SUPPLY AGREEMENT
Exhibit 10.01
THIS SUPPLY AGREEMENT (the “Agreement”) is made as of January 1, 2006 (the “Effective Date”),
by and between Xxxx Xxxxxxx & Company, a corporation organized under the laws of Delaware with
offices located at 0000 Xxxx Xxxxx Xxxxxxxxxx, Xxxxxxxxxx, Xxxxxxx 00000 (“PURCHASER”), and Martek
Biosciences Corporation, a Delaware corporation with offices located at 0000 Xxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000 (“SELLER”).
WITNESSETH THAT:
WHEREAS, PURCHASER and SELLER entered into a License Agreement dated as of October 28, 1992
and amended by letter agreement dated January 21, 2004 *, which License Agreement is amended by
this Agreement solely to the extent expressly provided herein (as so amended, the “License
Agreement”) wherein SELLER has granted to PURCHASER in the Territory (as defined therein) certain
rights under Licensed Patents (as defined therein) and Technology (as defined therein) (A) to
produce the Xxxx Xxxxxxx Product (as defined therein), (B) to use and make the Martek Product (as
defined therein) for purposes of making and having made the Xxxx Xxxxxxx Product and (C) to use,
market and distribute directly or indirectly the Xxxx Xxxxxxx Product, in each case as further
specified in the License Agreement; and
WHEREAS, PURCHASER wishes to purchase the Martek Product from SELLER; and
WHEREAS, SELLER is willing to supply Martek Product for use by PURCHASER to manufacture, use,
market and distribute the Xxxx Xxxxxxx Product in accordance with the terms of the License
Agreement; and
WHEREAS, such purchase and supply of Martek Product shall be subject to the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and of the mutual undertakings
herein contained, the parties agree as follows:
ARTICLE 1. DEFINITIONS
Unless defined herein, all capitalized terms will have the meaning stated in the License
Agreement, as amended hereby. References herein to SELLER and PURCHASER shall also be deemed as
references to Licensor and Licensee, respectively, for purposes of the License Agreement.
1.1 “ARA” shall mean arachidonic acid.
1.2 “Annual Forecast” shall have the meaning specified in Section 2.2.1.
1.3 “DHA” shall mean docosahexaenoic acid.
| * | 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. | |
1.4 “LCPUFA” shall mean any fatty acid, other than linoleic acid, gammalinolenic acid and
alphalinolenic acid, which contains at least eighteen (18) carbon atoms and at least two (2) double
bonds.
1.5 “Martek Product Specifications” shall mean the specifications for the Martek Product to be
supplied hereunder, as set forth in Exhibit C attached hereto, as such Exhibit may be modified by
written agreement of the parties.
1.6 “Unit of the Martek Product” shall mean that quantity of Martek Product containing one (1)
kilogram of DHA and/or ARA.
1.7 “Infant Formula Product” shall mean an enteral product formulated for the nutritional
support of premature infants and/or a breast milk substitute formulated industrially in accordance
with applicable Codex Alimentarius and United States Food and Drug Administration standards to
satisfy the total normal nutritional requirements of infants up to between four and six months of
age and adapted to their physiological characteristics and fed in addition to other foods to
infants up to approximately one year of age.
ARTICLE 2. PURCHASE AND SUPPLY OF COMPOUNDS
2.1 Purchase. (a) During the Term of this Agreement and subject to the terms of this
Agreement, PURCHASER shall purchase and/or shall direct the Designee(s) (as defined in Exhibit B
hereto) to purchase, from SELLER, PURCHASER’s total requirements of DHA and ARA as required by
PURCHASER for use in Infant Formula Products in accordance with the terms of the License Agreement
as amended hereby. All quantities of the Martek Product purchased by PURCHASER or any Designee
under this Agreement shall be used solely for purposes of production, distribution and/or sale of
the Xxxx Xxxxxxx Product.
(b) As partial consideration for the rights granted to PURCHASER hereunder, including without
limitation the pricing provisions and price protection provided in Exhibit A attached hereto,
PURCHASER agrees that during the Term of this Agreement Section 2.2 (i) of the License Agreement
shall be of no force or effect, and after the Term of this Agreement, Section 2.2(i) of the License
Agreement shall only apply with respect to actions which occur after the Term of this Agreement.
Notwithstanding the above, to the extent PURCHASER elects to add new countries to the Territory
after the Effective Date of this Agreement, the incremental additional License Fee cost to
PURCHASER shall be *, after the Effective Date of this Agreement, to *, provided that SELLER has
established specific License Fees for those particular countries.
