SUPPLY AGREEMENT
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Confidential Materials omitted and filed separately with the
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Securities and Exchange Commission. Asterisks denote omissions.
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Exhibit 10.1
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May 7,
2007
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Xxxx,
Inc.
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IDEXX
Operations, Inc.
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X.X.
Xxx 000
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One
IDEXX Drive
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Pasadena,
MD 21123-0189
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Xxxxxxxxx,
XX 00000
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(“Xxxx”)
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(“IDEXX”)
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IDEXX
desires to purchase from Xxxx certain chromogen substrates to be incorporated
into various of IDEXX’s veterinary diagnostic products. Xxxx hereby
agrees to provide IDEXX with such chromogen substrates described below in such
quantities as IDEXX may order from time to time on the following terms and
conditions:
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PRODUCTS:
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The
chromogen substrates described and in conformity with the specifications
on Schedule
A (the “Products”). This
Agreement and Schedule A may
only be amended by the parties’ mutual agreement. The parties
acknowledge that the terms and conditions of this Agreement and the
quantities of the Products purchased by IDEXX hereunder shall be treated
as confidential information pursuant to the confidential disclosure
agreements previously entered into by the parties on March 1,
2001.
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PRICING:
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As
set forth on Schedule
B. Prices are fixed through 31 December
2008. Thereafter, Xxxx shall notify IDEXX in writing at least
120 days before each subsequent calendar year of any changes in the prices
of Products; provided,
however, that in no event shall Xxxx increase prices in any given
calendar year greater than [**]%.
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Payment
terms shall be net thirty (30) from the date IDEXX receives Xxxx’
invoice.
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SHIPPING:
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Shipping
terms are F.O.B. Xxxx’ facility in Hanover, Maryland. Title to
and risk of loss for Products shall pass to IDEXX upon delivery to the
carrier (specified by IDEXX) at Xxxx’ facility in Hanover,
Maryland. Xxxx shall cooperate with IDEXX in the documentation
and proof of loss claims presented by IDEXX to the appropriate carrier
and/or insurer.
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Xxxx
shall pack and ship Products in the manner described on Schedule A, and
otherwise consistent with Xxxx’ usual practices, which shall be at least
reasonably satisfactory to ensure that the Products are received by IDEXX
undamaged. Costs of packing are included in the Prices set forth on
Schedule
B.
SPECIFICATIONS
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AND
VALIDATION:
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As
set forth on Schedule A, as
may be amended from time to time by the parties’ mutual
agreement.
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Xxxx
shall not change the specifications attached hereto as Schedule A,
without Xxxx providing IDEXX at least 12 months’ prior written notice (any
such notice, a "Products Change
Notice"), unless a shorter time frame can be mutually agreed, in
order to permit IDEXX to evaluate such proposals and to verify that
regulatory, performance and quality criteria will be
satisfied. IDEXX shall have the right to approve or disapprove
all proposed changes before the incorporation of such changes into the
Products. In the course of IDEXX’s evaluation of such change,
IDEXX shall promptly notify Xxxx of any test result that indicates such
change will fail to meet any such criteria. Upon written
approval by IDEXX of changes in the specifications described in a Products
Change Notice, the approved changes shall be deemed to be incorporated in
Schedule
A.
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QUALITY:
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In
order to ensure quality and resolve any issues that may arise with the
Products, Xxxx shall permit IDEXX access to Xxxx’ facilities as described
in Schedule
C.
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ORDERS:
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IDEXX
shall order Products from Xxxx by written purchase orders ("Orders"),
stating the number of Products ordered , one or more scheduled delivery
dates (which shall be not less than 30 days after order date), and one or
more delivery destinations. Each Order shall be accompanied by
the then current version of the agreed specifications. Xxxx
shall accept and fill all Orders for Products placed under this Agreement
that specify delivery dates within the Term and that conform to the
preceding sentence and acknowledge such acceptance in writing within 5
days after receipt of the Order.
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[**].
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FORECASTS:
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IDEXX
shall furnish to Xxxx not less than 30 days before the commencement of
each calendar quarter during the term of this Agreement a forecast of the
quantity of the Products for which IDEXX expects to submit Orders in such
calendar quarter and the three succeeding calendar
quarters. Each such forecast after the first shall update and
replace prior forecasts as to the calendar quarters covered by such prior
forecasts. It is understood that such forecasts are merely
estimates and are not to be considered
Orders.
