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Title: |
Lease and Operation Agreement |
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Date: |
2006 |
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Preview shows 21KB of 146KB total |
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$57 |
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ID: |
#1436318 |
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LEASE AND OPERATION AGREEMENT
SIGNED IN TEL-AVIV ON JULY 20TH, 2000
B E T W E E N
OMRIX BIOPHARMACEUTICALS LTD.
whose offices are located at Building 14, Kiribati Weitzman, Nes Zion,
(hereinafter "OMRIX")
ON THE ONE PART
AND
MAGEN DAVID ADOM in Israel
a statutory, not - for - profit organization, existing under the Laws of the
State of Israel, whose headquarters are located at 60 Yigal Allon Street, Tel
Aviv (hereinafter "MDA")
OF THE SECOND PART
WHEREAS With the help and the donations of the friends and of the donors of
MDA in the United States of America as well as others around the
world, MDA has built and erected a blood fractionation plant belonging
to MDA within the perimeter of the Tel Hashomer hospital
(hereinafter: "THE PLANT"), occupying part of the Building belonging
to MDA, for the purpose of achieving such goals and purposes as
mentioned hereinafter; and
WHEREAS Said goals and purposes are, primarily, the establishment of a blood
fractionation plant in order to enable the manufacture from plasma
collected in Israel and the supply therefrom of the Licensed Products
(as defined herein below) to the population of Israel in times of
peace as well as in times of crisis and/or war; and
WHEREAS In light of the aforesaid, OMRIX declares that it understands the
importance to MDA and to the state of Israel of supplying the Israeli
population with the Licensed Products manufactured from plasma
collected in Israel, and states and confirms that it bases its plans
and calculations, among others, on selling to the Israeli market the
Licensed Products manufactured from plasma collected in Israel.; and
WHEREAS MDA and OCTAPHARMA A.G. entered, on September 2, 1990, into a
know-how, License and Manufacturing Contract (hereinafter "THE
CONTRACT"); and
PORTIONS OF THIS EXHIBIT MARKED BY AN *** HAVE BEEN OMITTED PURSUANT
TO A REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
<PAGE>
- 2 -
WHEREAS On September 5, 1995, OCTAPHARMA A.G.. assigned its rights and
duties under the Contract to OMRIX, except some duties and obligations
towards MDA in respect of which OCTAPHARMA A.G. remains liable and
obligated as specified in the abovementioned assignment document; and
WHEREAS On February 27, 1996, MDA and OMRIX executed an Addendum to the
Contract ("THE ADDENDUM"); and
WHEREAS The parties hereto wished to drastically amend the modus operandi
and as a result thereof also the relations between the parties, so
that OMRIX shall lease from MDA, the Plant and the Premises (as
hereinafter defined) and operate the Plant on its own, paying MDA a
Rent and Lease Fee as provided herein; and
WHEREAS Consequently the parties signed on April 17, 1997 an agreement
which was subject to the approval of the MDA's executive committee
("THE 1997 AGREEMENT"); and
WHEREAS Ever since, the parties acted in accordance with the provisions of
the 1997 Agreement as if it had been approved by MDA's executive
committee; and
WHEREAS The parties wish to amend certain provisions of the 1997
Agreement, among others, in order to further improve the level of
cooperation between the parties; and
WHEREAS The parties wish to enter into an agreement pertaining to the
purchase by OMRIX, during the Term of this Agreement, of plasma from
MDA; and
WHEREAS Both parties hereby declare that they have the full right and
authority to enter into this Agreement; and
WHEREAS It is agreed that unless otherwise specifically indicated herein,
and except for some duties and obligations towards MDA in respect of
which OCTAPHARMA A.G. remains liable and obligated as specified in the
aforementioned assignment documents, the 1997 Agreement replaced,
substituted and came instead of the Contract and the Addendum; and
WHEREAS The parties wish that this Agreement ("AGREEMENT") will replace,
substitute, and come instead of the 1997 Agreement.
NOW THEREFORE THE PARTIES HERETO AGREE AS FOLLOWS:
1. THE PREAMBLE, SCHEDULES AND DEFINITIONS
1.1 The preamble to this Agreement and the Schedules attached thereto form an
integral part thereof and are as binding upon the parties as the
Agreement itself.
1.2 The capitalized terms listed below shall have the meaning assigned to
them, unless the context requires otherwise.
<PAGE>
- 3 -
LICENSED PRODUCTS (or PRODUCTS)- shall mean Licensed Products as defined
in the Contract, with the exclusion of the words "Factor IX and such
other products" from the definition therein.
THE PLANT - as described in the first recital of this Agreement.
THE PREMISES - The part of the Building hereby leased to OMRIX as marked
in yellow on the plan of the Building attached hereto as SCHEDULE "A".
