Exhibit 2.02
SUPPLY AGREEMENT
This Supply Agreement (this "Supply Agreement"), dated as of the 28th day of
October, 2003 (the "Effective Date"), is made by and between MERCK SHARP & DOHME
(IRELAND) LIMITED, a corporation organized and existing under the laws of
Bermuda, which is engaged in business in the Republic of Ireland ("MSD IRELAND")
and GUILFORD PHARMACEUTICALS INC., a corporation organized and existing under
the laws of the State of Delaware ("GUILFORD").
WITNESSETH:
WHEREAS, pursuant to the terms of that certain Asset Transfer and License
Agreement between Merck & Co., Inc., an Affiliate (as hereinafter defined) of
MSD IRELAND ("Merck"), and GUILFORD, dated as of the date hereof (the "Asset
Agreement"), Merck has agreed to sell, license and transfer to GUILFORD
effective as of the Effective Date, certain assets in the Territory (as such
term is defined in the Asset Agreement), including the U.S. New Drug Application
for AGGRASTAT(R).
WHEREAS, in conjunction with the Asset Agreement, GUILFORD and MSD IRELAND have
agreed to enter into this Supply Agreement, on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the agreements and covenants contained
herein, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. DEFINITIONS
The following terms as used in this Supply Agreement, whether used in the
singular or the plural, shall have the meanings as set forth in this
Article 1. References to "Articles", "Sections" and "subsections" in this
Supply Agreement shall be to Articles, Sections and subsections
respectively, of this Supply Agreement unless otherwise specifically
provided.
1.1 "Affiliate" shall mean (a) any corporation, company or business
entity, fifty percent (50%) or more of the voting stock or other
equity interests of which are owned directly or indirectly by either
party; (b) any corporation, company or business entity which owns,
directly or indirectly, fifty percent (50%) or more of
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
the voting stock or other equity interest of either party; or (c) any
corporation, company or business entity under the direct or indirect
control of a corporation, company or business entity as described in
Section 1.1(a) or (b).
1.2 "API" shall mean tirofiban hydrochloride.
1.3 "Applicable Laws" shall mean the applicable provisions of the United
States (federal, state and territorial) constitutions, statutes, laws,
rules, regulations and orders of all applicable United States
(including its territories) governmental authorities and all applicable
orders, rules and decrees of United States (including its territories)
courts.
1.4 "Asset Agreement" shall have the meaning given such term in the
recitals to this Supply Agreement.
1.5 "Bags" shall mean finished solution of the API, packaged in a
final finished labeled form in either the 100 mL pre-mixed bag and/or
the 250mL pre-mixed bag.
1.6 "Calendar Year" shall mean the twelve-month period during the Term
commencing on January 1 and ending on December 31.
1.7 "cGMP" shall mean current United States Good Manufacturing
Practices, as specified in the United States Code of Federal
Regulations.
1.8 "Effective Date" shall have the meaning given such term in the
introductory paragraph to this Supply Agreement.
1.9 "FDA" shall mean the United States Food and Drug Administration or
any successor organization.
1.10 "Finished Product" shall mean either or collectively, as the context
requires, Bags and/or Vials, ready for administration.
1.11 "Firm Order" shall mean a binding non-cancelable agreement to
purchase Supplied Product as evidenced by a purchase order and delivered
to MSD IRELAND by GUILFORD in accordance with Article 3.
1.12 "Force Majeure" shall have the meaning set forth in Section 12.1.
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
1.13 "GUILFORD Image" shall mean the labeling to be used by GUILFORD in
connection with the marketing, sale and distribution of the Supplied
Product in the Territory, which labeling shall include GUILFORD's NDC
number.
1.14 "GUILFORD Image Product" shall mean Finished Product using the
GUILFORD Image.
1.15 *
1.16 *
1.17 "Manufacture/Manufacturing/Manufactured" shall mean all operations
in the acquisition of Materials, production, packaging, labeling (except
for labeling as otherwise provided in Section 3.6 and only to the extent
that MSD IRELAND is supplying Finished Product in accordance with
Section 3.6) and quality control testing of Supplied Product.
1.18 "Materials" shall mean all active pharmaceutical ingredients, raw
materials, excipients, bulk packaging components (e.g., drums, etc.)
and, only to the extent MSD IRELAND is supplying Finished Product and
subject to GUILFORD's obligations set forth in Section 3.6, packaging
and labeling components, and other items used to Manufacture Finished
Product.
1.19 "MSD IRELAND Image Product" shall have the meaning set forth in
Section 3.6.
1.20 "Net Sales" shall have the meaning set forth in the Asset Agreement.
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
1.21 "New Drug Application" or "NDA" shall mean the two new drug
applications (as defined in 21 C.F.R. Section 314.3) for the Supplied
Products as filed under the United States Food, Drug and Cosmetic Act.
1.22 "Process Patents" shall mean the following United States patents,
number US 5,206,373 and US 5,312,923.
1.23 "Securities Laws" shall mean the United States Securities Act of
1933, as amended, the United States Securities Exchange Act of 1934, as
amended, and any other similar law or regulation of a United States
governmental authority, or any successor to any such laws or
regulations, together with any rules, regulations or listing standards
or agreements of any national or international securities exchange or
The NASDAQ Stock Market, as generally applicable.
1.24 "Specifications" shall mean the quality specifications for the
Supplied Product as specified on Exhibit B, as may be amended from time
to time in accordance with this Supply Agreement.
1.25 "Supplied Product" shall mean, as the context requires, (i) API;
and/or (ii) Finished Product, as supplied pursuant to the terms and
conditions of this Supply Agreement.
1.26 "Supply Agreement" shall have the meaning given such term in the
introductory paragraph to this agreement.
1.27 "Term" shall have the meaning given such term in Section 11.1.
1.28 "Territory" shall have the meaning given such term in the Asset
Agreement.
1.29 "Transition Agreement" shall mean that certain Transition Services
Agreement dated as of the Effective Date, by and between Merck and
GUILFORD.
1.30 "Transition Period" shall have the meaning given such term in the
Transition Agreement.
1.31 "Variable Per Unit Price" shall have the meaning set forth in
Section 4.2.
1.32 "Vials" shall mean, a concentrated solution of the API packaged in
a final finished labeled form or in an unlabeled form, as the case may
be, in a 50 xx xxxx.
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
2 SUPPLY OF SUPPLIED PRODUCT
2.1. Subject to Sections 2.2, 2.3 and 2.4, Article 12 and Article 31, MSD
IRELAND agrees to supply, or cause its Affiliate or third party to
supply, to GUILFORD, and GUILFORD agrees to purchase from MSD IRELAND,
MSD IRELAND's Affiliate or third party, as the case may be, all of
GUILFORD's requirements for Supplied Product for the Term in accordance
with the terms and conditions of this Supply Agreement. The decision as
to whether to Manufacture the Supplied Product or have Manufactured by
an Affiliate of MSD IRELAND or third party such Supplied Product shall
be made by MSD IRELAND in its sole discretion; provided, that any
changes to the Manufacturing process or the manufacturer of Supplied
Product shall be in accordance with Section 7.8; and provided further,
however, that notwithstanding any such assignment, transfer, license or
delegation, as applicable, MSD IRELAND shall remain responsible to
ensure supply of Supplied Product in accordance with the terms and
conditions of this Supply Agreement.
2.2. *
(a) *
(b) *
(c) *
(d) *
(e) *
(f) *
(g) *
2.3. *
(a) *
(b) *
(c) *
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
(d) *
2.4. *
(a) *
(b) *
(c) *
2.5. Notwithstanding anything contained in this Supply Agreement or the Asset
Agreement to the contrary and for the avoidance of any doubt, the
parties expressly agree that any royalty obligation set forth in the
Asset Agreement shall not be affected (nor shall GUILFORD be relieved of
any royalty obligation), whether or not MSD IRELAND is able to supply
Supplied Product.