2.2 Forecasts and Orders.
2.2.1 On the Effective Date of this Agreement, PURCHASER shall give SELLER written notice of
the quantity of Martek Product which PURCHASER estimates in good faith that it will order or direct
the Designee(s) to order from SELLER during the remainder of the current calendar year (the
“Initial Annual Forecast”). Not later than November 30 of each calendar year during the Term of
this Agreement, PURCHASER shall give SELLER written notice of the quantity of Martek
Product which PURCHASER estimates in good faith that it will order or direct the Designee(s) to
| * | 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. | |
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order from SELLER during the next subsequent calendar year (each, an “Annual Forecast”). The
Annual Forecast shall be used to establish the per unit and per kilogram pricing for the Martek
Products purchased during the relevant calendar year in accordance with Section 2.3.1 and Exhibit A
attached hereto; provided that, for the remainder of calendar year 2006, the per kilogram pricing
to be used, subject to the year-end adjustment pursuant to Section 2.3.1, shall be * per kilogram,
notwithstanding the Initial Annual Forecast. In addition to the foregoing, one (1) month before
the commencement of each calendar quarter during the Term of this Agreement, PURCHASER shall
provide SELLER with a forecast (a “Rolling Forecast”) of PURCHASER’s requirements for the Martek
Product for each of the succeeding four (4) quarters, specifying quantities and requested delivery
dates. These forecasts will be PURCHASER’s good-faith, best estimate of requirements and should
not be considered a firm commitment.
2.2.2 PURCHASER expressly acknowledges that available supplies of the Martek Product have been
in the past, and, may from time to time in the future, be insufficient to meet current demand.
Nevertheless, SELLER shall use commercially reasonable efforts to have available for shipment to
PURCHASER or to a Designee for PURCHASER’s account such quantities of the Martek Product as
PURCHASER forecasts in good faith pursuant to Section 2.2.1 above and any additional quantities
which PURCHASER may reasonably request. In case for any reason SELLER cannot or does not supply
such quantities of the Martek Products as are forecasted in good faith by PURCHASER pursuant to
Section 2.2.1 to PURCHASER, PURCHASER shall be allowed to use an alternative supplier for
quantities of Omega-3 and Omega-6 long-chain polyunsaturated fatty acids equal to those quantities
of Martek Products that were ordered by PURCHASER pursuant to a Purchase Order and not delivered by
SELLER.
2.2.3 PURCHASER shall issue and/or shall direct the Designee(s) to issue formal purchase
orders (“Purchase Orders”) at least sixty (60) but no more than ninety (90) days in advance of the
date on which PURCHASER or the Designee requests that SELLER ship the Martek Product. SELLER shall
accept or reject any such Purchase Order within five (5) business days of receipt, provided that
SELLER shall not reject any Purchase Order for any quantities within the most recent forecast.
2.2.4 Purchase Orders which have been accepted by SELLER shall be considered as firm and
binding orders (subject to the provisions of Section 2.2.2 above) and shall only be canceled or
amended by mutual written agreement of the parties.
2.3 Payment Terms.
2.3.1 Price. During the Term of this Agreement, PURCHASER and the Designee(s) shall
pay for the Martek Product in any order submitted by PURCHASER or a Designee in accordance with the
terms set forth in Exhibit A attached hereto. PURCHASER hereby covenants and agrees to abide by
the conditions set forth on Exhibit A, as amended by mutual agreement from time to time, which
shall be applicable to the Martek Product delivered to PURCHASER or a Designee pursuant to the
relevant Purchase Order, and PURCHASER shall acknowledge in writing to SELLER, within thirty (30)
days after each calendar year-end, that PURCHASER has complied with this covenant during the
preceding twelve (12) month period. Price calculations based on annual ordering volumes
shall be made using the Annual Forecasts submitted to SELLER by PURCHASER in accordance with
Section 2.2.1 and as further demonstrated in Exhibit A-1 attached hereto. At the end of each
| * | 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. | |
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calendar year, if the quantity actually purchased (as reflected in Purchase Orders accepted by
SELLER that satisfy the requirements of Section 2.2 3 above and which are scheduled for shipment
within the corresponding calendar year) is less than the quantity specified in the Annual Forecast
for the relevant calendar year, SELLER shall invoice PURCHASER within thirty (30) days after the
end of the calendar year for an amount equal to the difference, if any, between the total price
paid, and the total purchase price payable for the quantity of Martek Product actually purchased
from SELLER in such calendar year as specified in Exhibit A. Alternatively, if the quantity
actually purchased during a calendar year exceeds the quantity specified in the Annual Forecast for
purchase in such calendar year, SELLER shall credit against future purchases of Martek Product by
PURCHASER from SELLER an amount equal to the difference, if any, between the total purchase price
payable for the quantity actually purchased as specified in Exhibit A and the total price paid by
PURCHASER, provided that if this AGREEMENT has terminated, SELLER shall, in lieu of any such
credit, pay such amount to PURCHASER. Notwithstanding the foregoing, for calendar year 2006, the
year-end reconciliation described above shall be calculated as of December 1, 2006 based on actual
shipments in 2006 prior to such date, plus shipments which are, as of December 1st,
2006, scheduled to occur in December 2006, and any resulting credit shall be applied to invoices
issued in December 2006, and if any balance is remaining, payment shall be issued prior to December
31st, 2006.
