EXHIBIT 10.1
SUPPLY AGREEMENT
This Agreement is made to be effective as of 22nd January 2002 by and between
INDENA SPA, a company organized and existing under the laws of Italy, having
offices at Xxxxx Xxxxxx 00, 00000 Xxxxxx, Xxxxx ("Indena") and SONUS
PHARMACEUTICALS, INC., a company organized and existing under the laws of the
State of Delaware, USA, having offices at 00000 00xx Xxxxxx XX, Xxxxxxx, XX
00000 XXX ("SONUS"). Indena and SONUS are each acting on behalf of itself and of
the respective Affiliates. Indena and its Affiliates are hereinafter
collectively referred to as "SUPPLIER" and SONUS and its Affiliates are
hereinafter collectively referred to as "PURCHASER".
WHEREAS
A. Supplier engages in the production, marketing and sale of vegetal
extracts, derivatives and active principles; and
B. Purchaser is interested to purchase from Supplier medical grade
paclitaxel for use in the manufacture of a pharmaceutical speciality
and Supplier desires to supply paclitaxel to Purchaser, upon the terms
and conditions set out hereinafter,
NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS.
1. CERTAIN DEFINED TERMS
As used in this Agreement, the following terms shall have the following
meanings (with the understanding that terms importing the singular also include
the plural and vice-versa):
(a) "AGREEMENT" shall mean this Supply Agreement of which the Exhibits
attached hereto form an integral and substantive part;
(b) "EFFECTIVE DATE" shall mean the date first written above;
(c) "PRODUCT" shall mean medical grade paclitaxel conforming to the
specifications set forth on Exhibit 1 attached hereto (the
"Specifications") and Supplier's DMF filed with FDA;
(d) "FINISHED PRODUCT" shall mean the new pharmaceutical product
containing the Product to be manufactured, marketed and sold by
Purchaser in the Territory;
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(e) "TERRITORY" shall mean any country of the world;
(f) "FDA" shall mean the United States Food and Drug Administration;
(g) "FDA APPROVAL" shall mean approval by the FDA of the NDA relating
to the Finished Product and of Supplier as supplier of Product;
(h) "NDA" shall mean the New Drug Application required to manufacture,
market and sell the Finished Product in the United States;
(i) "DMF" shall mean Supplier's Drug Master File required to
manufacture, market and sell the Product in the Territory;
(j) "cGMP" shall mean current good manufacturing practices as the same
are or shall from time to time be established by governmental
authority in the Territory;
(k) "AFFILIATES" of a party hereto shall mean any company or other
entity directly or indirectly controlling, or controlled by, such
party or under common control as such party, the term "control"
meaning ownership of the majority of shares carrying the right to
vote at General Meetings or the power to direct the policies and
management of a company or entity; and
(l) "USP" shall mean the United States Pharmacopoeia, current edition.
2. SALE AND PURCHASE OF PRODUCT
During the term hereof Supplier undertakes to supply, and Purchaser
undertakes to purchase the Product for use to manufacture the Finished
Product pursuant to purchase orders delivered by Purchaser to Supplier
from time to time as provided herein. Nothing herein shall be deemed or
construed as imposing any obligation of either party to deal exclusively
with the other party or any obligation of Purchaser to purchase its
requirements of the Product from Supplier.
3. INITIAL SUPPLIES
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3.1 In year 2002, Supplier undertakes to supply, and Purchaser undertakes
to purchase, 1000 grams of Product to be used by Purchaser to
manufacture the Finished Product (the "Initial Supplies").
3.2 Orders for each lot of Product to be delivered in year 2002 shall be
placed with Supplier at least 90 days before the requested date of
supply.
4. FURTHER SUPPLIES
Regular supplies of Product (the "Further Supplies") shall begin
starting by January 2003 or such other date as the parties may agree in
writing, as provided in Section 5 below.
