1
Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
Exhibit 10.10
SUPPLY AGREEMENT
This AGREEMENT dated as of October 17, 1994 is made by and between ASCENT
PHARMACEUTICALS, INC., a Delaware Corporation having its principal place of
business at 0 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (hereinafter
referred to as "Ascent"), and LYNE LABORATORIES, INC., a Massachusetts
Corporation having a place of business at 000 Xxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx 00000 (hereinafter referred to as "Lyne").
INTRODUCTION
1. Lyne has the capability and manufacturing facilities to manufacture
trimethoprim oral solution.
2. Ascent is in the business of the design, development, manufacturing and
sale of pediatric pharmaceuticals.
3. Ascent desires that Lyne supply it with trimethoprim oral solution.
4. Lyne is willing, for the consideration and on the terms set forth herein,
to supply Ascent with trimethoprim oral solution.
In consideration of the mutual covenants and promises contained in this
Agreement and other good and valuable consideration, Ascent and Lyne agree as
follows:
Article I. SUPPLY
1.1 General.
Lyne agrees to manufacture for, and sell and supply to Ascent alone, in
accordance with the terms and conditions of this Article I, all trimethoprim
oral solution that Ascent may order from time to time. During the term of this
Agreement and so long as Lyne is not in default of any obligations hereunder,
Ascent agrees to order all trimethoprim oral solution required by it from Lyne
and from no other. In the anticipation of preventing the interruption of
supply of trimethoprim oral solution to Ascent, in the event that Lyne should
fail to be able to supply product to Ascent, in accordance with the terms of
this Agreement, Lyne shall be prepared to cooperate fully with Ascent (by
providing manufacturing know-how and data) in qualifying a second source of
supply as selected by Ascent. As used herein, "qualify" or "qualifying" shall
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refer to being qualified by the U.S. Food and Drug Administration for the
production of trimethoprim oral solution. It is further understood that Ascent
intends to proceed forthwith to qualify a second source of supply at its own
expense. If Lyne should breach this Agreement permanently or temporarily within
fifteen (15) months from Ascent's ANDA approval, Lyne will be liable for all of
Ascent's costs associated with: (a) the loss of profits associated with the
interruption of supply of trimethoprim oral solution, and (b) costs incurred by
Ascent in qualifying the second source of supply, but Lyne shall only be liable
for these costs incurred by Ascent beginning with the first day of breach by
Lyne unless Lyne is in permanent breach of this Agreement during said fifteen
(15) month period in which case Lyne shall pay all of Ascent's costs in
qualifying a second source of supply. It is further agreed that should Ascent,
or any company licensed to do so by Ascent, desire to distribute trimethoprim
oral solution in a country other than the U.S., and if such country's
regulations require, or should Ascent's licensee desire for whatever reason,
that the manufacturing of the product be conducted within the confines of that
foreign country, Lyne agrees to relinquish its exclusive manufacturing rights to
trimethoprim oral solution for distribution by Ascent or its licensee in such
foreign country and Lyne shall allow Ascent or its licensee to proceed as
necessary to conduct business in such country.
1.2 Quality.
Lyne shall manufacture and supply the trimethoprim strictly in accordance
with the specifications set forth on Schedule A attached hereto (the "Product
Specifications"), with such changes therein as Ascent may reasonably request
from time to time, and in accordance with the highest level of product
consistency. Lyne shall manufacture and supply the trimethoprim oral solution
strictly in accordance and compliance with all applicable laws, rules and
regulations, including without limitation laws, rules and regulations that may
be applicable as a result of Ascent's sale of products using or incorporating
the trimethoprim oral solution for use in humans, such as the Food and Drug
Administration ("FDA") Good Manufacturing Practices. Lyne shall maintain a
quality control/quality assurance system designed to ensure that the
trimethoprim oral solution is manufactured and supplied in accordance with the
terms of this Section 1.2 and to permit lot traceability. Lyne shall immediately
notify Ascent in the event that Lyne becomes aware of any failure of the
trimethoprim oral solution supplied to Ascent to meet the Product Specifications
including those tests being considered by third parties (e.g. Scientific
Associates, Inc.) or the other standards set forth in this Section 1.2 or in the
event Lyne becomes aware of any defect in a trimethoprim oral solution supplied
to Ascent. It is understood that Lyne's obligations hereunder relate to the
production of the trimethoprim oral solution in accordance with the Product
Specifications. Lyne does not represent or warrant the indications, actions and
uses of the trimethoprim oral solution.