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LOT
ACCEPTANCE:
A. As soon as such is available, Xxxx shall ship to IDEXX a
sample (the "Sample") of each manufacturing lot from which an order of
[**] (Part Nos.: 00-00000-00 and 23-01788-00) is
to be filled. All quantities represented by the Sample shall be
included in any invoice that Xxxx provides to IDEXX relating to such lot of
Products. IDEXX shall use such Sample for the purpose of subjecting
it to inspection and performance testing. IDEXX shall have a maximum
of [**] business days from receipt of a Sample to complete such
testing and notify Xxxx in writing of acceptance or rejection of the Sample. If IDEXX does not deliver such
written notice to Xxxx within such [**] business day period, Xxxx shall be authorized to ship
the Product in accordance with the Orders. If IDEXX notifies Xxxx that IDEXX has
rejected the Sample, Xxxx shall, within twenty business days, replace the
rejected Product and submit a new Sample to IDEXX for testing.
X. Xxxx
shall perform the in-process Product inspection and testing procedures developed pursuant to Schedule C to this Agreement
on the [**] Products (Part Nos.:
00-00000-00, 00-00000-00 and 02-07510-00) ordered by IDEXX. Before
shipping any Product, Xxxx shall supply IDEXX with documentary evidence of such
testing and the results thereof in the format agreed upon by the parties
pursuant to Schedule C.
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TERM:
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The
date of this Agreement through termination by either party by providing
written notice of termination not less than 24 months’ prior to the
effective date of such termination.
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ESCROW:
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Xxxx
hereby agrees to deposit copies of
Xxxx’ manufacturing information relating to the Products (as such
documentation currently exists) with Iron Mountain Intellectual Property
Management, Inc. (the “Escrow Agent”) for the Escrow Agent to keep in
confidence and to be released to IDEXX solely upon the occurrence of
certain triggering events as more particularly described
below. Xxxx further agrees to update its deposit of such
information from time to time as required so that the information on
deposit with the Escrow Agent is complete, current and
accurate. Upon Xxxx depositing its manufacturing information
with the Escrow Agent, or upon Xxxx’ updating of such manufacturing
information thereafter, IDEXX’s operations manufacturing manager,
technical support manager or quality support manager ([**]) shall have the
opportunity to review such manufacturing information to verify that such
information is in a form that would allow IDEXX to use such information to
manufacture the Products upon the occurrence of one of the triggering
events discussed below. Prior to its review of any
manufacturing information (either upon initial deposit or the updating of
such information), IDEXX shall provide Xxxx with the name of the person
who shall conduct such review. Representatives from Xxxx shall
have the right and opportunity to be present for the duration of such
review. Following such review, Xxxx’ manufacturing documents
shall be immediately placed in the possession of the Escrow Agent and
shall not be viewed again by anyone at IDEXX unless and until the
occurrence of one of the triggering events listed
below.
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IDEXX and
Xxxx agree that the Escrow Agent shall be only be permitted to release Xxxx’
manufacturing documents to IDEXX upon the occurrence of one of the following
triggering events: (i) Xxxx or a successor in interest to Xxxx by merger, by
operation of law, assignment, purchase or otherwise, ceases to provide the
Products to IDEXX, (ii) Xxxx has a receiver, administrator or liquidator
appointed to the whole or any substantial part of its assets or if an order is
made or a resolution passed for the winding up of Xxxx which is not revoked
within thirty (30) days, (iii) Xxxx fails, for any reason, including on
account of an event of force majeure as described below, to deliver on a timely
basis all quantities of Products ordered pursuant to one or more valid orders
placed in compliance with the terms of this Agreement, which failure continues
for a period of [**] days; (iv) Xxxx fails, for any reason, including an
event of force majeure, to deliver Products which conform to the applicable
specifications, which failure is not corrected within [**] days after notice
thereof; or (v) any other event occurs, including an event of force
majeure, which renders Xxxx incapable of supplying Product to IDEXX pursuant to
this Agreement if it reasonably foreseeable that such inability shall continue
for [**] days or more. Upon the occurrence of any of the triggering
events described above, IDEXX agrees to use Xxxx’ manufacturing information only
for its own internal purposes and to utilize strict security measures to keep
such information confidential.