5. FORECASTS AND ORDERS
5.1 By October 31 of each year during the term hereof starting from year
2002, Purchaser shall submit to Supplier an estimated rolling forecast
of the quantities of Product that Purchaser expects to order during the
two following calendar years.
The forecast for the first following calendar year divided by quarters
shall be binding and shall be considered a firm purchase commitment.
Purchaser shall confirm each binding purchase commitment by a purchase
order. Each purchase order and any confirmation shall be governed and
superseded by the terms and provisions of this Agreement.
The forecast for the second calendar year also divided by quarters
shall be non-binding, provided that the relevant firm order must be
consistent (plus or minus 15%) with the forecasted quantities.
5.2 By no later than November 30 of each year during the term hereof
starting from 2002 Indena will confirm in writing to Purchaser the
receipt and acceptance of firm orders.
5.3 In the event that the parties agree on a date other than January 2003
for the beginning of regular supplies the dates set out in the
preceding Sections may be revised by mutual agreement.
6. SHIPMENTS
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6.1 The Product shall be shipped CIP, Seattle, Washington, USA. Supplier
shall be responsible for all export, import, or customs taxes or
duties, and any sales use, or value-added taxes of any jurisdiction
that may apply to the purchase and sales of the Product hereunder.
6.2 Unless otherwise specifically provided, trade terms used herein are as
defined in Incoterms (2000) issued by the International Chamber of
Commerce.
7. PRICE; PAYMENT TERMS
7.1 The Price for the Initial Supplies of the Product shall be as specified
in the quotation and appended hereto as Exhibit 2.
7.2 The price for Further Supplies of the Product applicable in each
two-year period will be mutually agreed by October 31 of the preceding
year, provided that if there are unforeseeable material increases in
the costs borne by Supplier to manufacture the Product which are not
the result of fault or negligence of Supplier, the parties shall
promptly consult and negotiate in good faith on a new price of supply.
7.3 Payment by Purchaser of each lot of Product supplied hereunder shall be
made at 30 days from the date of the relevant invoice by Supplier by
wire transfer to the bank account designated by Supplier in the
invoice.
8. WARRANTIES, LIABILITIES, INDEMNITY
8.1 Supplier represents and warrants as follows.
(a) The Product supplied hereunder shall be in compliance with the
Specifications and the relevant DMF.
(b) The Product shall conform in all respects to the applicable
laws, regulations and approvals governing the manufacture,
importation, distribution and use of the Product. Without
limiting the generality of the foregoing, Supplier represents
and warrants that the Product shall not be adulterated or
misbranded within the meaning of the U.S. Federal Food Drug
and Cosmetic Act, as amended, as well as any applicable
foreign law or regulation of any country, as such Act and such
laws are constituted and are effective at the time of
delivery.
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(c) The manufacture of the Product shall be manufactured in an FDA
approved facility in accordance with cGMP. Purchaser's
representatives shall have the right to inspect Supplier's
Product manufacturing facilities, once per calendar year
during regular business hours and upon at least 30 working
days prior notice, to verify Supplier's compliance with the
foregoing.
(d) All laboratory, scientific technical and/or other data
submitted by or on behalf of Supplier relating to the Product
shall be true and correct and shall not contain any
misrepresentation or omission.
(e) An approved Certificate of Analysis, showing conformance of
the Product to the relevant Product Specifications and
requirements, shall accompany each lot within each shipment of
the Product.
(f) Each Product shipment shall have at minimum 1.5 years
remaining before retest date according to the Certificate of
Analysis.
(g) Upon publication as a monograph in the USP, the Product shall
conform in all respects to the applicable requirements for
paclitaxel, USP.
OTHER THAN AS SPECIFICALLY SET FORTH IN THIS AGREEMENT. SUPPLIER HEREBY
EXPRESSLY EXCLUDES AND DISCLAIMS ALL WARRANTIES (WHETHER IMPLIED OR
EXPRESS), INCLUDING, WITHOUT LIMITATION: (i) ANY WARRANTY OF
MERCHANTABILITY; OR (ii) ANY WARRANTY OF FITNESS OF THE PRODUCT
SUPPLIED UNDER THIS AGREEMENT FOR THE PARTICULAR PURPOSE FOR WHICH
PURCHASER INTENDS TO USE IT.