3. ORDERS
3.1. Orders for Delivery in the Transition Period.
(a) In order to ensure a smooth transition, attached hereto as Schedule
3.1, is a copy of the Firm Orders for delivery of Finished Product
during the Transition Period; the quantities are more particularly
described on Schedule 3.1. Schedule 3.1 also reflects the month of
manufacture and lot number of any MSD IRELAND Image Product existing in
MSD IRELAND's (or its Affiliate's) inventory on the Effective Date. On
the Effective Date, GUILFORD shall deliver to MSD IRELAND the actual
individual monthly Firm Orders for each month in the Transition Period.
(b) Firm Orders during the Transition Period for GUILFORD Image Product
shall not specify delivery unless such delivery is no less than two
hundred and seventy (270) days after the Effective Date. Notwithstanding
the foregoing, in the event that the GUILFORD Image is available prior
to this time, MSD IRELAND and GUILFORD shall coordinate with each other
and will work to implement the GUILFORD Image as quickly as commercially
reasonable (even with respect to ordered MSD IRELAND Image Product, if
reasonably possible).
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
(c) Other than the Firm Orders contemplated by this Xxxxxxx 0.0, XXX
XXXXXXX shall have no further obligation to deliver any Supplied Product
to GUILFORD during the Transition Period, but shall use reasonable
efforts to accommodate any proposed increase to the Firm Orders; but
shall not be held liable for failure to do so.
3.2. Orders relating to Finished Product for Delivery after the Transition
Period.
(a) In order that MSD IRELAND may properly and economically plan
production of Finished Products, on or before the fifteenth (15th)
calendar day of each month, commencing within thirty (30) days after the
Effective Date, GUILFORD will provide MSD IRELAND with a written rolling
twenty-four (24) month forecast of GUILFORD's monthly requirements of
Finished Products, broken down into each image of Bags and Vials.
Exhibit C sets forth the format in which each forecast shall be provided
to MSD IRELAND and GUILFORD shall deliver each such forecast to a person
designated from time to time by MSD IRELAND. Firm Orders must be made in
full lot quantities as reflected in Exhibit A.
(b) The first six (6) months of each twenty-four (24) month forecast as
set forth in the form of Exhibit C shall constitute Firm Orders and
GUILFORD shall be required to deliver to MSD IRELAND with its
twenty-four month forecast, a Firm Order evidencing the sixth month of
the twenty-four month forecast.
(c) In addition to the rolling monthly forecast, commencing within
thirty (30) days after the Effective Date, and thereafter by July 1 of
each Calendar Year, GUILFORD shall provide MSD IRELAND with a long range
plan containing a non-binding estimate of annual requirements of
Finished Product through and including the period ending on (i) December
31, 2004, with respect to Vials and (ii) August 18, 2007, with respect
to Bags. Exhibit C-1 sets forth the format in which each long-range plan
shall be provided. GUILFORD shall use all commercially reasonable
efforts to make its estimated long range forecast a reasonable basis for
MSD IRELAND's production planning and capacity investment.
(d) The monthly requirements for Finished Product for the sixth month in
each rolling forecast shall not be less than seventy-five percent (75%),
nor more than one hundred twenty-five percent (125%) of that month's
rolling forecast issued
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
in the immediately preceding forecast, when that month was the seventh
month in the forecast.
3.3. Orders relating to API for Delivery after the Transition Period
(a) In order that MSD IRELAND may properly and economically plan
production of API, no later than January 1, 2004 and thereafter on or
before the fifteenth (15th) calendar day of each month, GUILFORD will
provide MSD IRELAND with a written rolling twenty-four (24) month
forecast of GUILFORD's monthly requirements of API. Exhibit D sets forth
the format in which each forecast shall be provided to MSD IRELAND and
GUILFORD shall deliver each such forecast to a person designated from
time to time by MSD IRELAND.
(b) The first six (6) months of each twenty-four (24) month forecast as
set forth in the form of Exhibit D shall constitute Firm Orders and
GUILFORD shall be required to deliver to MSD IRELAND with its
twenty-four month forecast, a Firm Order evidencing the sixth month of
the twenty-four month forecast; provided, however, that with respect to
the first twenty-four month forecast, GUILFORD shall provide six Firm
Orders evidencing each of the first six (6) months of the twenty-four
month forecast.
(c) In addition to the rolling monthly forecast, commencing within
thirty (30) days after the Effective Date, and thereafter by July 1 of
each Calendar Year, GUILFORD shall provide MSD IRELAND with a long-range
plan containing a non-binding estimate of annual requirements of API for
the next five (5) years. Exhibit D-1 sets forth the format in which each
long-range plan shall be provided. GUILFORD shall use all commercially
reasonable efforts to make its estimated long-range forecast a
reasonable basis for MSD IRELAND's production planning and capacity
investment. If at any time GUILFORD's long-range plan reasonably
suggests any supply issue, particularly as it relates to production
capacity, the parties shall discuss how to address the potential
shortage.
(d) The monthly requirements for API for the sixth month in each rolling
forecast shall not be less than seventy-five percent (75%), nor more
than one hundred twenty-five percent (125%) of that month's rolling
forecast issued in the immediately preceding forecast, when that month
was the seventh month in the forecast.
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
3.4. MSD IRELAND shall confirm in writing that a Firm Order has been accepted
within ten (10) business days of receipt thereof. MSD IRELAND shall
deliver against each such Firm Order in accordance with this Article 3.
The parties acknowledge and agree that such amounts and delivery dates
are an approximation of the total amount of Supplied Product to be
delivered by MSD IRELAND to GUILFORD on the anticipated delivery dates;
provided, that, the amount of the Supplied Product specified in a Firm
Order shall determine whether any shortage occurred pursuant to Article
2.
3.5. Firm Orders shall not be made in any form of document other than that
prescribed by this Supply Agreement unless the parties agree otherwise
in writing. Any term or condition of a Firm Order that is different from
or contrary to the terms and conditions of this Supply Agreement shall
be void. Except as contemplated by Article 11, all Firm Orders shall be
non-cancelable by either party and GUILFORD shall be obligated to pay
the Variable Per Unit Price for the Supplied Products supplied to
GUILFORD pursuant to each such Firm Order. MSD IRELAND agrees to make
reasonable efforts to comply with unplanned changes in Firm Orders, but
shall not be held liable for its inability to so comply.
3.6. (a) During the Transition Period, MSD IRELAND shall supply to GUILFORD
Finished Product using the label as it exists on the Effective Date with
Merck & Co., Inc.'s National Drug Code (the "MSD IRELAND Image
Product"); provided that the MSD IRELAND Image Product must be
distributed by MSD IRELAND (or its Affiliate) in accordance with the
Transition Agreement and this Supply Agreement. In the event that at the
end of the Transition Period, any inventory of MSD IRELAND Image Product
remains which has been ordered by GUILFORD pursuant to Firm Orders, MSD
IRELAND shall supply such MSD IRELAND Image Product to GUILFORD in
accordance with such Firm Orders and this Supply Agreement and GUILFORD
shall be allowed to exhaust such inventory; provided, that GUILFORD
expressly agrees to handle and store such MSD IRELAND Image Product in
accordance with cGMP and not to promote the MSD IRELAND Image Product in
any manner contrary to its labeling.
(b) GUILFORD agrees to use its reasonable efforts to expeditiously
obtain FDA approval for alternate labeling using the GUILFORD Image.
Notwithstanding anything to the contrary in this Supply Agreement, MSD
IRELAND shall not be obligated to supply after the Transition Period any
MSD IRELAND Image Product in accordance with Section 3.6(a) even if
GUILFORD has not obtained FDA approval for alternate labeling.
