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2.3 Processing Method. To assist Alcon
[P.R.] in satisfying its obligations under this
Agreement, MedChem [P.R.] shall grant to Alcon [P.R.]
pursuant to the terms of Section 4 the right to use the
Equipment, without charge therefor. Alcon [P.R.] shall
furnish all labor, variable and fixed overhead and
quality assurance required for the processing of
Avitene hereunder. MedChem [P.R.] will employ a plant
manager and other appropriate personnel who will
inspect, advise and make corrections when appropriate
with respect to the Conversion Process; however,
MedChem [P.R.] employees will not participate in the
Alcon [P.R.] management process. Alcon [P.R.] shall be
responsible for all maintenance of the Equipment used
in the Conversion Process and for the compliance of
such Equipment with applicable regulations of
governmental agencies, including but not limited to
regulations promulgated by the U.S. Food and Drug
Administration and the Environmental Protection Agency;
the cost of such maintenance and compliance shall be
borne initially by Alcon [P.R.] but shall be included
in the Processing Cost (as such term is defined in
Section 9). Alcon [P.R.] shall also be responsible for
required validation studies on devices, formulae or
processes used in the Conversion Process. In the event
that Alcon [P.R.] is required by a regulatory authority
to perform additional validation studies for purposes
of validating new devices, new manufacturing procedures
and/or new raw material and finished product assay
procedures in order to continue lawfully to engage in
the processing of Avitene for MedChem [P.R.] (and
MedChem [P.R.], after notice from Alcon that such
additional validation studies are required, directs
Alcon [P.R.] to continue such processing), all expenses
borne by Alcon [P.R.] in the conduct of any such
validation studies shall be paid by Alcon [P.R.] and
shall be included in the Processing Cost. To the
extent that MedChem [P.R.] makes direct expenditures
(not described in the preceding sentence) with regard
to (a) the purchase of machinery or equipment, (b) the
compliance of existing machinery or equipment with all
applicable laws and regulations or (c) the performance
of validation studies or any matter relating to the
Conversion Process, such expenditures shall not be
included in the Processing Cost.
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