In the
event that a triggering event occurs and IDEXX commences manufacture of the
Products as set forth above, IDEXX shall pay Xxxx a royalty of [**]% of the
price per Product set forth on Schedule
B. Further, in the event that a triggering event occurs and
IDEXX commences manufacture of the Products as set forth above, Xxxx shall make
its employees available to IDEXX, at IDEXX’s expense, to assist IDEXX with its
commencement of manufacturing the Product, under the condition that those Xxxx
employees are not involved in manufacturing the Products at Xxxx’x
facilities. If and when Xxxx regains its ability to manufacture
IDEXX’s requirements of the Products, IDEXX shall cease manufacturing the
Products for itself, shall destroy all copies of such manufacturing documents
(whether in hard copy or electronic form) and shall return Xxxx’ original
manufacturing documents into escrow with the Escrow Agent and provide Xxxx with
written certification that it has done so. In addition, if and when
Xxxx regains its ability to manufacture IDEXX’s requirements of the Products,
Xxxx shall purchase from IDEXX, at cost, all of the unused raw materials that
IDEXX purchased to manufacture the Products, provided however that Xxxx shall
not be required to purchase any amounts of raw materials in excess of those
necessary to create [**] liters of the
Product. All unused raw materials that are purchased by Xxxx from
IDEXX must meet Xxxx’x raw materials specifications. If the raw
materials to be purchased do not meet Xxxx’x specifications, Xxxx will not be
required to purchase such raw materials.
Upon
termination or expiration of this Agreement, the Escrow Agent shall return all
of Xxxx’ manufacturing documents to Xxxx, or at Xxxx’ request, the Escrow Agent
shall destroy such information and certify to Xxxx in writing that it has done
so.
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WARRANTY:
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Xxxx
warrants to IDEXX that it shall produce the Products in conformity to the
specifications set forth on the attached Schedule
A. In the event that any Products delivered to IDEXX do
not, conform to such specifications, Xxxx agrees to replace such Products
at no cost to IDEXX.
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Throughout
the term of this Agreement, Xxxx shall maintain commercial general liability
insurance covering Xxxx’activities under this Agreement, with a coverage limit
of not less than US $[**] million Xxxx shall provide IDEXX with a
certificate evidencing its respective insurance coverages as IDEXX shall request
from time to time.
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MISCELLANEOUS:
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This
Agreement shall be governed by the laws of the State of (Maryland) and
cannot be modified except in writing signed by authorized representatives
of both parties.
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This
Agreement, which includes the confidential disclosure agreements previously
signed by the parties on March 1, 2001 (the term of which extends through 2026
and which is unaffected by this Agreement) constitutes the entire agreement
between the parties with respect to the subject matter hereof and, other than as
set forth herein to the contrary, supersedes all prior agreements and
negotiations relating to the subject matter hereof.
Any term
or condition set forth in any document provided by either party to the other,
included IDEXX’s terms and conditions of purchase and Xxxx’ terms and conditions
of sale, which is in any way different from, inconsistent with or in addition to
the terms and conditions set forth herein will not become a part of this
Agreement or be binding on either party.
Each
party to this Agreement shall comply with all applicable laws and regulations
relating to the Products and their respective performance under this
Agreement.
Neither
party may assign this Agreement or any of the rights or obligations hereunder,
or subcontract performance, without the prior written consent of the other
party, except that either party may assign this Agreement to any affiliate, or
to any person or entity that acquires all or substantially all of such party’s
assets or business, provided that any such successor or assignee agrees to
perform and assume such party’s duties under this Agreement.
If 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.
Any
controversy or claim arising out of or relating to this agreement, or the breach
thereof, shall be settled by arbitration conducted in the state of
Maryland and administered by the American Arbitration Association under its
Commercial Arbitration Rules, and judgment on the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction
thereof.
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 or default 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 operated as a waiver
of any right, power or privilege by such party.
Please
indicate your acceptance of this Agreement by signing one copy and returning it
to the address above:
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XXXX, INC.
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IDEXX OPERATIONS, INC.