2.3.2 Taxes. The purchase price for the Martek Product is exclusive of any and all
national, state or local sales, use, value added or other taxes, customs duties and similar tariffs
and fees which SELLER or its Affiliates may be required to pay or collect upon the delivery of the
Martek Product, or otherwise. Should any tax or levy be made, PURCHASER agrees to pay such tax or
levy and indemnify SELLER for any claim for such tax or levy demanded.
2.3.3 Terms and Guarantee. PURCHASER and the Designee(s), as applicable, shall pay
all correct invoices for amounts due in accordance with Section 2.3.1 above in the United States in
U.S. dollars within * days from the postmark date or date of electronic transmission, or
transmission by facsimile, as applicable, of SELLER’s invoice, which invoice shall not be deemed to
be delivered earlier than the date of delivery of the invoiced Martek Product. For any invoices
containing invoicing errors, payment shall not be due with respect to the incorrect portions of the
invoice only until the invoicing errors are corrected and a new invoice, with respect to the
incorrect portions on the original invoice, is received by PURCHASER. In order to induce SELLER to
fill orders for the Martek Product placed by the Designees, PURCHASER hereby assumes responsibility
for, and unconditionally guarantees, the timely payment of amounts due from the Designees (the
“Guaranteed Obligations”) within * days after receipt from SELLER of notice of nonpayment of any
such amount. SELLER shall not be required, prior to any such notice to PURCHASER, to pursue or
exhaust any of its rights or remedies against a defaulting Designee with respect to performance of
any Guaranteed Obligation.
2.3.4 Sample Analysis. SELLER shall have the right to analyze samples of the Xxxx
Xxxxxxx Product at any time and from time to time for purposes of verifying that PURCHASER has
complied with any conditions that may be applicable to the PURCHASER pursuant to the terms of this
Agreement, including its exhibits and appendices, for any order of Martek Product.
The expenses of such analyses shall be borne by SELLER; provided, however, that PURCHASER
shall provide reasonable samples to SELLER without charge upon SELLER’s request, to be made no more
often than quarterly, and provided, further, that PURCHASER shall be charged for, and
| * | 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. | |
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shall
promptly pay the expense of any such analysis that discloses a failure to comply with any
applicable condition.
2.4 Order and Delivery Terms.
2.4.1 Martek Product shall be delivered F.O.B. SELLER’s place of shipment to PURCHASER or
Designee, as specified in the applicable Purchase Order.
2.4.2 Title to and risk of loss of Martek Product shall be transferred to PURCHASER upon
delivery by SELLER to a carrier for shipment to PURCHASER or the indicated Designee.
2.4.3 In connection with ordering and delivering the Martek Product hereunder, PURCHASER’s
standard forms shall govern each order; however, nothing in such forms shall be construed to bind
SELLER in any way that modifies or contradicts any express term of this Supply Agreement or its
exhibits and appendices.
ARTICLE 3. REPRESENTATIONS, WARRANTY AND DISCLAIMER.
3.1 SELLER warrants that the Martek Product will be manufactured in compliance with (1)
current good manufacturing practices promulgated by the U.S. Food and Drug Administration, (2) in
accordance with the requirements of Article 5.2 herein and (3) in accordance with the Martek
Product Specifications. Except as otherwise provided in Section 8.2, the exclusive liability of
SELLER, and PURCHASER’s exclusive remedy, for failure of any Martek Product to conform to the
Martek Product Specifications shall be the replacement of the nonconforming Martek Product or a
refund of the purchase price paid by PURCHASER for the nonconforming Martek Product (including
duty, freight, insurance charges, and other similar related expenses) at the SELLER’s sole option.
3.2 SELLER’s Representations and Warranties. SELLER represents and warrants to the
PURCHASER as follows:
(i) Exhibit D attached hereto sets forth a complete and accurate list of the Licensed
Patents as of the date of this Agreement.