8.2 Within 30 days from receipt Purchaser shall analyze each lot of Product
delivered by Supplier hereunder and if any quantity of the Product
delivered by Supplier hereunder fails to meet the Specifications, or
the terms or provisions of this Agreement, or is otherwise defective,
Purchaser shall give notice to Supplier, except for claims based on
hidden defects, with respect to which the above 30 day period shall be
computed from the date of discovery. Failure by Purchaser to give this
notice within the 30 day period shall constitute a waiver by Purchaser
of all claims under this Agreement with respect to the Product.
If Supplier accepts the claim, Purchaser shall return to Supplier the
defective or non-conforming lot at Supplier's expense, unless the
parties
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agree otherwise, and Supplier shall at its care and expense and as soon
as technically possible replace the non-conforming or defective lot. In
the event of disagreement between the parties about non-conformity or
other defects alleged by Purchaser, the matter shall be finally settled
by an independent laboratory at the expense of the party whose findings
are not confirmed by the independent laboratory.
8.3 FOR DELIVERIES OF NON-CONFORMING OR DEFECTIVE PRODUCT BY SUPPLIER TO
PURCHASER, PURCHASER'S EXCLUSIVE REMEDY AND SUPPLIER'S EXCLUSIVE
LIABILITY HEREUNDER (WHETHER IN CONTRACT, IN TORT, UNDER ANY WARRANTY, OR
OTHERWISE), FOR ANY AND ALL LOSSES, DAMAGES OR INJURIES, WHETHER TO
PERSONS OR PROPERTY, RESULTING FROM PRODUCT USED AS SUCH OR IN THE
FINISHED PRODUCT, OR FROM ANY OTHER CAUSE, SHALL BE LIMITED TO THE
REPLACEMENT BY SUPPLIER OF ANY NON-CONFORMING OR DEFECTIVE PRODUCT SOLD
TO PURCHASER HEREUNDER, FREE OF CHARGE.
8.4 Supplier shall indemnify and hold Purchaser harmless from and against any
third party claim or action (and loss, liability, damage or expense
including, without limitation, reasonable attorney's fees deriving
therefrom) arising from or related to (i) any negligent act or omission
of Supplier or willful misconduct of Supplier, or any directors,
officers, employees or agents of Supplier, or (ii) any breach of any
representation, warranty, or covenant by Supplier under this Agreement,
subject to the provisions of Section 8.3.
8.5 Purchaser shall indemnify and hold Supplier harmless from and against any
third party claim or action (and loss, liability, damage or expense
including, without limitation, reasonable attorney's fees deriving
therefrom) arising from or related to Purchaser's handling, storage or
use of the Product or distribution, marketing or sale of any Finished
Product containing the Product except to the extent attributable to
Supplier pursuant to this Section 8.
8.6 If either party expects to seek indemnification from the other party
under the preceding two paragraphs, the party seeking indemnification
shall promptly give notice to the other party of any such claim or suit
threatened, made or filed against it which forms the basis for such claim
of indemnification and to co-operate fully with the other party in the
investigation and defense of all such claims or suits. The indemnifying
party shall have the option to assume the other party's defense in any
such claim or suit with counsel reasonably satisfactory to the other
party. No settlement or compromise shall
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be binding on a party hereto without its prior written consent, unless
such settlement fully releases the other party without any liability,
loss, cost or obligation to such party.