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
(c) During the Transition Period, MSD IRELAND shall supply MSD IRELAND
Image Product in accordance with Section 3.1. Thereafter, MSD IRELAND
shall only be obligated to supply GUILFORD Image Product of (x) Vials
until December 31, 2004 and (y) Bags until August 18, 2007; provided,
that GUILFORD shall be responsible for submitting to MSD IRELAND within
thirty (30) days after the Effective Date all Master Copy for its
proposed label in a format specified by MSD IRELAND and which is
compatible with MSD IRELAND's (or its Affiliate's or third party's)
equipment. Any costs associated with the labeling change shall be for
the account of GUILFORD. After such periods set forth in this Section
3.6(c), MSD IRELAND shall supply API during the Term to GUILFORD and MSD
IRELAND shall not be obligated to supply Vials and/or Bags.
Notwithstanding the foregoing, if ordered by GUILFORD in accordance with
this Article 3, MSD IRELAND shall supply API for delivery at any time
during the Term of this Supply Agreement; provided, however, that once
such API is delivered to GUILFORD, MSD IRELAND shall not have the
obligation to (nor shall it) formulate and/or package such API into
Finished Products.
(d) MSD IRELAND shall provide to GUILFORD no later than five (5) days
after the Effective Date, hard copies of all printed trade components
comprising the Finished Products (e.g., labels, cartons and circulars).
Notwithstanding the foregoing, GUILFORD shall be solely responsible for
the content of all print copy and GUILFORD shall ensure that all such
print copy complies with all Applicable Laws.
4. PRICE AND PAYMENT
4.1. The consideration for the Supplied Product shall consist of *
as follows: * payment of * by wire transfer to the account
designated in Section 4.3 below (the
" * "); * as set forth in *. The * whether or
not this Supply Agreement is terminated, cancelled or expired.
4.2. *
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
4.3. For Supplied Product to be delivered during the Transition Period, MSD
IRELAND shall invoice GUILFORD upon delivery of such Supplied Product to
GUILFORD. Thereafter, MSD IRELAND shall invoice GUILFORD for Supplied
Product upon the earlier of (i) delivery of the Supplied Product to
GUILFORD; provided, that MSD IRELAND has delivered the release
documentation to GUILFORD in accordance with Section 7.4 and GUILFORD
has released the Supplied Product or (ii) in the event that GUILFORD has
not released the Supplied Product, thirty days after the release
documentation specified in Section 7.4 has been delivered to GUILFORD.
All payments for Supplied Product shall be made in U.S. Dollars within
thirty (30) days after the date of invoice. Other than the Lump Sum
Payment, payment shall be remitted by wire transfer in immediately
available funds in the invoiced currency to a bank and account to be
designated in writing from time to time by MSD IRELAND or by certified
check drawn on a United States bank. The Lump Sum Payment shall be paid
by GUILFORD to MSD IRELAND by *:
*
Any payment not made when due shall bear interest at the lesser of (i)
1.0% per month or (ii) the maximum rate permitted under Applicable Law.
4.4. Any and all taxes (excluding income taxes based upon MSD IRELAND's
income or franchise fees or taxes) relating to the supply of Supplied
Product to GUILFORD hereunder, including, without limitation, sales
taxes required to be paid by any United States federal, state,
territorial or local authority shall be borne by GUILFORD. Official
receipts indicating proof of payment of any such taxes shall be secured
and made available to MSD IRELAND upon request as evidence of payment.
4.5. Any payment required to be made by one party to the other party pursuant
to the terms and conditions of this Supply Agreement shall be made in
United States Dollars, whether or not specified herein.
4.6. *
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
4.7. *
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
5. DELIVERY AND RISK OF LOSS
5.1. MSD IRELAND shall deliver or arrange for delivery of Supplied Product
purchased by GUILFORD to a carrier designated by GUILFORD (provided that
such designated carrier shall be approved by MSD IRELAND, such approval
not to be unreasonably withheld), FOB (UCC 2-319), MSD IRELAND's (or, as
the case may be, its Affiliate's or designated third party's)
manufacturing plant; provided, however, that in the event that GUILFORD
requests, MSD IRELAND shall facilitate the delivery of such Supplied
Product to GUILFORD's warehouse or other designated facility. For the
avoidance of any doubt, all shipping costs associated with the delivery
of Supplied Products (whether delivered to MSD IRELAND's (or, as the
case may be its Affiliate's or designated third party's) manufacturing
plant or GUILFORD's warehouse or other designated facility shall
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
be paid by GUILFORD. Each shipment shall be accompanied by a Certificate
of Analysis in accordance with Section 7.4 with respect to each lot
contained in such shipment.
5.2. Title to the Supplied Product sold hereunder shall pass to GUILFORD at
MSD IRELAND's (or as the case may be, its Affiliate's or designated
third party's) manufacturing plant, and MSD IRELAND's liability as to
delivery thereof and risk of loss shall cease at MSD IRELAND's (or, as
the case may be, its Affiliate's or designated third party's)
manufacturing plant. Notwithstanding the foregoing, it is understood
that the sale of Supplied Product is for the resale in the Territory
only. GUILFORD expressly acknowledges that MSD IRELAND and/or its
Affiliates have or may have patent rights in and outside the Territory
and GUILFORD obtains no rights, express or implied, with respect to any
patent rights related to Supplied Product outside the Territory.
6. WARRANTY AND LIMITATIONS
6.1. MSD IRELAND warrants, covenants and agrees that the Supplied Product
supplied by it hereunder shall, at the time of delivery, be Manufactured
and delivered (i) to meet the Specifications, (ii) in compliance with
cGMP, and (iii) in all material respects, in accordance with Applicable
Law. ALL OTHER WARRANTIES ARE EXPRESSLY DISCLAIMED, INCLUDING ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
6.2. Claims that Supplied Product did not, at the time of delivery, meet the
warranty specified in Section 6.1 must be made to MSD IRELAND (i) with
respect to defects that are apparent or which could have been found with
reasonable diligence, within thirty (30) days following delivery of such
Supplied Product in accordance with Article 5 and (ii) with respect to
all other defects, within thirty (30) days after the date that GUILFORD
discovered or should have discovered with reasonable diligence such
defect, and in either case, must be in writing, specifying in reasonable
detail the nature and basis of the claim and citing relevant control
numbers or other information to enable identification of the Supplied
Product in question. At MSD IRELAND's request, GUILFORD shall forward
for inspection a representative sampling of the Supplied Product that is
the subject of GUILFORD's claim. MSD IRELAND shall as soon as is
reasonably practicable inspect such samples and provide the results of
such inspection to
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
GUILFORD. If MSD IRELAND concurs with GUILFORD's claim, MSD IRELAND
shall, at GUILFORD's option, replace the defective Supplied Product
without any cost to GUILFORD, if commercially reasonable and possible,
or credit GUILFORD for the amount of the Variable Per Unit Price for
such quantities of Supplied Product. If the parties are unable to
resolve their differences, then either party may refer the matter to an
independent specialized firm of international reputation agreeable to
both parties for final analysis, which shall be a final resolution of
such issue, binding on both parties hereto and not subject to
arbitration pursuant to Article 14. No Supplied Product shall be
returned to MSD IRELAND without the prior written consent of MSD
IRELAND. If the Supplied Product is determined to have met such
warranty, then GUILFORD shall bear the cost of the independent
laboratory testing pursuant to this Section 6.2. If the Supplied Product
is determined not to have met such warranty, then MSD IRELAND shall bear
the costs of such laboratory testing and shall, at GUILFORD's option,
replace the defective Supplied Product without any cost to GUILFORD, if
commercially reasonable and possible, or credit GUILFORD for the amount
of the Variable Per Unit Price of such Supplied Product. The remedies
specified in this Section 6.2 shall constitute GUILFORD's sole and
exclusive remedy for claims under Section 6.1 and this Section 6.2 other
than with respect to third party claims or remedies under Article 2, in
which case Section 10.2 or Article 2, as the case may be, shall apply.
6.3. Any Supplied Product, which fails to meet the warranty specified in
Section 6.1, and which is in GUILFORD's or its Affiliate's control shall
be destroyed pursuant to MSD IRELAND's reasonable instructions and at
MSD IRELAND's expense. MSD IRELAND may, if it so requests, be present at
the destruction of such Supplied Product.