(ii) SELLER has all necessary corporate power and authority to enter into this Agreement
and perform its obligations hereunder.
(iii) SELLER’s performance under this Agreement does not conflict with any other contract to
which SELLER is bound.
3.3 SELLER’s Disclaimers.
3.3.1 EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER HEREBY DISCLAIMS ANY AND ALL
WARRANTIES, EXPRESS AND IMPLIED, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT, RELATING TO
| * | 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. | |
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THE TECHNOLOGY, THE MARTEK
PRODUCTS OR THE MARTEK TRADEMARKS. SELLER MAKES NO REPRESENTATIONS OR WARRANTIES AND HAS NO DUTY
TO ENSURE THAT THE TECHNOLOGY OR THE MARTEK PRODUCTS ARE USABLE WITH THE XXXX XXXXXXX PRODUCT OR
THAT THE MARTEK PRODUCTS ARE SAFE OR CAN BE INCORPORATED SAFELY INTO THE XXXX XXXXXXX PRODUCT. IT
IS HEREBY ACKNOWLEDGED AND AGREED THAT IT SHALL BE PURCHASER’S RIGHT AND OBLIGATION TO DETERMINE
THE SAFETY AND UTILITY OF THE MARTEK PRODUCTS AS THEY RELATE TO EACH XXXX XXXXXXX PRODUCT.
3.3.2 SELLER HEREBY DISCLAIMS ANY WARRANTY THAT SELLER’S RIGHTS IN THE TECHNOLOGY OR USE OF
THE MARTEK PRODUCT ARE FREE FROM INFRINGEMENT BY THIRD PARTIES. SELLER FURTHER DISCLAIMS ANY
WARRANTY RELATING TO THE PATENTABILITY OF, OR THE VALIDITY OF ANY PATENTS RELATING TO, THE
TECHNOLOGY, OR THE MARTEK PRODUCT AND MAKES NO REPRESENTATIONS WHATSOEVER WITH REGARD TO THE SCOPE
OF ANY LICENSED PATENTS OR THAT ANY LICENSED PATENTS MAY BE COMMERCIALLY EXPLOITED WITHOUT
INFRINGING OTHER PATENTS.
3.3.3 EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, SELLER HEREBY DISCLAIMS AND SHALL NOT
BE LIABLE FOR ANY DAMAGES OF ANY NATURE RESULTING OR ARISING FROM OR RELATING TO (A) THE USE,
MANUFACTURE, DISTRIBUTION, MARKETING, OR SALE BY PURCHASER, ITS AFFILIATES OR ANY THIRD PARTY OF
THE TECHNOLOGY, THE MARTEK PRODUCT, OR THE XXXX XXXXXXX PRODUCTS, OR (B) ANY IMPROVEMENTS OR
MODIFICATIONS TO THE TECHNOLOGY, THE MARTEK PRODUCT, OR THE XXXX XXXXXXX PRODUCTS WHICH ARE NOT
MADE BY AND PROPRIETARY TO SELLER, [
3.3.4 PURCHASER’s Warranties. PURCHASER represents and warrants to the SELLER as
follows:
| (i) | The execution and delivery of this Agreement and the performance by PURCHASER of the transactions contemplated hereby have been duly authorized by all necessary corporate actions. |
| (ii) | The performance by PURCHASER of any of the terms and conditions of this Agreement will not constitute a breach or violation of any other agreement or understanding, written or oral, to which it or its Affiliates is a party. |
ARTICLE 4. TERM, TERMINATION
4.1 Term: This Agreement shall commence on the Effective Date and, subject to prior
termination of this Agreement in accordance with the terms hereof, shall terminate on the tenth
(10th) anniversary of the Effective Date (the “Term”).
4.2 Termination:
| * | 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. | |
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4.2.1 Termination in Case of Material Breach; Opportunity to Cure. Either party to
this Agreement may terminate this Agreement upon sixty (60) days prior written notice if the other
party shall commit a material breach of this Agreement and shall not cure such breach within such
sixty (60) day period.
4.2.2 Termination in Case of Infringement. PURCHASER shall have the right to
terminate this Agreement in a particular jurisdiction within the Territory if the parties receive a
written opinion of a mutually agreeable outside patent counsel, or a court or other tribunal of
competent jurisdiction determines by final order, that the Technology or any material portion
thereof or the Martek Product infringe upon the patent or other proprietary rights of any Third
Party in such jurisdiction; provided, however, that if, prior to any such termination, SELLER
develops a non-infringing alternative that is fully compliant with all applicable laws and
regulations and meets PURCHASER’S specifications and requirements as a substitute for the Martek
Product, or obtains a license from such Third Party, such that PURCHASER could lawfully use the
Technology and/or the Martek Product (as the case may be) in connection with the Xxxx Xxxxxxx
Products at no additional cost or expense to PURCHASER beyond that expressly provided in this
Agreement, PURCHASER shall not terminate this Agreement.