8.7 THE REMEDIES PROVIDED FOR IN THIS SECTION 8 SHALL BE THE SOLE AND
EXCLUSIVE REMEDIES AVAILABLE TO THE PARTIES HEREUNDER FOR THE VIOLATION
BY THE OTHER PARTY OF ANY REPRESENTATION OR WARRANTY CONTAINED IN THIS
AGREEMENT, AND ANY RIGHT OF EITHER PARTY TO PROSPECTIVE PROFITS OR
SPECIAL, INDIRECT, CONSEQUENTIAL OR INCIDENTAL DAMAGES, IS HEREBY
EXPRESSLY EXCLUDED AND EXPRESSLY WAIVED BY THE PARTIES HERETO.
8.8 This Section 8 and the obligations contained herein shall survive the
expiration or termination of this Agreement for any reasons whatsoever.
9. REGULATORY MATTERS
9.1 Supplier shall maintain a complete DMF for the Product, complying with
all applicable FDA and other applicable regulatory authority
requirements and will provide to Purchaser copies of all correspondence
with the FDA, inspection reports and other reports issued by the FDA
with respect to the Product and Supplier's manufacturing facilities.
Supplier shall further provide authorization for the regulatory
agencies to refer to the DMF during the review of any regulatory
submission made by Purchaser.
9.2 Purchaser shall use its commercially reasonable best efforts to file an
NDA and to obtain FDA Approval as soon as practicable; provided,
however, that nothing herein shall impose any obligation on Purchaser
to continue to pursue FDA approval if in its reasonable business
judgement, it would be commercially impractical to do so.
9.3 Supplier hereby authorizes Purchaser to reference Supplier's DMF in
Purchaser's regulatory submissions. If Supplier intends to amend the
DMF, Supplier shall send 60 days advance notice to Purchaser to permit
it to request amendment to the FDA Approval, if required.
9.4 Supplier shall advise Purchaser immediately in the event it intends to
change its process to manufacture the Product corresponding which may
or could reasonably be expected to affect Supplier's DMF, Purchaser's
regulatory submissions or the Finished Product.
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9.5 Supplier shall not institute any such change without first filing a
complete and compliant DMF and shall provide Purchaser with Product
manufactured without such change until (i) Purchaser has qualified the
new Product and (ii) the approval of any amendment or supplement to
Purchaser's regulatory submissions necessitated by and referencing such
change and the new DMF, is obtained.
10. INSURANCE
10.1 Purchaser and Supplier each agree to maintain in force product
liability insurance, during the term of this Agreement and for a period
of 2 years after expiration or termination hereof for any reason.
During the period prior to commercialization of Finished Product, the
following minimum product liability insurance coverage shall be in
place:
Purchaser: U.S. $ 5 Million.
Supplier: U.S. $ 5 Million.
Upon commercialization of Finished Product, the coverage limits will be
reviewed and modified as appropriate.
10.2 Each party shall upon request provide to the other copy of the relevant
insurance policy.
11. FORCE MAJEURE
11.1 Supplier shall not be liable to Purchaser for any loss, cost, expense,
damage or injury suffered by Purchaser, any third person or any
property, whether direct or indirect, incidental or consequential, for
failure to deliver or delay in delivering the Product (or any portion
of the Product duly ordered by Purchaser and accepted by Supplier) and
Purchaser shall not be liable to Supplier for any loss, cost, expense,
damage or injury suffered by Supplier, any third person or any
property, whether direct or indirect, incidental or consequential, for
failure to accept or delay in accepting the Product (or any portion of
the Product ordered by Purchaser from Supplier), when any such failure
is due to force majeure and without the fault or negligence of the
party so failing or delaying. For purposes of this Agreement, "Force
Majeure" is defined as causes beyond the control of the party affected,
including, without limitation (as each of the following relates to a
party or a supplier to a party): acts of God; acts, regulations,
decrees, restrictions
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(including restrictions on the exportation or importation of the Product
or crops or materials related to the manufacture of the Product) or laws
of, or inaction by, any government; embargoes; seizure of cargo; wars
(whether or not declared); civil commotion; destruction of production
facilities or materials by fire, food, drought, earthquake, explosion or
storm; labor disturbances; epidemics; and failure of public utilities or
common carriers.