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/s/ Xxxxxxx X. Xxxxxxx
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/s/ Xxx Xxxxx
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Name:
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Xxxxxxx X. Xxxxxxx
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Name:
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Xxx Xxxxx
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Title:
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Chairman and CEO
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Title:
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Chairman, President and CEO
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SCHEDULE
A
Products Description and
Specifications
General Products
Description:
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00-00000-00
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one
part [**] substrate specifically
for [**]
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00-00000-00
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one
part [**] substrate specifically for
[**]
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00-00000-00
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[**]
one part substrate for use in [**]
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00-00000-00
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[**]
one part substrate for use in [**]
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00-00000-00
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[**]
substrate for alkaline phosphatase
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Products
Specifications:
See attached.
[**]
A total
of eight pages were omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential
treatment.
SCHEDULE
B
Price and
Packaging
2006 Per-Product
Price:
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00-00000-00
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$[**]/Lt
with a minimum order of [**] liters
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00-00000-00
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$[**]/Lt
with a minimum order of [**] liters
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00-00000-00
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$[**]/[**]
ml bottle minimum order of [**]
bottles
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00-00000-00
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$[**]/[**]
ml bottle minimum order of [**]
bottles
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00-00000-00
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$[**]/[**]
ml fill minimum order of [**]
bottles
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2007 and 2008 Per-Product
Price:
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00-00000-00
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$[**]/Lt
with a minimum order of [**] liters
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00-00000-00
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$[**]/Lt
with a minimum order of [**] liters
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00-00000-00
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$[**]/[**]
ml bottle minimum order of [**]
bottles
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00-00000-00
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$[**]/[**]
ml bottle minimum order of [**]
bottles
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00-00000-00
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$[**]/[**]
ml fill minimum order of [**]
bottles
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Packaging:
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00-00000-00
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sample;
[**] Lt cubitainer, minimum [**] liter fill. Bulk; [**] Lt
cubitainer
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00-00000-00
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sample;
[**] Lt cubitainer, minimum [**] liter fill. Bulk; [**] Lt
cubitainer
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00-00000-00
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Xxxxx,
polyethylene [**] ml bottle,
unlabeled
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00-00000-00
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Xxxxx,
polyethylene [**] ml bottle,
unlabeled
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00-00000-00
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Xxxxx,
polyethylene [**] ml bottle,
unlabeled
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SCHEDULE
C
Validation, In-process
Testing, IDEXX Test and Acceptance and Facility Access
In-process
Testing:
IDEXX and
Xxxx have agreed to the Product Control Plan set forth at Schedule D which
shall document the in-process control strategy for on-going specification
compliance. The Product Control Plan shall be revision
controlled. The parties may agree to changes to the Product Control
Plan from time to time to ensure quality of Products and conformity with
applicable specifications, and otherwise as new monitoring methodologies become
available or new standards are generally adopted in the
industry. Each revision of the Product Control Plan shall be dated
and approved in writing by IDEXX and Xxxx.
IDEXX Access to Xxxx
Facilities:
In the
event that IDEXX experiences recurring, emergent defects or anomalies in the
IDEXX products in which the Products are incorporated, the proper investigation
of which warrants and necessitates raw material root cause evaluation by IDEXX,
Xxxx shall grant IDEXX access to its US manufacturing facility or facilities
that manufacture the Products (“Facilities”) for the
purpose of auditing Xxxx’ processes and quality to discover any such quality or
process issues. Such IDEXX access by Xxxx shall be subject to the
following limitations:
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a)
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The
date and time of such access shall be mutually agreed upon with at least 2
weeks prior notice and shall take place within Xxxx’ normal business
hours;
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b)
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IDEXX
shall present Xxxx with the name(s) of personnel visiting which shall be
limited to 3 or less individuals per
visit;
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c)
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IDEXX’s
access to Xxxx’ Facilities is for the purpose of, and limited to,
discussions and consultation regarding any root cause analysis or to
expedite any delivery or quality issues, and shall not be for the
purpose of in-process inspections by IDEXX;
and
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d)
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All
personnel visiting shall (i) be bound by the terms of this agreement, (ii)
be bound by the confidential disclosure agreements previously executed by
IDEXX and Xxxx, and (iii) comply with XXXX' safety and security
policies.
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SCHEDULE
D
Product Control
Plan
See
attached.
[**]
A total of three pages were
omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