6.4. GUILFORD shall have the right to take any and all steps necessary or
desirable to transfer the Manufacture of the Finished Product to
GUILFORD or its Affiliate, or to establish an alternative supplier of
the Finished Product, in a manner consistent with this Supply Agreement;
provided, however, that during the Term and subject to Section 7.8 and
Article 31, GUILFORD shall not without MSD IRELAND's written consent
(which consent shall not be unreasonably withheld or delayed) change,
amend or alter the NDA in any way which materially adversely affects (i)
the fact that MSD IRELAND (or its Affiliate or third party manufacturer)
is Manufacturing the Supplied Product, (ii) the manner in which MSD
IRELAND (or its Affiliate or third party manufacturer) is Manufacturing
the Supplied Product,
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
or (iii) MSD IRELAND's or its Affiliate's other regulatory filings not
otherwise included in the Asset Agreement.
7. QUALITY CONTROL
7.1. MSD IRELAND shall Manufacture (or cause its Affiliates or third party to
Manufacture) Supplied Product which meets the Specifications, in
accordance with cGMP, and in accordance, in all material respects, with
Applicable Law.
7.2. Each party shall notify the other party orally within one (1) day of
receiving any customer complaints and reported defects relating to
Supplied Product, and shall confirm such notification to the other party
and provide all available details in writing within three (3) days
thereafter.
7.3. Subject to the remaining provisions of this Section 7.3, any recall of
Supplied Product instituted at the request of the FDA or voluntarily
instituted by GUILFORD for any reason shall be the responsibility of
GUILFORD, including any expenses related thereto; provided, that,
GUILFORD shall give to MSD IRELAND prior notice of any contemplated
recall and an opportunity to discuss and agree upon the appropriate
actions to be taken; provided, further, that GUILFORD shall not
voluntarily institute any recall unless and until MSD IRELAND agrees
with such decision (such agreement not to be unreasonably withheld or
delayed). GUILFORD shall indemnify MSD IRELAND against all costs
incurred in connection with such recall. MSD IRELAND shall cooperate
fully with GUILFORD in the conduct of any such recall. Notwithstanding
the foregoing but subject to Section 10.2 and Article 6, to the extent
that such recall arises out of MSD IRELAND's failure to supply Supplied
Product in accordance with the warranties set forth in Section 6.1 and
subject to Xxxxxxx 00.0, XXX XXXXXXX shall be responsible for the
expenses of such recall and shall indemnify GUILFORD for any costs
incurred by GUILFORD in connection therewith, including the refund of
the Variable Per Unit Price paid for recalled Supplied Product
("Recalled Supplied Product") or replacement of such Recalled Supplied
Product, at GUILFORD's option, unless such option is not commercially
reasonable and possible.
7.4. MSD IRELAND shall perform, or cause to be performed, such quality
control tests as indicated in the Specifications and shall make the
results of such quality control tests performed by MSD IRELAND's third
party manufacturer, in the case
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
of Bags, and by MSD IRELAND or its Affiliate, in the case of API and/or
Vials, as the case may be, available to GUILFORD on or before the date
of delivery of the Supplied Product to GUILFORD in accordance with
Article 5. Each Certificate of Analysis shall, for each lot delivered,
specify the quality tests conducted, the Specifications and the test
results, and any deviations from the Specifications, and shall include
the lot number, the quantity delivered and the expiry date.
7.5. Other than MSD IRELAND Image Product delivered to GUILFORD in accordance
with the terms of this Supply Agreement and the Transition Agreement
(which shall be released by MSD IRELAND), the release of Supplied
Product will be the responsibility of GUILFORD. MSD IRELAND (or its
Affiliates or third party designees, as the case may be) shall perform
all necessary stability tests relating to Finished Product.
7.6. MSD IRELAND shall, upon GUILFORD's written request, make a copy of the
Annual Product Review (to the extent relevant to Supplied Product) with
respect to Supplied Product supplied under this Supply Agreement
available to GUILFORD for its review. MSD IRELAND will provide
information reasonably requested by GUILFORD that is necessary for the
preparation by GUILFORD of any of its regulatory filings.
7.7. If MSD IRELAND discovers that any lot of Supplied Product previously
delivered to GUILFORD by MSD IRELAND under this Supply Agreement fails
to meet the Specifications, MSD IRELAND shall promptly notify GUILFORD
of such failure and the nature thereof in detail. MSD IRELAND shall
promptly investigate all such failures and provide the findings of such
investigation to GUILFORD. MSD IRELAND shall consult with GUILFORD in an
effort to arrive at an acceptable procedure for taking appropriate
action in response to such failure.
7.8. Change Requests
(a) Change to Specifications. In the event of a proposed change by
either party in the Specifications during the Term, the proposing party
shall promptly notify the other party of the proposed change, and shall
provide the other party with documentation in support of such proposed
change and within a period of ten (10) business days from receipt of
such notice, the parties shall initiate review and comment on such
proposed change. MSD IRELAND and GUILFORD shall cooperate in good faith
to design a plan to resolve any Supplied Product supply issues that may
result from changes in the Specifications, and while MSD
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
IRELAND is Manufacturing the Supplied Product hereunder, no change will
be made without the written mutual agreement of both parties, such
agreement not to be unreasonably withheld, except as required by
Applicable Laws. Beginning on the Effective Date, GUILFORD shall obtain
all necessary and appropriate regulatory approvals prior to making any
agreed upon change or any change required by Applicable Law or
regulatory action. MSD IRELAND shall provide GUILFORD with necessary
revisions to the Specifications (as well as supporting data) as so
changed prior to shipment of any Supplied Product Manufactured using
such revised Specifications. Subject to the foregoing, if MSD IRELAND
makes a change to the Manufacturing process or Specifications and both
parties agree the change can be filed in the Annual Report, MSD IRELAND
shall provide the data to GUILFORD prior to submission of the Annual
Report. All costs associated with any such change shall be borne as
agreed by the parties.
(b) Required Manufacturing Changes. Each party shall give the other
party reasonable notice prior to any changes to the process of
Manufacturing Supplied Product for sale in the Territory that are
required by cGMPs or Applicable Laws (collectively, "Required
Manufacturing Changes"). The party required by cGMPs or Applicable Laws
to make Required Manufacturing Changes shall carry out such Required
Manufacturing Changes and the other party shall, where required, assist
in carrying out such changes.
(c) Discretionary Manufacturing Changes. MSD IRELAND may, upon
reasonable notice to GUILFORD, make changes to the process of
Manufacturing of Supplied Product other than Required Manufacturing
Changes (collectively, "Discretionary Manufacturing Changes"); provided,
that any such change does not materially adversely affect GUILFORD's
ability to sell Supplied Product in substantially the same manner as
sold prior to such change. GUILFORD may also request Discretionary
Manufacturing Changes but such changes must be approved by MSD IRELAND
prior to the implementation of such changes.
(d) Costs of Manufacturing Changes. All costs associated with Required
Manufacturing Changes (including, without limitation, write off and
other costs due to such changes associated with obsolete raw materials,
work-in-process and finished product inventories, all printed materials,
including without limitation, packaging and labeling materials) shall be
borne by GUILFORD (unless such costs would otherwise be included in
Variable Per Unit Price as
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
contemplated by Schedule 11.6). MSD IRELAND shall use commercially
reasonable efforts to mitigate losses and/or avoid write-offs as a
result of any Required Manufacturing Changes. All costs associated with
Discretionary Manufacturing Changes shall be paid by the party that
requested such Discretionary Manufacturing Changes.