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Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
1.3 Inspections.
Ascent and its authorized representatives shall have the right to inspect
the manufacturing facilities of Lyne, and to discuss and review in detail the
manufacturing processes and QA/QC procedures used (and the records created) by
Lyne during trimethoprim oral solution production with the technical and other
employees and consultants of Lyne, in order to ensure that the trimethoprim oral
solution is being manufactured and supplied in accordance with the terms of
Section 1.2 of this Agreement; provided, however, that such visits shall be
during normal business hours and shall not unreasonably interrupt the operations
of Lyne. Lyne shall cooperate with the FDA with respect to any inspection it may
require of Lyne's facilities and procedures as a result of its manufacture and
supply of trimethoprim oral solution. Lyne shall promptly notify Ascent of, and
permit Ascent to take part in, any inspections by the FDA of Lyne's facilities
in connection with the manufacture and supply of trimethoprim oral solution.
Lyne and Ascent shall promptly notify and provide copies to the other company of
any communications either company shall have with the FDA regarding the
manufacture and/or production of trimethoprim oral solution.
1.4 Forecasts.
Commencing with the first calendar year following FDA approval, and for
each calendar year thereafter, Ascent shall notify Lyne, no later than
************ preceding the *****************************************, of
Ascent's sales forecast by calendar quarter of anticipated orders of
trimethoprim oral solution in units of trade packs and samples for each calendar
year (the "Annual Forecast"). For the purpose of controlling the delivery time
of finished product to Ascent, Lyne shall coordinate with Ascent the purchasing
of the annual requirements of drug raw materials and non-drug components. Ascent
shall update such Annual Forecast in units of trade packs and samples for each
calendar quarter other than the first calendar quarter in such calendar year
(the "Quarterly Update") no later than ************** days prior to the
commencement of such calendar quarter. Ascent shall not be under any obligation
to place orders for the quantities specified in either the Annual Forecast or
the Quarterly Update.
1.5 Placing Orders.
Ascent shall place all orders (each, an "Order") for trimethoprim oral
solution in writing. Lyne agrees to complete all phases of manufacturing and
packaging
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Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
within **************************** after receipt and approval of all required
Raw Materials (the "Finished Goods in Quarantine Date").
1.6 Filling Orders and Delivery.
Lyne shall supply to Ascent, no longer than **********************
following receipt of the Certificate of Analysis from the designated finished
goods test site for each applicable Order, the amount of trimethoprim oral
solution shown on such Order. Such trimethoprim oral solution shall be shipped
to the address(s) of Ascent's warehouse facilities as shown on such Order.
Ascent shall pay for all shipping costs, including pallets, not specified in
Schedule B.
1.7 Price.
The price payable by Ascent for the trimethoprim oral solution ordered
shall be determined in accordance with the pricing schedule attached hereto as
Schedule B.
1.8 Invoices and Payment.
Lyne shall invoice for trimethoprim oral solution ordered by Ascent at the
time of shipment by Lyne. Ascent shall pay all amounts properly shown on such
invoices no later than thirty (30) days after the date of invoicing.
1.9 Records.
Lyne shall keep true and accurate records to substantiate all amounts
invoiced to Ascent. Upon request from Ascent, Lyne shall permit Ascent or its
authorized representatives to inspect and audit such records in confidence in
order to verify the amounts invoiced hereunder.
1.10 Failure to Supply.
In the event that Lyne fails to supply the designated finished goods
testing site with the quantity of trimethoprim oral solution required to test
and provide a Certificate of Analysis for the amount of trimethoprim oral
solution shown on an Order within *************** after the Finished Goods In
Quarantine Date or notifies Ascent that Lyne will be unwilling or unable to
supply Ascent with the amount of trimethoprim oral solution shown on an Order,
Annual Forecast, or Quarterly Update, or in the event that any amount of
trimethoprim oral solution is not manufactured and supplied in accordance with
the standards set forth in Section 1.2
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Confidential material omitted and filed separately
with the Securities and Exchange Commission.