4.2.2.1 Volumes in Case of Infringement Termination. In the event that PURCHASER
terminates this Agreement as to a particular jurisdiction within the Territory based on Section
4.2.2, SELLER agrees to annually credit the * of PURCHASER for the particular jurisdiction to *
used in determining PURCHASER’s * Schedule A for future purchases of Martek Product.
4.2.3 Termination in Case of Insolvency; Government Action. Notwithstanding any other
provisions of this Agreement, either party to this Agreement may terminate this Agreement upon
giving notice to the other, should the other commit an act of bankruptcy, declare bankruptcy, be
declared bankrupt, enter into an arrangement for benefit of creditors, enter into a procedure of
winding up or dissolution, or should a trustee or receiver be appointed for the other or upon the
expropriation, takeover or nationalization of the other party or a majority portion of its assets
by governmental action.
4.2.4 Other Termination Rights. In addition to the termination rights set forth
above, either party may terminate this Agreement upon twelve (12) months prior written notice
provided that such notice shall not be given until after the fifth (5th) anniversary of
the Effective Date of this Agreement.
4.2.5 Termination of License Agreement. This Agreement shall automatically terminate
in the event of the termination of the License Agreement.
4.3 Effect of Termination. Upon termination of this Agreement in its entirety other
than pursuant to Section 4.2.5 or on account of PURCHASER’s breach of this Agreement, PURCHASER and
its Affiliates and Designees may continue to manufacture, produce, use, market, offer for sale,
sell, promote and distribute, to the extent lawful, any Xxxx Xxxxxxx Products containing Martek
Product purchased hereunder until its inventory of such Xxxx Xxxxxxx Products is exhausted. Upon
termination of this Agreement pursuant to Section 4.2.4 or on account of PURCHASER’s breach of this
Agreement,
| * | 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. | |
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SELLER shall have the right, but not the obligation, to purchase from PURCHASER, its
Affiliates and Designees, at the cost paid for such Martek Product, PURCHASER’s unused inventories
of the Martek Product.
4.4 Effect on License Agreement. Upon termination of this Agreement, notwithstanding
any other provision hereof, the amendments to Sections 2.2(i) (subject to the last phrase of the
first sentence of Section 2.1(b) hereof), 4.1(ii), 4.1(iii), 6.1, 6.2, and 6.3 of the License
Agreement as set forth herein shall be of no further force or effect.
4.5 No Royalties. As of the date of this Agreement, the parties declare that no
royalties are due from PURCHASER to SELLER under the License Agreement for actions which have
occurred prior to the Effective Date or which occur during the Term of this Agreement
Furthermore, to SELLER’s knowledge without inquiry, PURCHASER is current on all payments due to
SELLER whether for license fees or product delivered.
| * | 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. | |
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ARTICLE 5. COVENANTS
5.1 During the Term of this Agreement, Sections 6.1, 6.2 and 6.3 of the License Agreement
shall be deemed deleted in their entirety and replaced with Sections 5.2, 5.3 and 5.4 below.
5.2 Compliance with Law; Regulatory Approval. Each of SELLER and PURCHASER (each for
itself and on behalf of its Affiliates and Designees) covenants and agrees that it shall conduct
all of its operations dealing with the Technology, the Martek Product and the Xxxx Xxxxxxx Product,
in material compliance with all applicable laws, regulations and other requirements which may be in
effect from time to time, of all national governmental authorities, and of all states,
municipalities and other political subdivisions and agencies thereof, including, without limiting
the generality of the foregoing, the Federal Food, Drug, and Cosmetic Act, the Infant Formula Act
of 1980, the regulations and other requirements of the United States Food and Drug Administration,
similar state laws and regulations or similar laws and other requirements in the Territory,
including any and all amendments, as may be applicable in any jurisdiction in the
Territory in which any Martek Product, or Xxxx Xxxxxxx Product, as applicable, is sold. It shall
be PURCHASER’s, and not SELLER’s, responsibility to secure any regulatory approvals in the
Territory that may be necessary in connection with exercise by PURCHASER of the rights granted
under this Agreement, and in connection therewith, PURCHASER shall not intentionally impair
SELLER’s ability to obtain any regulatory approval of the Martek Product by the competent
governmental authorities in any Territory and for any product that SELLER may elect to pursue.