(e) Changes from Manufacturing Facility to Another. MSD IRELAND may
change its Manufacturing facilities for the Supplied Product hereunder
after giving GUILFORD reasonable written prior notice of such change,
provided that no change of Manufacturing facility shall relieve MSD
IRELAND of any of its obligations under this Supply Agreement. MSD
IRELAND shall provide to GUILFORD all supporting data in order to permit
GUILFORD to amend its regulatory filing to reflect this change and shall
otherwise cooperate in good faith with GUILFORD to comply with all
regulatory obligations arising out of such change. All costs associated
with MSD IRELAND's change of its Manufacturing facilities for the
Supplied Product shall be borne by MSD IRELAND other than any regulatory
costs which shall be borne by GUILFORD.
7.9 All Manufacturing records shall be retained by MSD IRELAND or its
Affiliate or third party manufacturers for a period of not less than two
(2) years after the date of expiry of each batch of Supplied Product to
which said records pertain.
7.10 MSD IRELAND shall permit one or more qualified technical specialists
from GUILFORD or its Affiliate, upon reasonable prior notice and during
normal business hours, to conduct annual audits (including, but not
limited to, quality, safety and environmental audits) of MSD IRELAND's
or its Affiliate's facility that Manufactures the API or Merck's West
Point, Pennsylvania facility that packages certain of the Finished
Product or any other facility to which MSD IRELAND transfers such
Manufacture pursuant to the terms and conditions of Section 7.8.
GUILFORD shall also be permitted to accompany Merck on Merck's annual
audits of Merck's third party manufacturers. Observations and
conclusions of GUILFORD's audits will be issued to MSD IRELAND. MSD
IRELAND shall provide a written response within fifteen (15) days of
receipt of such observations and conclusions. The parties will discuss
such response and promptly agree on corrective action to be implemented
as well as the appropriate apportionment of costs associated therewith.
GUILFORD shall have the right to review all relevant documentation.
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
7.11 Promptly following the Effective Date, the parties shall work together
to negotiate and finalize in an expeditious manner a quality agreement
(the "Quality Agreement"), but in no event later than thirty (30) days
after the Effective Date. The parties expressly agree that such Quality
Agreement will supplement this Article 7 and that should there be any
inconsistency between such Quality Agreement and this Supply Agreement,
the terms of the Supply Agreement shall govern.
8. REGULATORY INTERACTIONS
8.1. GUILFORD shall be responsible for maintaining the NDAs and all
regulatory filings and submissions associated with the Supplied Products
in the Territory. MSD IRELAND shall provide any Manufacturing-related
information to GUILFORD as may be reasonably necessary for GUILFORD to
meet its regulatory obligations to maintain the NDAs and file the
required reports thereunder in the Territory, including, providing such
information relating to any changes contemplated in Section 7.8 in
accordance with the terms set forth therein. Each party shall cooperate
with the other in making and maintaining all regulatory filings that may
be necessary in connection with the performance of this Supply Agreement
until the first annual anniversary date to occur after MSD IRELAND (or
its Affiliate or third party manufacturer) ceases to supply a given
Supplied Product to GUILFORD hereunder.
8.2. GUILFORD shall have the responsibility for communications with the FDA
within the Territory relating to the Supplied Product. MSD IRELAND shall
provide GUILFORD, in a timely manner, all information reasonably in its
(or its Affiliate's) control concerning the Supplied Product within or
outside the Territory reasonably necessary to meet GUILFORD's regulatory
obligations in the Territory and GUILFORD shall provide MSD IRELAND or
its Affiliate, in a timely manner, all information reasonably in its
control concerning the Supplied Product inside or outside the Territory
necessary to meet MSD IRELAND's or its Affiliate's regulatory
obligations outside the Territory.
8.3. Each party shall advise the other immediately (but in no event greater
than twenty-four (24) hours) of FDA visits relating specifically to the
Supplied Product or, if applicable, no later than five (5) business days
after such party's receipt of notice of any such FDA visits to MSD
IRELAND's facilities or the facilities of any of MSD IRELAND's
Affiliates or its or their third party manufacturers relating
specifically to the Supplied Product, or any written or oral inquiries
by such
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
regulatory agency, concerning the Finished Product or the API including,
without limitation, safety and efficacy claims, subject to any
confidentiality obligation with respect to MSD IRELAND's or its
Affiliate's third party manufacturers. GUILFORD and MSD IRELAND shall
consult with one another in an effort to arrive at a mutually acceptable
response. Each party shall promptly furnish to the other party any
report or correspondence issued by or provided to any regulatory agency
in connection with such visit, purged only of trade secrets of such
party that are unrelated to the other party's activities under this
Supply Agreement and any information that is unrelated to the Finished
Product or the API, as the case may be, subject to any confidentiality
obligation with respect to MSD IRELAND's or its Affiliate's third party
manufacturers.
8.4. Except for MSD IRELAND Image Product delivered to GUILFORD in accordance
with the terms of this Supply Agreement and the Transition Agreement,
GUILFORD shall use its or GUILFORD's own NDC numbers on any packaging of
Finished Product sold in the Territory.
9. ADVERSE REACTION REPORTING; RETURNED GOODS
9.1. During the Term of this Supply Agreement and for three (3) years
thereafter, each of GUILFORD and MSD IRELAND shall be responsible for
reporting adverse experiences and reactions with respect to Supplied
Product in conformance with all Applicable Laws, rules and regulations.
Each of GUILFORD and MSD IRELAND shall send to the other, throughout
such period, copies of all such adverse experience or reaction reports,
with all Serious or Unexpected (as each term is hereinafter defined)
adverse experiences (and relevant government reporting forms) sent to
the other party within five (5) calendar days of such party's receipt,
and all adverse experiences or reactions other than Serious or
Unexpected adverse experiences (and relevant government reporting forms)
sent to the other party within thirty (30) calendar days after such
party's receipt. Not later than thirty (30) days after the Effective
Date, MSD IRELAND (or its designee) and GUILFORD (or its designee) will
meet and develop mutually acceptable pharmacovigilance procedures to
allow both parties to comply with applicable regulations and orders of
regulatory authorities. As used in this Section 9.1, "Serious" shall
mean, with respect to any experience or reaction, one which is fatal or
life threatening, results in persistent or significant disability,
requires inpatient hospitalization or prolongation of existing inpatient
hospitalization, is a congenital anomaly, cancer, or the result of an
overdose, or
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
is another important medical event (even if not life-threatening,
resulting in death, or requiring hospitalization) if, based upon
appropriate medical judgments, such medical event may jeopardize the
patient's or subject's health or may require medical or surgical
intervention to prevent one of the other outcomes listed previously; and
"Unexpected" shall mean, with respect to any condition or development,
one which is not listed in the then-current FDA-approved labeling for
the Supplied Products, and includes those experiences or reactions that
show a significant increase in incidence or severity over what appears
on the labeling for the Supplied Products, or in NDA trials, or that
reflect or suggest a failure of the Supplied Products to achieve claimed
activity.
9.2. In the event that MSD IRELAND or its Affiliate receives any returned
goods of Supplied Product from a third party, then MSD IRELAND shall
notify GUILFORD of such returned goods and destroy such returned goods
at GUILFORD's expense. GUILFORD shall not have the right to return any
Supplied Product to MSD IRELAND, other than in accordance with Article
6. Notwithstanding the foregoing, in the event that any such returned
goods of Supplied Product relate to a lot which was partially sold by
MSD IRELAND or its Affiliate prior to the Effective Date and partially
sold by GUILFORD after the Effective Date or sold by MSD IRELAND (and
its Affiliates) in its entirety prior to the Effective Date, then the
provisions of the Asset Agreement relating to returned product shall
apply.
10. *
10.1. *
10.2. *
10.3. *
10.4. *
10.5. *
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
11. TERM AND TERMINATION
11.1. This Supply Agreement shall be effective as of the Effective Date and,
unless earlier terminated as provided in this Article 11, Article 2 or
Article 31, shall continue in effect with respect to (x) Vials, until
December 31, 2004, (y) Bags, until August 18, 2007 and (z) API, until
December 31, 2014 (the Effective Date until such date of termination,
the "Term").