Asterisks denote such omissions.
of this Agreement and Lyne is unable or unwilling to replace such trimethoprim
oral solution within ************** after notice to Ascent of such failure and
to adjust its practices as may be necessary so as to avoid such failures in the
future (each of the foregoing events being referred to as an "Event of
Default"), then Lyne shall, upon the written request of Ascent, transfer to
Ascent a copy of all technical and other information necessary or useful for the
manufacture, use or sale of trimethoprim oral solution or products using or
incorporating trimethoprim oral solution which came into the possession of Lyne
as a result of this Agreement. Additionally, Lyne will presently assist and
provide to Ascent all information in its possession including the manufacturing
know-how and data to assist in the qualification of a second source of product
as specified in Section 1.1 of this Agreement. At the request of Ascent, Lyne
will assist Ascent as specified in Section 1.1 of this Agreement, to qualify an
alternative source of supply in an effort to mitigate the interruption of trade
and sample product. All costs to be borne by Lyne associated with any breach or
temporary breach of this Agreement during the ******************** after
Ascent's ANDA approval are set forth in Section 1.1
Article II. CONFIDENTIAL INFORMATION
2.1 Treatment of Confidential Information.
Each Party hereto shall maintain all information, in writing or reduced to
writing and marked "confidential", of a private, secret or confidential nature
concerning the other Party's business, business relationships or financial
affairs (collectively, the "Confidential Information") in confidence, and shall
not disclose, divulge or otherwise communicate such Confidential Information to
others, or use it for any purpose, except pursuant to, and in order to carry
out, the terms and objectives of this Agreement, and hereby agrees to exercise
every reasonable precaution to prevent and restrain the unauthorized disclosure
of such Confidential Information by any of its directors, officers, employees,
consultants, subcontractors, sublicensees or agents.
2.2 Release from Restrictions.
The provisions of Section 2.1 shall not apply to any Confidential
Information disclosed hereunder which:
(a) was known or used by the receiving Party prior to its date of
disclosure to the receiving Party, as evidence by the prior written
records of the receiving Party; or
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(b) is independently developed by the receiving Party without reference to
or reliance on such Confidential Information, as evidenced by the
written records of the receiving Party; or
(c) either before or after the date of the disclosure to the receiving
Party is lawfully disclosed without restriction to the receiving Party
by an independent, unaffiliated third party rightfully in possession of
the Confidential Information (but only to the extent of the rights
received from such third party); or
(d) either before or after the date of the disclosure to the receiving
Party becomes published or generally known to the public through no
fault or omission on the part of the receiving Party; or
(e) is required to be disclosed by the receiving Party to comply with
applicable laws, to defend or prosecute litigation or to comply with
governmental regulations, provided that the receiving Party provides
prior written notice of such disclosure to the other Party and takes
reasonable and lawful actions to avoid and/or minimize the degree of
such disclosure.
Article III. PRODUCT LIABILITY
3.1 Indemnification by Ascent.
Except to the extent that Lyne is obligated to indemnify, defend and hold
Ascent harmless from and against actions, suits, claims, demands, judgments,
liabilities and expenses in accordance with Section 3.2 below, Ascent shall
indemnify, defend and hold Lyne, and each of its officers, directors, employees,
agents and affiliates, harmless from and against all actions, suits, claims,
demands, judgments, liabilities and expenses, including legal expenses and
reasonable attorneys' fees, based upon or arising out of the use or sale by
Ascent of the trimethoprim oral solution, or products which use or incorporate
trimethoprim oral solution, including without limitation any claim arising out
of the death of or injury to any person or persons or out of any damage to
property or as the result of the breach of any patent or trademark. A person or
entity seeking indemnification hereunder shall promptly notify Ascent in writing
of any such action, suit, claim or demand. Ascent shall manage and control, at
its sole expense, the defense of any such action, suit, claim or demand. Lyne,
and each of its officers, directors, employees, agents and affiliates, shall
cooperate with Ascent in such defense and shall not agree to any settlement of
any such action, suit, claim or demand without Ascent's prior written consent,
which shall not be unreasonably withheld. Ascent shall not be liable for any
amounts paid in any settlement without such prior written consent or for any
litigation costs or
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expenses incurred by Lyne, or any of its officers, directors, employees, agents
or affiliates, without Ascent's prior written consent. Ascent shall name Lyne as
an additional insured under Ascent's product liability insurance and shall
provide Lyne with a certificate of such insurance within ten (10) days of the
execution of this Agreement, which certificate shall contain a provision
requiring the insurance carrier to give written notice to Lyne at least fifteen
(15) days prior to any cancellation or expiration of such insurance.