5.3 Performance and Product Quality. PURCHASER covenants and agrees that it and its
Affiliates, and to the extent applicable, its Designees, shall exercise a reasonable standard of
care and quality control in the testing, manufacturing, marketing, packaging, distribution and sale
of each Xxxx Xxxxxxx Product. PURCHASER further covenants and agrees that it and its Affiliates
shall maintain quality control, provide adequate tests of materials, provide quality workmanship,
and do such other things as are reasonably required to assure high quality production of such Xxxx
Xxxxxxx Products.
5.4 PURCHASER’s Records. PURCHASER covenants and agrees that, PURCHASER will keep
true and accurate records adequate to permit SELLER to monitor PURCHASER’s compliance with the
terms and conditions of this Agreement and the License Agreement, and to allow any applicable
payments due to SELLER hereunder or under the License Agreement to be computed and verified. Such
records shall be made available upon prior written request by SELLER, during business hours, for
inspection by an independent accountant who is not the auditor of record for SELLER and who is
reasonably acceptable to PURCHASER and who shall be bound by a confidentiality agreement with
PURCHASER, to the extent necessary for the determination of the accuracy of the payments made
hereunder, and such records shall be retained for a period of three years following the year to
which they relate. For the purposes of this Section 5.4, any of the four largest accounting firms
in the United States (as of the date of the audit) shall be deemed acceptable to PURCHASER,
provided that the firm selected by SELLER is not SELLER’s auditor of record. The accountant shall
provide SELLER with a report containing his/her conclusions, but not the inspected records, nor the
information contained therein, and shall concurrently provide PURCHASER with such report.
PURCHASER shall promptly remit to SELLER the amount of any underpayment
| * | 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. | |
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discovered by an inspection
conducted in accordance herewith, and SELLER shall promptly remit to PURCHASER the amount of any
overpayment so discovered to the extent that such overpayment exceeds the cost of the inspection.
Each such inspection shall cover no more than the three (3) calendar years prior to the date of the
request for inspection, and SELLER shall be entitled to no more than one (1) such inspection per
calendar year, provided that, if an inspection reveals an underpayment by PURCHASER of five percent
(5%) or greater, then the accountant shall also be permitted to inspect such records covering a two
(2) calendar year period preceding the three (3) year period of such inspection. SELLER shall bear
the full cost of such inspection unless the audit discloses an underpayment by PURCHASER of five
percent (5%) or greater of any applicable royalties due hereunder, in which case PURCHASER shall
bear the full cost of the inspection. The provisions of this Section 5.4 shall survive any
termination or expiration of this Agreement for the limited purpose of permitting SELLER to verify
PURCHASER’s payment of the correct prices for the quantities of the Martek Product purchased under
this Agreement.
5.4.1 Notwithstanding Section 5.1, PURCHASER retains its rights under the License Agreement to
audit the records of SELLER (Licensor under the License Agreement), as described in the last
sentence of Section 6.3 of the License Agreement, for all periods during which Section 2.2(i) of
the License Agreement was in effect.
5.5 Product Use. In order to ensure the quality and efficacy of the Xxxx Xxxxxxx
Product, PURCHASER covenants and agrees that for a period of * from the Effective Date of this
Agreement, PURCHASER shall include in any Xxxx Xxxxxxx Product for sale in the United States (i) *
of total fatty acids as DHA and * of total fatty acids as ARA and (ii) of total fatty acids as ARA
and DHA.
5.5.1 The parties’ reaffirm that (a) outside the United States and (b) in the United States
after the above * period has expired, Section 6.6 of the License Agreement applies, which reads as
follows: Licensee covenants and agrees that it and its Affiliates shall, throughout the term of
this Agreement, use reasonable efforts to use and develop the Technology and the Martek Product
with respect to the Xxxx Xxxxxxx Product in a way which is consistent with the parties’ objective
of developing a final marketed product which has a polyunsaturated fatty acid composition
effectively *.
ARTICLE 6. [Reserved]
ARTICLE 7. LIMITATION OF LIABILITY
| * | 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. | |
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7.1 Indirect Damages. UNLESS CAUSED BY THE INTENTIONAL MISCONDUCT OF A PARTY, IN NO
EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INDIRECT, SPECIAL, INCIDENTAL,
CONSEQUENTIAL OR EXEMPLARY DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, INCLUDING
BUT NOT LIMITED TO, LOSS OF PROFITS OR BUSINESS OPPORTUNITY, WHETHER BASED ON BREACH OF CONTRACT,
TORT (INCLUDING NEGLIGENCE) OR ANY OTHER THEORY UPON WHICH ONE PARTY MAY SEEK REMEDIES AGAINST THE
OTHER.