11.2 The party affected by Force Majeure shall give prompt notice to the
other party (the "Force Majeure Notice") and take any reasonable steps as
are necessary to relieve the effects thereof as rapidly as possible.
11.3 If Force Majeure lasts for more than 3 months the party which received
a Force Majeure Notice may terminate this Agreement by written notice of
termination mailed to the other by registered letter return receipt
requested.
12. CONFIDENTIALITY
12.1 Any confidential information pertaining to the Product that has been or
will be communicated by Supplier to Purchaser, and any confidential
information pertaining to the Finished Product communicated by Purchaser
to Supplier, including without limitation, trade secrets, business
methods and plans, pricing, costs, suppliers, manufacturing and customer
information, shall be kept strictly secret by Purchaser and Supplier,
respectively, and their respective affiliates, officers, directors,
employees, agents and representatives, provided, however, that the
restrictions and prohibitions set forth in this Section 12 shall not
apply to the extent that such information:
(a) is available to the public in public literature or otherwise, or
after disclosure by one party to the other becomes public
knowledge through no fault of the party receiving such
confidential information;
(b) was known to the party receiving such information prior to
disclosure by the other party as demonstrated by written records
or documentation;
(c) is obtained by the party receiving such information from a third
party entitled to disclose it without breaching confidentiality
obligations to the disclosing party;
(d) is required to be disclosed pursuant to any order of a court
having jurisdiction or any lawful action of a governmental or
regulatory agency; or
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(e) is independently developed by the party receiving such
information, without use of confidential information disclosed by
the other party as demonstrated by written records or
documentation.
12.2 Each party shall take all precautions as it normally takes with its own
confidential information to prevent any improper disclosure of such
confidential information to any independent third party; provided,
however, that such confidential information may be disclosed within the
limits required to obtain any authorization from regulatory authorities
in the Territory or, with the prior written consent of the other party,
which shall not be unreasonably withheld, as may otherwise be required in
connection with the purpose of this Agreement.
12.3 This Section 12 and the obligations contained herein shall survive for a
period of seven years from the date of expiration or termination of this
Agreement for any reason whatsoever.
13. TERMINATION
13.1 Either party shall be entitled to terminate this Agreement by written
notice mailed to the other party by registered letter return receipt
requested in the event that Purchaser publicly announces that it has
terminated efforts to obtain FDA Approval for Finished Product.
Furthermore, should not Purchaser pursue regulatory approval or
commercialization in a particular region or country, Supplier shall be
entitled to enter an exclusive supply agreement with another party for
that particular region or country, and the Territory shall be reduced
accordingly.
13.2 Either party shall have the right to terminate this Agreement in
accordance with the following provisions:
(a) immediately upon written notice of such termination to the other
party, if the other party does not generally pay its debts as such
debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the
benefit or creditors; or any proceeding shall be instituted by or
against the other party seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization or
relief of debtors, or seeking the entry of an order for relief or
the appointment of a receiver, trustee, or other similar official
for it or for any substantial part of its property, or the other
party takes any corporate action to authorize any of the actions
set forth above; or
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(b) if the other party is in breach of any of its material obligations
under this Agreement, the injured party will have the right,
without prejudice to any other rights to terminate this Agreement,
by giving 60 days' written notice to the party who has breached,
and such notice will automatically become effective unless the
party who has breached remedies such breach to the reasonable
satisfaction of the party seeking termination within such sixty
day period.
13.3 The termination of this Agreement, for any reason, shall not affect any
right or obligation already accrued hereunder nor the stipulations that
are expressly stated to survive.
If the Agreement is terminated Purchaser shall cease to use any
confidential data and information received from Supplier hereunder and
shall cease to refer to Supplier's DMF, provided that if the Agreement is
terminated by Purchaser pursuant to Section 13.2 Purchaser shall have a
period of 12 months to comply with these obligations in order to dispose
of stock of Product on hand at the date of termination.