3.2 Indemnification by Lyne.
Lyne shall indemnify, defend and hold Ascent, and each of its officers,
directors, employees, agents and affiliates, harmless from and against all
actions, suits, claims, demands, judgments, liabilities and expenses, including
legal expenses and reasonable attorneys' fees, based upon or arising out of (i)
the negligence or willful misconduct of Lyne, or its officers, directors,
employees, agents or affiliates, (ii) the breach by Lyne of the terms of this
Agreement, (iii) the failure by Lyne to manufacture trimethoprim oral solution
in strict accordance with the Product Specifications and the terms of Section
1.2, or (iv) any manufacturing defect in any trimethoprim oral solution supplied
to Ascent by Lyne, provided that such defect is not the result of a defect in
any raw material or ingredient supplied to Lyne or of Lyne's having manufactured
the trimethoprim oral solution in strict accordance with the Product
Specifications, including without limitation any claim arising out of the death
of or injury to any person or persons or out of any damage to property. A person
or entity seeking indemnification hereunder shall promptly notify Lyne in
writing of any such action, suit, claim or demand. Lyne shall manage and
control, at its sole expense, the defense of any such action, suit, claim or
demand. Ascent, and each of its officers, directors, employees, agents and
affiliates, shall cooperate with Lyne in such defense and shall not agree to any
settlement of any such action, suite, claim or demand without Lyne's prior
written consent, which shall not be unreasonably withheld. Lyne shall not be
liable for any amounts paid in any settlement without such prior written consent
or for any litigation costs or expenses incurred by Ascent, or any of its
officers, directors, employees, agents or affiliates, without Lyne's prior
written consent. Lyne shall name Ascent as an additional insured under Lyne's
product liability insurance and shall provide Ascent with a certificate of such
insurance within ten (10) days of the execution of this Agreement, which
certificate shall contain a provision requiring the insurance carrier to give
written notice to Ascent at least fifteen (15) days prior to any cancellation or
expiration of such insurance.
Article IV. TERMINATION
4.1 Term.
This Agreement shall remain in effect until terminated in accordance with
the provisions of this Article IV.
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4.2 Termination for Breach.
Each Party shall be entitled to terminate this Agreement by written notice
to the other Party in the event that the other Party shall be in default of any
of its obligations hereunder, and shall fail to remedy any such default within
thirty (30) days after notice thereof by the non-breaching Party. Any such
notice shall specifically state that the non-breaching Party intends to
terminate this Agreement in the event that the breaching Party shall fail to
remedy the default. Upon termination of this Agreement pursuant to this Section
4.2, neither Party shall be relieved of any obligations incurred prior to such
termination.
4.3 Termination for Other than Breach.
Either party may elect to terminate this Agreement for any reason or no
reason at any time after ten (10) years from the date hereof by giving the other
at least three (3) months advance written notice of its intention to terminate
this Agreement.
4.4 Survival of Obligations; Return of Confidential Information.
Notwithstanding any termination of this Agreement, the obligations of the
Parties under Articles II and III of this Agreement, as well as under any other
provisions which by their nature are intended to survive any such termination,
shall survive and continue to be enforceable. Upon any termination of this
Agreement, each Party shall promptly return to the other Party all written
Confidential Information, and all copies thereof, of the other Party.
Article V. MISCELLANEOUS
5.1 Assignment.
Neither this Agreement nor any of the rights and obligations hereunder may
by assigned by Lyne to any third party (including any party which acquires all
or substantially all of the business of Lyne by merger, sale of assets or
otherwise) without the prior written consent of Ascent, which consent shall not
be unreasonably withheld or delayed, provided, however, that no consent of
Ascent is required in the event that this Agreement is assigned by Lyne to a
wholly owned subsidiary or an affiliated company of Lyne in which a majority of
its stockholders are the same as a majority of the stockholders of Lyne. Any
Assignee of Lyne must agree to be bound by the obligations and duties of Lyne
set forth in this Agreement. Any assignment by Lyne which results in a change in
manufacturing site can only be made if said new manufacturing site has been
formally and fully approved by the FDA (at Lyne's expense) to manufacture the
trimethoprim oral solution product covered by this
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Agreement. Ascent may assign this Agreement and any of its rights and
obligations hereunder without Lyne's consent being necessary.
5.2 Governing Law.
This Agreement shall be governed by and interpreted in accordance with the
laws of the Commonwealth of Massachusetts, without giving effect to conflict of
laws provisions.
5.3 Force Majeure.
In the event that either Party is prevented from performing or is unable to
perform any of its obligations under this Agreement due to any act of God; fire;
casualty; flood; war; strike; lockout; failure of public utilities; injunction
or any act, exercise, assertion or requirement of governmental authority;
epidemic; destruction of research or production facilities; riots; insurrection;
inability to procure or use materials, labor, equipment, transportation or
energy; or any other cause beyond the reasonable control of the Party invoking
this Section 5.3 if such Party shall have used its best efforts to avoid such
occurrence, such Party shall give notice to the other Party in writing promptly,
and thereupon the affected Party's performance shall be excused and the time for
performance shall be extended for the period of delay or inability to perform
due to such occurrence.