THE BUILDING - The MDA Blood Services Center Building within the
perimeter of the Tel Hashomer Hospital.
SUPPLIES - Electricity, water, fuel, salt and other supplies, should they
be agreed upon from time to time.
SYSTEMS - The central systems located in the Building and serving the
Building and the Plant, being at present as detailed in SCHEDULE C1
attached hereto.
EQUIPMENT - The machinery, equipment and instrumentation belonging to MDA
and used for the Plant as detailed in Schedule C3 attached hereto.
BIOLOGICAL GLUE - The Glue product produced and/or marketed by OMRIX
under the trademark/trade name "Quixil" or under any other trademark
and/or trade name.
FACILITY ENGINEER - The person appointed or to be appointed by the
parties hereto, acting as supervisor over all maintenance in the
Building, including the Plant - as referred to in Sub Section 2.7A
MAINTENANCE BODY - As defined in Section 2.7
EFFECTIVE DATE - January 1st, 1997.
ARBITRATOR - A single ruling arbitrator who shall be appointed by both
parties. In case agreement cannot be reached as to the identity of the
Arbitrator within 30 days as from the date on which a party hereto
requests to refer a matter to arbitration, the issue shall be referred to
the head of the Israeli Bar Association, who will appoint the Arbitrator.
FDA APPROVAL - Registration by the United States Food and Drug
Administration of the Biological Glue and permit to market the Biological
Glue in the United States.
TERM - Period of this agreement as referred to in Section 4
2. THE LEASE OF THE PREMISES
2.1 OMRIX hereby leases from MDA and MDA hereby lets to OMRIX, for
the Term of this Agreement, the Premises in which the Plant is
located.
<PAGE>
- 4 -
2.2 It is hereby understood that OMRIX may, in the future, require
additional space in the Building. In such an event MDA will make
its best efforts to accommodate OMRIX's requirements for
additional space and the parties will negotiate in good faith a
mutually agreeable arrangement for such space including the
payment of rent therefore. Since the Effective Date, the parties
have agreed that MDA shall lease to OMRIX additional space
("ADDITIONAL SPACE") as marked in yellow lines on SCHEDULE A. The
additional rent in consideration of the Additional Space has been
agreed to be $15 US per sq.m per month, and since OMRIX has
undertaken to finance some construction work for MDA at a cost of
$104,000 OMRIX shall be entitled to set off the additional rent
against that amount. Said Additional Space shall be deemed for all
intents and purposes to be part of the Premises, except with
regard to the Rent and Lease Fee; the aforementioned fee with
respect to the Additional Space and/or any future additional
space, shall be paid, subject to the offset provisions referred to
above, in addition to the Rent and Lease Fee, as set forth in
section 7 hereunder.
2.3 In addition to the Premises, MDA hereby grants OMRIX, for the
duration of the Agreement, the non-exclusive passage rights in
respect of other parts of the Building, as may be reasonably
required by OMRIX, such as the warehouse entrance, the entrance
to the Building, etc.
2.4 Whereas the Premises and the Plant obtain their Supplies from the
Systems, and it is the intention of the parties that all the
Systems will continue, in the future, to supply both the Blood
Bank Services and the offices of MDA on the one hand, and the
Premises and Plant on the other hand, MDA hereby undertakes to
provide for the professionally sufficient and adequate, continuous
and uninterrupted supply of all the above Supplies to OMRIX during
the duration of this Agreement.
It was recognized that on the Effective Date, the mechanical state
of the Plant and the Systems were deficient in terms of cooling
capacity, specifically regarding the repair of the second chiller
and the installation of a third chiller. The cost of the above
units and the installation thereof, as well as the cost of
rectifying the above deficiencies were borne by MDA. At MDA's
request, OMRIX financed the above costs and has offset same,
against amounts that were due to MDA from OMRIX.
Both parties hereby confirm that MDA authorized OMRIX to purchase
a third chiller, which was installed at the Premises/Plant. OMRIX
financed the acquisition of the third chiller, the specifications
and the price of which were already agreed upon by the parties,
and has debited MDA for the amount paid by OMRIX for the above
chiller. For the avoidance of any doubt it is hereby agreed and
declared that the third chiller is not part of the Systems, and
serves the Plant only.
As the entrance to the Warehouse did not meet GMP standards and
was modified to do so, the parties agreed about the installation
of a door at the back entrance to the Premises, to be operated by
means of remote control, and about the division of the costs
thereof between them.
<PAGE>
- 5 -
2.5 MDA hereby acknowledges and confirms that any interruption of
supply to OMRIX of any of the Supplies and/or prevention of access
to the Premises and any other deed or misdeed of MDA or anybody on
its behalf which might lead to the disruption of the operational
activities of the Plant - which is designed and intended to
operate 364 days a year, may cause OMRIX severe damages for which
MDA shall be fully liable.