7.2 Maximum Aggregate Liability. UNLESS ARISING FROM THE INTENTIONAL MISCONDUCT OR
GROSS NEGLIGENCE OF A PARTY OR IN THE CASE OF PRODUCTS LIABILITY, NEITHER PARTY’S TOTAL LIABILITY
TO THE OTHER PARTY ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT IN ANY CALENDAR YEAR DURING
THE TERM OF THIS AGREEMENT, WHETHER BASED ON BREACH OF CONTRACT OR TORT (INCLUDING NEGLIGENCE),
SHALL EXCEED THE TOTAL AMOUNT ACTUALLY PAID TO SELLER BY PURCHASER IN ACCORDANCE WITH THIS
AGREEMENT DURING SUCH CALENDAR YEAR. NOTWITHSTANDING THE ABOVE, SELLER’S TOTAL LIABILITY TO
PURCHASER ARISING OUT OF INTENTIONAL MISCONDUCT, GROSS NEGLIGENCE OR PRODUCTS LIABILITY SHALL NOT
EXCEED THE ACTUAL PROCEEDS RECEIVED FROM INSURANCE COVERAGE MAINTAINED IN ACCORDANCE WITH SECTION
10.4, IT BEING UNDERSTOOD AND AGREED THAT SELLER SHALL USE COMMERCIALLY
REASONABLE EFFORTS TO RECOVER THE FULL AMOUNT OF ANY CLAIM OR LIABILITY UNDER SUCH COVERAGE. AS
PURCHASER IS SELF INSURED, PURCHASER’S TOTAL LIABILITY TO SELLER ARISING OUT OF INTENTIONAL
MISCONDUCT, GROSS NEGLIGENCE OR PRODUCTS LIABILITY SHALL NOT EXCEED THE AMOUNT OF INSURANCE CARRIED
BY SELLER, WHICH SHALL IN NO EVENT BE LESS THAN THAT REQUIRED PURSUANT TO SECTION 10.4.
ARTICLE 8. INDEMNIFICATION
8.1 Indemnity by PURCHASER. Except with respect to Losses (as defined below) for
which SELLER has agreed to indemnify PURCHASER pursuant to Section 8.2 below, and as limited by
Sections 7.1 and 7.2 above, PURCHASER shall indemnify, defend and hold harmless SELLER, SELLER’s
Affiliates and SELLER’s Affiliates’ directors, officers, employees and agents from and against all
costs, expenses, damages, losses and liabilities (“Losses”) asserted against SELLER, SELLER’s
Affiliates and SELLER’s Affiliates’ directors, officers, employees and agents for which any of them
may become liable or incur or be compelled to pay with respect to or involving the Martek Product
supplied pursuant to this Agreement and/or the Xxxx Xxxxxxx Product, except to the extent that any
such Losses result from (i) a defect caused by SELLER or any SELLER Affiliate in the Martek
Products ordered by PURCHASER or any PURCHASER Affiliate or Designee from SELLER hereunder
(excluding the determination of the safety and utility of the Martek Product relating to its use in
a PURCHASER Product); (ii) the failure of SELLER or any SELLER Affiliate to manufacture the Martek
Products ordered by PURCHASER or any PURCHASER Affiliate or Designee from SELLER in accordance with
the Martek Product
| * | 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 -
Specifications; (iii) any gross negligence or intentional wrongdoing of SELLER
or any SELLER Affiliate; or (iv) the material breach by SELLER of a material term or condition of
this Agreement.
8.2 Indemnity by SELLER. Notwithstanding Section 3.1 herein and except as limited by
Sections 7.1 and 7.2 above, SELLER shall indemnify, defend and hold harmless PURCHASER, PURCHASER’s
Affiliates, and PURCHASER’s Affiliates’ directors, officers, employees and agents from and against
all Losses asserted against PURCHASER, PURCHASER’s Affiliates or the directors, officers,
employees or agents of either of them for which any of them may become liable or incur or be
compelled to pay to the extent resulting from: (i) a defect caused by SELLER or any SELLER
Affiliate in the Martek Products ordered by PURCHASER or any PURCHASER Affiliate or Designee from
SELLER hereunder (excluding the determination of the safety and utility of the Martek Product
relating to its use in a Xxxx Xxxxxxx Product); (ii) the failure of SELLER or any SELLER Affiliate
to manufacture the Martek Products ordered by PURCHASER or any PURCHASER Affiliate or Designee from
SELLER in accordance with the Martek Product Specifications; (iii) any gross negligence or
intentional wrongdoing of SELLER or any SELLER Affiliate; or (iv) the material breach by SELLER of
a material term or condition of this Agreement, except to the extent that any such Losses result
from a material breach of any of the PURCHASER’s covenants, representations and warranties or other
material terms and conditions contained herein.