5.4 Waiver.
The waiver by either Party of a breach or a default of any provision of
this Agreement by the other Party shall not be construed as a waiver of any
succeeding breach of the same or any other provision, nor shall any delay or
omission on the part of either Party to exercise or avail itself of any right,
power or privilege that it has or may have hereunder operate as a waiver of any
right, power or privilege by such Party.
5.5 Notices.
All notices required or permitted under this Agreement shall be in writing
and shall be deemed effective upon personal delivery or three days after deposit
in the United States Post Office, by registered or certified mail, postage
prepaid, return receipt requested, addressed to the other party at the address
listed below or such other address as the addressee shall have specified in a
notice given in accordance with this Section 5.5:
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If to Lyne:
Lyne Laboratories, Inc.
000 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
with a copy to:
Xxxxxx Xxxx, Esq.
Xxxxxx, Kozodov & Xxxx
00 Xxxxxxx Xx.
Xxxxxx, XX 00000
If to Ascent:
Ascent Pharmaceuticals, Inc.
0 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
with a copy to:
Xxxxx X. Xxxxxxx, Esq.
Xxxx and Xxxx
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
5.6 No Agency.
Nothing herein shall be deemed to constitute either Party as the agent or
representative of the other Party, or both Parties as joint venturers or
partners for any purpose. Lyne shall be an independent contractor, not an
employee or partner of Ascent, and the manner in which Lyne renders its services
under this Agreement shall be within Lyne's sole discretion. Neither Party shall
be responsible for the acts or omissions of the other Party, and neither Party
will have authority to speak for, represent or obligate the other Party in any
way without prior written authority from the other Party.
5.7 Warranty; No Conflict.
Each party warrants to the other that as of the date of execution of this
Agreement, it has not received actual notice of, nor does it have any reason to
believe there exist, any patents or patent applications owned by third parties
which would
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prevent any party from making, using or selling trimethoprim oral solution, or
products using or incorporating trimethoprim oral solution. Each party
represents and warrants that the execution and delivery of this Agreement and
the performance by it of its obligations hereunder does not and will not
conflict with, or cause a default under, any agreement to which it is a party or
other obligation to which it is subject. Each party covenants with the other
that it will not enter into any agreement with or grant any rights to a third
party that would cause the immediately preceding representation to become untrue
or which would otherwise impair or impede its ability to fulfill its obligations
hereunder.
5.8 Entire Agreement.
This Agreement and the Schedules hereto (which Schedules are deemed to be a
part of this Agreement for all purposes) contain the frill understanding of the
Parties with respect to the subject matter hereof and supersede all prior
understandings and writings relating thereto. No waiver, alteration or
modification of any of the provisions hereof shall be binding unless made in
writing and signed by the Parties by their respective officers thereunto duly
authorized.
5.9 Headings.
The headings contained in this Agreement are for convenience of reference
only and shall not be considered in construing this Agreement.
5.10 Severability.
In the event that any provision of this Agreement is held by a court of
competent jurisdiction to be unenforceable because it is invalid or in conflict
with any law of any relevant jurisdiction, the validity of the remaining
provisions shall not be affected, and the rights and obligations of the Parties
shall be construed and enforced as if the Agreement did not contain the
particular provisions held to be unenforceable.
5.11 Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their successors and permitted assigns.
5.12 Counterparts.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as a sealed instrument in their names by their properly and duly authorized
officers or representatives as of the date first above written.
LYNE LABORATORIES, INC.
By: /s/ Xxxxxx X. Girafoli
-----------------------
Title: President
ASCENT PHARMACEUTICALS, INC.
By: /s/ Xxxxxx Xxxxxxxx
---------------------
Title: President
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SCHEDULE A
MANUFACTURING SPECIFICATIONS: PART I
PRIMSTAT(TM) ORAL SOLUTION, 16 oz TRADE PACK
(Trimethoprim, 25 mg/5 mL)
KEY TEST METHOD SPECIFICATION
--- ---- ------ -------------
Page 1 of Schedule A contains confidential materials
which have been omitted and filed separately with the
Securities and Exchange Commission.
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SCHEDULE A
MANUFACTURING SPECIFICATIONS; PART II
PACKAGING COMPONENTS
Page 1 of Schedule A contains confidential materials
which have been omitted and filed separately with the
Securities and Exchange Commission.
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SCHEDULE B
PRICING
Pages 1 and 2 of Schedule B contains confidential materials
which have been omitted and filed separately with the
Securities and Exchange Commission.
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