11.2. This Supply Agreement may be terminated by written notice given by
either party as follows:
(a) If the other party shall be in breach of any material obligation
hereunder, and has not cured such breach within ninety (90) days after
receipt of a notice from the non-breaching party requesting the
correction of such breach. Such termination shall be effective upon
failure of the breaching party to cure such breach within the specified
time period; or
(b) Upon the filing or institution of any bankruptcy, reorganization,
liquidation or receivership proceedings by the other party, or upon the
failure by the other party for more than ninety (90) days to discharge
any such actions against it. Such termination shall be effective upon
receipt of the notice.
*
11.3. GUILFORD shall provide written notice to MSD IRELAND of any Change of
Control (a) if practicable, not less than 30 days prior to such Change
of Control, or (b) if prior notice is not practicable, within 5 business
days after such Change of Control.
(a) Failure of Supply Condition. In the event that (i) after a
Change of Control, Merck's third party manufacturer fails or refuses to
timely supply Bags or Vials, as the case may be (a "Failure of Supply
Condition") and (ii) such Change of Control has occurred prior to the
date on which GUILFORD has entered into a direct third party
Manufacturing arrangement with any such third party
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
manufacturer then MSD IRELAND shall have the right to terminate this
Supply Agreement as to the applicable Finished Product (Bags or Vials,
as the case may be); provided, that, Merck has not amended or permitted
the amendment of any provision in the applicable third party agreement
in any manner which would reasonably be expected to materially adversely
affect Merck's rights under such third party agreements in the event of
a Change of Control or GUILFORD's rights under this Supply Agreement in
respect thereof. In the event that (x) Merck believes, in its reasonable
judgment and after consultation with GUILFORD, that such third party
manufacturer has breached its obligations under the applicable agreement
with Merck and (y) GUILFORD has requested that Merck enforce its rights
under the applicable agreement, then Merck shall attempt to enforce such
rights, at the expense of GUILFORD; provided, however, that Merck's
obligation set forth in this sentence shall terminate on April 28, 2005.
In such event as specified in the previous sentence, if Merck, in its
reasonable judgment believes that the formulation and/or packaging of
API by GUILFORD, the Resulting Entity or their respective Affiliates,
either directly or indirectly through a third party, will not or does
not cause Merck to be in default or breach of the applicable agreement
with Merck's third party manufacturer, then GUILFORD shall be free to
formulate and package the API in the form previously formulated and/or
packaged by such third party manufacturer.
*
(c) For purposes of this Section 11.3,
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
(i) "Change of Control" shall mean, with respect to GUILFORD or any
Resulting Entity, as the case may be, (i) an event whereby any
Group becomes a Controlling Group, (ii) the sale, lease or other
transfer of all or substantially all of GUILFORD's and/or any
Resulting Entity's assets to any third party (other than as a
result of GUILFORD's financing sources exercising rights after
default in connection with the collateral provided by GUILFORD in
connection with its financing arrangements for this transaction),
or (iii) the sale, lease, license or other transfer of the NDA,
the Trademark, or the Assigned Patents (each, if sold, leased,
licensed or otherwise transferred, a "Transferred Acquired
Asset") or the Supply Agreement to any third party (other than to
an Affiliate of GUILFORD to the extent permitted under Section
17.1 or as a result of GUILFORD's financing sources exercising
rights after default in connection with the collateral provided
by GUILFORD in connection with its financing arrangements for
this transaction).
(ii) "Change of Control Condition" shall mean a Failure to Supply
Condition or a Competing Product Condition.
(iii) "Group" means any shareholder, or any group of shareholders that
are Affiliates of each other. For purposes of this definition,
individuals (and entities in which they have a controlling or
beneficial interest) shall be deemed Affiliates if they are
related by blood, marriage or adoption.
(iv) "Controlling Group" means any Group that beneficially acquires or
obtains control of, directly or indirectly, forty percent (40%)
or more of the issued and outstanding shares of capital stock or
other equity interests of GUILFORD or other Resulting Entity
(other than as a result of GUILFORD's financing sources
exercising rights after default in connection with the collateral
provided by GUILFORD in connection with its financing
arrangements for this transaction).
(v) "Qualified" means (i) having a net worth at least equivalent to
that of GUILFORD immediately following the Effective Date and
(ii) if applicable, having a debt rating at least equivalent to
that of GUILFORD immediately following the Effective Date. For
purposes of this definition, "net worth" shall mean total assets
minus total liabilities as shown in the most recent audited
financial statement which has been prepared in accordance with
generally accepted accounting principles consistently applied,
and the "net
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
worth" of a Group consisting of two or more entities shall be the
consolidated net worth of such entities.
(vi) "Qualified Successor" means (i) a Qualified Controlling Group, or
(ii) a Qualified Resulting Entity; provided, however, that in
every instance in which there is a Controlling Group, such
Controlling Group must be Qualified and in every instance in
which there is a Resulting Entity other than GUILFORD, such
Resulting Entity must be Qualified.
(vii) "Competing Product" means a IIb/IIIa inhibitor which is marketed
or sold for Covered Indications anywhere in the world.
(d) *
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
(e) Notwithstanding any provision hereof, MSD IRELAND shall have the
right to terminate this Supply Agreement at any time effective
immediately in the event of a Change of Control if the Resulting Entity
or any member of the Controlling Group is an individual or entity
identified as a proscribed party on the Entity List or the Denied
Persons List administered by the Bureau of Industry and Security, U.S.
Department of Commerce or the Specially Designated Nationals and Blocked
Persons List administered by the Office of Foreign Assets Control, U.S.
Department of Treasury.
11.4. *
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
11.5. The Supply Agreement shall automatically terminate effective eighteen
(18) months after *. All Firm Orders for delivery during any period
following such date of termination shall be cancelled without any
penalty to either party.
11.6. *
11.7. Subject to GUILFORD's obligations set forth in Section 11.6, GUILFORD
may terminate this Supply Agreement upon ninety (90) days prior written
notice to MSD IRELAND with respect to any Supplied Product that is
permanently and completely withdrawn from the market in the Territory
for serious adverse health or safety reasons.
11.8. The termination of this Supply Agreement shall not affect the rights and
obligations of the parties arising prior to such termination.
Termination under this Article 11 shall relieve and release all parties
from any liabilities and obligations under this Supply Agreement other
than those specifically set forth in this Article 11, those that survive
termination in accordance with Article 24 and any and all obligations to
indemnify the other party in accordance with Article 10.
12. FORCE MAJEURE
12.1. The parties shall not be liable for the failure or delay in performing
any obligation under this Supply Agreement (except for the payment of
money) if and to the
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
extent such failure or delay is due to (a) acts of God; (b) weather,
fire or explosion; (c) war, terrorism, invasion, riot or other civil
unrest; (d) governmental laws, orders, restrictions, actions, embargoes
or blockades; (e) national or regional emergency; (f) injunctions,
strikes, lockouts, labor trouble or other industrial disturbances; (g)
shortage of adequate fuel, power, materials, or (h) any other event
which is beyond the reasonable control of the affected party (each such
event, a "Force Majeure"); provided that the party affected shall
promptly notify the other of the Force Majeure condition and shall exert
all commercially reasonable efforts at its cost (except for any such
costs of MSD IRELAND which would be allocated to the per unit Variable
Per Unit Price of Supplied Product in accordance with the methodology
set forth in Schedule 11.6) to eliminate, cure or overcome any such
causes and to resume performance of its obligations as soon as possible.
In the event that any such Force Majeure occurs, then Sections 2.4 and
11.4 shall apply, as the context requires.
13. GOVERNING LAW; ARBITRATION
13.1. This Supply Agreement shall be governed by, interpreted and construed,
and all claims and disputes, whether in tort, contract, or otherwise be
resolved in accordance with the substantive laws of the State of New
Jersey, without reference to any rules of conflict or laws of renvoi.