14. TERM
14.1 This Agreement enters into force as of the Effective Date and, unless
earlier terminated in accordance herewith, shall last until December 31,
2006 (the "INITIAL TERM").
14.2 At the expiration of the Initial Term, this Agreement shall be
automatically renewed for another two-year period, and so on, unless
either party sends notice of termination to the other party by registered
letter return receipt requested mailed at least 12 months before the
original or any subsequent expiration date.
15. MISCELLANEA
15.1 This Agreement shall inure to the benefit of, and shall be binding upon,
each of the parties hereto and their respective successors and any
purchaser of a substantial part of either party's assets or operations.
The assignment of this Agreement or of rights and obligations deriving
therefrom to a third party shall be otherwise subject to the obtaining of
the written consent of the other party, provided that no consent shall be
required for any such assignment by either party to one of its
Affiliates.
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15.2 This Agreement contains the entire agreement between the parties hereto,
and supersedes any general terms and conditions of sale or purchase of
the parties hereto. It may be amended or modified only by a writing
signed by both parties hereto.
15.3 This Agreement is on a principal to principal basis. Neither party is
authorized to assume commitments in the name or on behalf of the other
party nor shall it incur any liability whatsoever for which the other may
become directly, indirectly or contingently liable.
15.4 Should any term or condition of this Agreement be held invalid,
unenforceable or anyhow in conflict with applicable laws or regulations
this shall not affect the validity and enforceability of the other
provisions of this Agreement and the parties shall agree in good faith
and substitute the invalid, unenforceable or conflicting provision with
other valid and enforceable provisions which achieve to the maximum
extent permitted the same financial and economic balance originally
provided.
15.5 Without prejudice to other express provisions contained herein, any
notice which shall or may be given by one party to the other in
connection with this Agreement shall be valid only if delivered in person
or sent by registered letter return receipt requested or by telefax as
follows:
- if to Supplier:
INDENA SpA
Xxxxx Xxxxxx, 00
00000 Xxxxxx
(Xxxxx)
telefax: (+39)(00) 00000000
attention: Director of Business Development
and Agreements
- if to Purchaser:
SONUS PHARMACEUTICALS, INC.
00000 00xx Xxxxxx XX
Xxxxxxx, XX 00000
XXX
Telefax: 000-000-0000
attention: Vice President, Business Development
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Any change of these addresses shall be promptly communicated in writing
from either party to the other party in accordance herewith.
Notices delivered in person shall be effective immediately. Notices sent
by telefax shall be effective immediately if received on a working day;
if not, they shall be effective the following working day. Notices sent
by letter shall be effective upon receipt, unless the letter merely
confirms a previous notice by telefax.
15.6 The Section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
15.7 This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, without regard to conflict of laws
principles and the United Nations Convention on Contracts for the
International Sale of Goods.
15.8 Any dispute which may arise between the parties out of, or relating to,
this Agreement or supplies hereunder (including, not by way of
limitation, those concerning validity, interpretation, breach,
termination, prejudicial or competence matters), which the parties are
unable to settle amicably in good faith, shall be finally settled by
three arbitrators appointed and acting pursuant to the then prevailing
Rules of Conciliation and Arbitration of the International Chamber of
Commerce. The Arbitration shall be held in New York and the English
language shall be used throughout the proceedings.
15.9 This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute
one and the same instrument. This Agreement may be executed by either
party by copy transmitted by telefax and the executed counterpart so
transmitted shall be as effective as a manually executed counterpart.
IN WITNESS WHEREOF, the authorized representatives of the parties have executed
this Agreement on the dates indicated below.
INDENA SpA SONUS PHARMACEUTICALS, INC.
By: /s/ Xxxxx Xxxxxxxxx By: Xxxxxxx X. Xxxxxxx
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(Xxxxx Xxxxxxxxx) (Xxxxxxx X. Xxxxxxx)
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Title: Chief Executive Officer Title: President and CEO
Date: January 22, 2002 Date: January 22, 2002
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