations under
Section 2.4 (b): Average of [ * ] working days in any processing
facility (including any backup facility used pursuant to Section
2.4(b)) in any given [ * ] consecutive day period.
III. Percent of loads processed with variations over which Seller agrees
to the provisions under Section 4.1(b): [ * ] of total loads in any
calendar month. Seller will make a continuing good faith effort to
reduce the percentage of total loads on which it fails to process
in accordance with cycle parameters.
---------------
*Confidential Treatment requested; material filed separately with the
Commission.
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Acknowledgement of and Amendment to
Sterilization Processing Services Agreement
This acknowledgement of and amendment to ("Acknowledgement") the Sterilization
Processing Services Agreement between Xxxxxxxx Micro Science, Inc. ("Seller")
and the Convertors/Custom Sterile Division of Xxxxxx Healthcare Corporation,
made and entered into as of the 1st day of January 1996 ("Sterilization
Agreement"), is made and entered into as of September 30, 1996 by and between
Seller and Allegiance Healthcare Corporation.
Recitals
On September 30, 1996, Xxxxxx Healthcare Corporation ("Xxxxxx") completed a
spin-off of some of its business units and facilities to a new corporation
named Allegiance Healthcare Corporation ("Allegiance"). Among the business
units and facilities included in the spin-off were those for which Seller
performs sterilization services under the Sterilization Agreement. Pursuant to
Section 8.8(b) of the Sterilization Agreement, Baxter, referred to as "Buyer"
in the Sterilization Agreement, assigned to Allegiance and Allegiance accepted
the assignment of Xxxxxx'x rights and obligations under the Sterilization
Agreement. Since September 30, 1996, Allegiance has performed all of Buyer's
obligations and accepted all of Buyer's benefits under the Sterilization
Agreement. By this Acknowledgement, the parties hereto wish to formally
document that Allegiance has succeeded to Xxxxxx'x rights and obligations under
the Sterilization Agreement and Allegiance is bound by and agrees to be bound
by the terms and conditions of the Sterilization Agreement. Allegiance and
Seller also wish to amend the Sterilization Agreement as set forth herein.
Covenants
Now, therefore, in consideration of the mutual covenants and agreements
hereinafter set forth and for other good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Seller and Allegiance acknowledge and agree that (a) Baxter has assigned to
Allegiance, and Allegiance has accepted the assignment of, all of Xxxxxx'x
rights and obligations under the Sterilization Agreement, (b) all references to
Baxter or Buyer in the Sterilization Agreement shall refer to Allegiance and
(c) Allegiance is bound by the terms and conditions of the Sterilization
Agreement.
2. The address specified in Section 8.1 of the Sterilization Agreement for the
sending of notices, requests, information or other documents by Seller to Buyer
shall be changed to:
Allegiance Healthcare Corporation
0000 Xxxxxxxx Xxxx, Xxxx. X
XxXxx Xxxx, Xxxxxxxx 00000
Attn.: Corporate Vice President of Manufacturing
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3. Seller and Allegiance ratify and affirm the Sterilization Agreement as
amended hereby. The Sterilization Agreement and this Acknowledgement shall be
read as one document.
IN WITNESS WHEREOF, the parties have caused this Acknowledgement to be executed
by their respective duly authorized officers.
ALLEGIANCE HEALTHCARE XXXXXXXX MICRO SCIENCE, INC.
CORPORATION
By: /s/ Xxxxxx Xxxxxxxxx By: /s/ Xxxx X. Xxxxxxxxxx
Title: Senior Vice President and
Title: Vice President of Manufacturing Chief Financial Officer
Its duly authorized officer Its duly authorized officer