13.2. In the event of any controversy or claim arising out of or relating to
this Supply Agreement, performance hereunder, termination hereof, or any
relationship created hereby, or related in any way to the Supplied
Product, each party irrevocably submits to the exclusive jurisdiction of
the courts of the State of New Jersey and the Federal courts of the
United States District Court for the District of New Jersey for the
purposes of any suit, action or other proceeding arising out of this
Supply Agreement or transactions contemplated hereby. Each party
irrevocably and unconditionally waives any objection to the laying of
venue in the state and Federal courts of New Jersey as stated above and
that any such action was brought in an inconvenient forum.
Notwithstanding the foregoing:
(a) In the event of a threatened disclosure in violation of this Supply
Agreement, either party shall have the right (notwithstanding subsection
13.2(b) below) to seek injunctive relief from any competent court in the
jurisdiction where the disclosure is threatened to prevent such
disclosure pending resolution of the merits of the dispute; and
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
(b) Subject to subsection 13.2(a) above, any controversy, claim or
dispute between the parties hereto (except for those disputes as to
which an alternative method of resolution is specified under Section 4.6
and Section 6.2) arising out of or relating to the performance,
construction, interpretation or enforcement of this Supply Agreement
shall be submitted to binding confidential arbitration pursuant to the
Federal Arbitration Act, 9 X.X.X.xx. 1 et seq. in accordance with the
Rules of Commercial Arbitration of the American Arbitration Association
or its successor. Any arbitration pursuant to this Supply Agreement
shall be conducted in New Jersey by three neutral arbitrators selected
by the American Arbitration Association. The judgment upon the award
rendered in any such arbitration shall be final and binding upon the
parties and may be entered in any court having jurisdiction thereof. All
fees and expenses of the arbitrators and all other expenses of the
arbitration, except for attorneys' fees, shall be shared equally by the
parties. Each party shall bear its own attorneys fees.
14. CONSENT AND WAIVER REGARDING SERVICES OF PROCESS, PERSONAL JURISDICTION
AND JURY TRIAL
14.1. In any action, suit, arbitration or proceeding to enforce the rights of
either party under this Supply Agreement or otherwise arising out of
this Supply Agreement or from any acts, omissions or activities of
either party arising from or related in any way to this Supply Agreement
or the transactions contemplated hereby or related in any way to the
Supplied Product, each party, by execution and delivery of this Supply
Agreement, expressly and irrevocably consents to the service of any
complaint, summons, notice or other process relating to any such action,
suit, arbitration or proceeding by delivery thereof to it by hand or by
any other manner provided for in Section 22.1 hereof. Each party hereby
expressly and irrevocably waives any claim or defense in any such
action, suit, arbitration or proceeding based on any alleged lack of
personal jurisdiction, improper venue, forum non conveniens or any
similar doctrine or theory.
14.2. In any action, suit, arbitration or proceeding to enforce the rights of
either party under this Supply Agreement or otherwise arising out of
this Supply Agreement or from any acts, omissions or activities of
either party arising from or related in any way to this Supply Agreement
or the transactions contemplated hereby or related in any way to the
Supplied Product, the parties hereto, by execution and delivery of this
Supply Agreement, expressly and irrevocably waive their right to a
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
jury trial and stipulate that any such action, suit or proceeding shall
be tried by the court (or arbitrator if the proceeding is under Section
13.2(b) hereof).
15. INDEPENDENT CONTRACTOR
15.1. The parties hereto are independent contractors. Nothing in this Supply
Agreement is intended or shall be deemed to constitute a partnership,
agency, franchise or joint venture relationship between the parties.
Neither party shall enter into any agreements or make any commitments
for the other.
16. CONFIDENTIALITY; PUBLIC ANNOUNCEMENTS
16.1. The provisions relating to Confidentiality and Public Announcements
contained in the Asset Agreement in Article 10 are hereby incorporated
by reference as if set forth herein in full. Any reference therein to
Merck shall automatically be amended to include MSD IRELAND.
31 EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
17. ASSIGNMENT
17.1 This Supply Agreement and the rights and obligations of the parties
hereunder shall not be assignable or delegable, in whole or in part,
except that (i) MSD IRELAND shall have the right to assign this Supply
Agreement or delegate its rights and obligations in whole or in part to
any Affiliate of MSD IRELAND, and with respect to the Manufacture of the
Supplied Product only, to a third party; provided, however, that MSD
IRELAND shall remain primarily responsible for its obligations hereunder
and (ii) GUILFORD shall have the right to assign this Supply Agreement
or delegate its rights and obligations in whole or in part to any
Affiliate of GUILFORD; provided, however, that such Affiliate remains
subject to the provisions set forth in Section 11.3 and GUILFORD shall
remain primarily responsible for its obligations hereunder. GUILFORD
shall have the right to grant a security interest in or collaterally
assign this Supply Agreement to the extent required in connection with
its financing arrangements relating to the transactions contemplated by
the Asset Agreement or the Transaction Documents (as defined in the
Asset Agreement), such grant or assignment to include the right of the
grantee or assignee to foreclose upon such security interest or
collateral upon default by GUILFORD and, in such event, to sell, assign,
license or otherwise dispose of such security interest or collateral to
a third party provided, however, that any such sale, assignment, license
or other disposal shall be subject to the provisions of Section 11.3 to
the extent applicable. Any attempted assignment of this Supply Agreement
in violation of this Section 17.1 shall be void. Notwithstanding the
foregoing, the prohibition on assignment set forth in this Section 17.1
shall not apply to any assignment that constitutes a Change of Control
which shall be governed by the provisions of Section 11.3.
18. ENTIRE AGREEMENT
18.1. This Supply Agreement, including without limitation the Schedules and
Exhibits attached hereto, together with the Asset Agreement and the
other Transaction
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
Documents (as defined in the Asset Agreement) constitute the entire
agreement between the parties hereto with respect to the subject matter
hereof and except as expressly otherwise provided herein, supersedes and
cancels all previous agreements, negotiations, commitments and writings
in respect to the subject matter hereof, except for any prior
confidentiality agreements which shall survive. In the event of any
conflict between this Supply Agreement and any such prior
confidentiality agreement, the agreement imposing stricter
confidentiality shall survive.
18.2. Notwithstanding Section 18.1 or any other provision of this Supply
Agreement or the Asset Agreement to the contrary, the Asset Agreement
and this Supply Agreement shall each stand as independent agreements
between the parties, and after the Effective Date, each of this Supply
Agreement and the Asset Agreement will remain in full force and effect
and this Supply Agreement shall not be deemed superseded or amended
thereby. Without limitation of the foregoing, the provisions of the
Asset Agreement and this Supply Agreement with respect to * shall both
remain independently effective and no such contracts shall be deemed to
supersede or limit *, except as may be specifically specified therein.
19. SUCCESSORS AND ASSIGNS
19.1. The terms and conditions of this Supply Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
20. HEADINGS
20.1. The headings of the Articles, Sections and subsections of this Supply
Agreement are inserted for convenience only and shall not be deemed to
constitute a part of this Supply Agreement or affect the construction
hereof.
21. MODIFICATION AND WAIVER
21.1. No amendment, modification or alteration of the terms of this Supply
Agreement shall be binding unless the same shall be in writing and duly
executed by the
33 EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
parties hereto, except that any of the terms or provisions of this
Supply Agreement may be waived in writing at any time by the party which
is entitled to the benefits of such waived terms or provisions. No
waiver of any of the provisions of this Supply Agreement shall be deemed
to or shall constitute a waiver of any other provision hereof (whether
or not similar). No delay on the part of any party exercising any right,
power or privilege hereunder shall operate as a waiver thereof.
22. NOTICES
22.1. Any notices or demands required by this Supply Agreement shall be given
in writing and shall be given by delivery in person, by electronic
facsimile transmission, cable, telegram, telex or other standard forms
of written telecommunications, by overnight courier or by registered or
certified mail, postage prepaid,
if to MSD IRELAND, to:
Merck Sharp & Dohme (Ireland) Limited
Ballydine, Kilsheelan
Clonmel, Co. Tipperary
Ireland
Attention: Plant Manager
Facsimile: 011-353-51-601241
with a copy to:
Merck & Co., Inc.