In view of the above MDA hereby states and undertakes that under
no circumstances will it disconnect or allow anybody else to
disconnect or discontinue any of the Systems or the Supplies nor
let any such System remain, for any period of time, out of order
and/or inoperable, unless such interruption is absolutely required
for the repair and maintenance and as far as such interruption
could be foreseeable in advance, upon coordination with OMRIX.
2.6 Without derogating from the generality of the above, MDA hereby
undertakes to maintain, at all times, in good operating order and
in compliance with FDA and EC GMP requirements all the Systems
which will serve both MDA and OMRIX and will take whatever
steps necessary - including replacement of defective or aging
units, in order to ensure the uninterrupted supply of the
Supplies. OMRIX declares that at the time of the signing of this
Agreement, the maintenance is in compliance with EC GMP
requirements. OMRIX further declares that it is not aware of any
aspect of the maintenance, which is not in compliance with the FDA
GMP requirements, except some items regarding which OMRIX has
informed the Facility Engineer
It is hereby agreed by the Parties that OMRIX shall share with MDA
the costs of the Supplies and the costs of the operating and
maintenance of the Systems. The division of the said costs between
MDA and OMRIX shall be calculated in a manner as described below.
MDA and OMRIX, respectively, will invoice each other monthly for
the applicable charges with regard to said costs, paid by the
invoicing party. The other Party will pay such invoiced costs
within 30 days of the date of invoice, or offset same against
amounts currently due to such invoicing party, provided that the
invoicing party will provide the other Party with adequate proof
of the payment of said underlying supplies and maintenance
invoices.
During the initial period starting from the Effective Date until
December 31, 1997, the parties bore the cost of the Supplies and
the operating cost of the Systems as follows: OMRIX ***% and MDA
***%. The same ratio shall prevail with respect to the cost of the
Supplies, until either party requests the comparison and the
re-examination of the consumption of the Supplies as set forth
hereunder, against the consumption during calendar year 1995. Such
consumption shall be quantified in terms of units used rather than
monetary terms. It is agreed that, assuming MDA will not introduce
new activities or significantly increased levels of consumption in
its part of the Building, all the growth in consumption of the
Supplies (in units - as opposed to price) shall be attributed to
OMRIX. In view of the results of the above comparison, the parties
shall make the necessary retroactive adjustments in respect of the
calendar
<PAGE>
- 6 -
year which had been the subject of the comparison. Thereafter,
such allocation percentage will be used for all future years
unless either party significantly changes its level of activity.
It is hereby clarified that the aforementioned comparison shall be
made separately with regard to each of the Supplies.
Without derogating from the aforesaid, each Party shall have the
right to demand on an annual basis during any given year of the
Term, that a new comparison of units be made and that a new
allocation percentage be determined, if a Significant Change has
occurred.
A Significant Change shall be defined as a five percent (5%) or
greater variation in unit consumption as compared to the previous
applicable year in which the percentage had been established (such
previous year shall be referred to as the "BASE YEAR"). Each
Supply out of the following - fuel, water/sewage & electricity
shall be separately examined and shall be separately subject to a
new determination of the allocation percentage. All comparisons
shall be made on a calendar year basis and if a Significant Change
has occurred such change shall be retroactively adjusted for such
one calendar year only. Any new allocation percentage so changed
shall continue to be applied prospectively until the next such
change with regard to the same Supply. The first comparison for
the determination of a Significant Change of the allocation
percentages with regard to each of the aforesaid Supplies shall
use 1995 as the initial Base Year, Thereafter, subsequent
comparisons shall be made against units consumed in the year in
which the applicable ratio was last changed (i.e. the new Base
Year with regard to same Supply).
Since the parties have already reached an agreement with regard to
the accounting up until December 31st, 1997 - the first review of
the allocation percentages shall compare usage during the first
year thereafter in which either party requests a new comparison,
against 1995 usage. AN example is presented below for
clarification, which assumes that all increases have been caused
by OMRIX:
<TABLE>
<CAPTION>
FUEL Electricity Water/
Liters KW/H Sewage
------ ----------- M(Delta)3
-------
<S> <C> <C> <C>
(1) 1998 Units 500,000 5,500,000 53,000
(2) 1995 Units 32,000 2,200,000 19,000
------- --------- -------
(3) Difference (1) - (2) 468,000 3,300,000 34,000
======= ========= ======
(4) % Change vs. Base Year
Units (3)/(2) 1463% 150% 179%
======= ========= ======
Allocation Change Yes Yes Yes
(5) Calculation of New
Allocation Percentage
to OMRIX = (3)/(1) 94% 60% 64%
======= ========= ======
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