Xxx Xxxxx Xxxxx
X.X. Xxx 000
Xxxxxxxxxx Xxxxxxx, XX 00000-0000
Attention: Vice President, Procurement
Facsimile: (000) 000-0000
and with a copy to:
Merck & Co., Inc.
Xxx Xxxxx Xxxxx
X.X. Xxx 000
00 EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
Xxxxxxxxxx Xxxxxxx, XX 00000-0000
Attention: Office of the Secretary
Facsimile: (000) 000-0000
if to GUILFORD, to:
Guilford Pharmaceuticals Inc.
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to:
Guilford Pharmaceuticals Inc.
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
or at such other address for a party as shall be specified by like
notice. The date of giving any such notice shall be the date of hand
delivery, the date sent by electronic facsimile transmission, cable,
telegram, telex or other standard forms of written communications, the
day after delivery to the overnight courier service, and the date three
days following the posting of the registered or certified mail.
23. COUNTERPARTS
23.1. This Supply Agreement may be executed in one or more counterparts, each
of which shall for all purposes be deemed an original and all of which
shall constitute one and the same Supply Agreement.
24. SURVIVAL OF CERTAIN PROVISIONS
24.1. The terms, provisions, representations, and warranties contained in this
Supply Agreement that by their sense and context are intended to survive
the performance thereof (including, without limitation, Articles 4, 6,
9, 10, 11, 13, 14,
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
16, 18, 19, 24, 25, 27 and 31) by either party or both parties hereunder
shall so survive the completion of performance, expiration or
termination of this Supply Agreement.
25. SEVERABILITY
25.1. If any provision of this Supply Agreement is found invalid or
unenforceable by a court of competent jurisdiction, the remainder of
this Supply Agreement shall continue in full force and effect. The
parties shall negotiate in good faith to substitute a valid, legal, and
enforceable provision that reflects the intent of such invalid or
unenforceable provision.
26. REVIEW BY LEGAL COUNSEL
26.1. Each of the parties agrees that it has read and had the opportunity to
review this Supply Agreement with its legal counsel. Accordingly, the
rule of construction that any ambiguity contained in this Supply
Agreement shall be construed against the drafting party shall not apply.
27. THIRD PARTY BENEFICIARIES
27.1. Nothing in this Supply Agreement, express or implied, is intended to
confer upon any third party, any rights, remedies, obligations or
liabilities.
28. ASSET AGREEMENT
28.1. The parties expressly acknowledge and agree that certain provisions of
the Asset Agreement are incorporated by reference herein, or by their
terms otherwise apply hereto (including, without limitation, Section
13.4 of the Asset Agreement) and further agree that such provisions
shall be given full effect in interpreting and enforcing this Supply
Agreement.
29. CUMULATIVE REMEDIES
29.1. Unless specified to the contrary in this Supply Agreement, no remedy
referred to in this Supply Agreement is intended to be exclusive, but
each shall be
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
cumulative and in addition to any other remedy referred to in this
Supply Agreement or otherwise available under law or at equity.
30. FURTHER ASSURANCES
30.1. Each party agrees to execute such further papers, agreements, documents,
instruments and the like as may be necessary or desirable to effect the
purpose of this Supply Agreement and to carry out its provisions.
31. ALTERNATIVE SUPPLIER
31.1. After the Effective Date, GUILFORD shall have the right to negotiate
directly with MSD IRELAND's or its Affiliate's current third party
manufacturers of Finished Product in order that GUILFORD may directly
contract with such third party manufacturers prior to December 31, 2004,
with respect to Vials, and prior to August 17, 2007, with respect to
Bags. GUILFORD's obligations with respect to the purchase of Vials
and/or Bags, as the case may be, from MSD IRELAND and MSD IRELAND's
obligations with respect to the supply of Vials and/or Bags, as the case
may be, shall terminate upon thirty (30) days' notice by GUILFORD to MSD
IRELAND that a direct contract between GUILFORD and the applicable third
party manufacturer has been executed; provided, that (1) such agreement
specifically relieves and releases Merck (to Merck's reasonable
satisfaction) from any obligation under Merck's existing agreement with
such third party manufacturer with respect to Vials or Bags, as the case
may be, for sale in the Territory, and (2) GUILFORD's agreement with
such third party manufacturer does not materially adversely affect MSD
IRELAND or its Affiliates or its or their business or interests with
respect to such third party manufacturer; provided that Merck shall
waive any provisions of exclusivity, noncompetition or the like in such
third party agreement that would limit GUILFORD's ability to directly
contract with such third party manufacturers, and agree to the amendment
of Merck's agreements with such third party manufacturers to reflect the
direct supply of Supplied Product from such third party manufacturers to
GUILFORD in the Territory. In the event GUILFORD shall execute a direct
contract with a third party manufacturer as contemplated in the
foregoing sentence, GUILFORD shall be obligated to purchase from MSD
IRELAND any MSD IRELAND inventory of Materials, work-in-progress or
Finished Product to the extent such Materials,
37 EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
work-in-progress or Finished Product were procured or created in
response to Firm Orders submitted by GUILFORD to MSD IRELAND.
31.2. *
31.3. Unless specifically contemplated by this Supply Agreement, MSD IRELAND
shall have no obligation to support any operations of GUILFORD,
including, any additional technology transfer, technology license,
disclosure of any additional confidential information or any other type
of technical or manufacturing assistance.
32. INSURANCE
32.1. Simultaneously with the execution of this Supply Agreement, (i) MSD
IRELAND hereby delivers to GUILFORD a certificate of insurance
reasonably acceptable to GUILFORD's insurers to permit GUILFORD to
obtain the insurance coverage contemplated by the Asset Agreement and
(ii) GUILFORD hereby delivers to MSD IRELAND a certificate of insurance
reasonably acceptable to MSD IRELAND naming Merck and its subsidiaries
as additional insured/loss payee for the amounts and coverage listed in
Section 13.4 of the Asset Agreement as well as naming Merck and its
subsidiaries as additional insured/loss payee for all
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
claims relating to business interruption, sole supplier property
coverage and failure of supply.
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*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
IN WITNESS WHEREOF, the undersigned have executed this Supply Agreement
as of the Effective Date.
MERCK SHARP & DOHME GUILFORD PHARMACEUTICALS
(IRELAND) LLC INC.
By: /s/ XXX XXXX By: /s/ XXXXX X. XXXXX, M.D.
------------------------------- --------------------------------
Name: Xxx Xxxx Name: Xxxxx X. Xxxxx, M.D.
Title: Vice President Title: Chairman, President and
Chief Executive Officer
GUARANTEE
Merck & Co., Inc. ("Merck") hereby irrevocably and unconditionally
guarantees the performance by MSD IRELAND of the contractual obligations set
forth in this Supply Agreement. Merck shall be responsible for all liability,
direct or indirect, due or to become due, now existing or hereafter arising,
resulting from the performance or non-performance of these contractual
obligations. GUILFORD shall have no obligation to first seek performance of any
of the contractual obligations by MSD IRELAND before seeking enforcement of this
guarantee by Merck.
Furthermore, with respect to Sections 2.2(d), 2.3(c), 11.2, 11.3, 11.4 and
all definitions from Article 1 referenced therein, Merck agrees to be bound to
such provisions as if a party hereto.
AGREED TO AND ACCEPTED BY:
MERCK & CO., INC.
By: /s/ XXX XXXX
----------------------
Name: Xxx Xxxx
Title: Vice President, Supply Chain Management
40 EXECUTION COPY
*The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
#The Company has omitted certain schedules in accordance with Regulation S-K
601(b)(2). The Company will furnish the omitted schedules to the Commission
upon request.