8.3 Condition to Indemnification. If either party expects to seek indemnification
under this Article 8, it shall promptly give notice to the indemnifying party of the basis for such
claim of
indemnification, and the indemnifying party shall have sole authority to defend and/or settle such
claim or suit. If indemnification is sought as a result of any third party claim or suit, such
notice to the indemnifying party shall be given within fifteen (15) days after receipt by the other
party of such claim or suit; provided, however, that the failure to give notice within such time
period shall not relieve the indemnifying party of its obligation to indemnify unless it shall be
materially prejudiced by the failure. Each party shall fully cooperate with the other party in the
defense of all such claims or suits at the expense of the indemnifying party. No offer of
settlement, settlement or compromise shall be binding on a party hereto without its prior written
consent (which consent shall not be unreasonably withheld) unless such settlement fully releases
such party without any liability, loss, cost or obligation to such party.
8.4 Survival of Indemnity Obligation. The indemnification obligations provided in
this Agreement, including that provided in this Article 8 and in Section 5.3 above, shall survive
the expiration or termination of this Agreement, whether occasioned by the Agreement’s expiration
pursuant to Section 4.1 above or earlier termination pursuant to the other Sections of Article 4
above.
ARTICLE 9. CONFIDENTIALITY
9.1 Disclosure of Information. All the Technology and all other information exchanged
by the parties pursuant to and in execution of their obligations and in exercise of their rights
under this Agreement, including, without limitation, the terms of this Agreement and the Martek
Product Specifications, shall be deemed confidential. SELLER and PURCHASER acknowledge and agree
that the value of the Technology, the Martek Product, and the Xxxx
| * | 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. | |
- 12 -
Xxxxxxx Products is based, to a
large extent, on maintaining the confidentiality of the Technology, the Martek Product, and the
Xxxx Xxxxxxx Products and preventing any unauthorized dissemination to or use by Third Parties of
information relating to the Technology, the Martek Product, or the Xxxx Xxxxxxx Products.
Confidential and proprietary information hereunder, whether orally or in written form, shall be
safeguarded by the recipient and shall not be disclosed to Third Parties and shall be made
available only to the receiving party’s employees or other agents who have a need to know such
information for purposes of performing the party’s obligations, or for purposes of exercising the
party’s rights, under this Agreement and such employees or other agents shall have a legal
obligation to the employer or principal, as applicable, not to disclose such information to Third
Parties. Each party shall treat, and PURCHASER shall ensure that its Affiliates and Designees
treat, any and all such confidential information in the same manner and with the same protection as
such party maintains its own confidential information. These mutual obligations of confidentiality
shall not apply to any information to the extent that such information: (i) is or later becomes
generally available to the public, such as by publication or otherwise, through no fault of the
receiving party; (ii) is obtained from a Third Party having the legal right to make such a
disclosure without obligations of confidentiality; or (iii) is independently developed by a party
without access to the confidential information. SELLER, PURCHASER or PURCHASER’s Affiliates shall
not remove from any communications or other documents delivered by a disclosing party any
proprietary notices affixed thereto by the disclosing party.
Notwithstanding the foregoing, SELLER and PURCHASER may disclose (including but not limited to
disclosure in response to questions) or announce to any Third Person, or issue a press release
concerning (a) the fact and the nature of this Agreement and the transactions to be performed
pursuant hereto; or (b) any otherwise confidential or proprietary information as and to
the extent required by applicable law or government agency of the United States and the
countries of the Territory, including, but not limited to, any applicable disclosure requirements
under the federal securities laws or regulations thereunder, provided that in the case of each such
disclosure, announcement or press release, the disclosing party gives no less than five (5)
business days prior written notice to the other party and gives the other party such assistance as
the other party may reasonably request, in accordance with applicable law, in order to prevent,
challenge, modify or protect such disclosure; provided, however, that SELLER and PURCHASER may
disclose the fact and the terms of this Agreement to its attorneys and accountants without notice
to the other party. Furthermore, PURCHASER may deliver a copy of this Agreement (including drafts
thereof) to any Affiliate or any Designee so long as any such recipient has undertaken, in writing,
an obligation to maintain the terms of this Agreement in confidence.
9.2 Post-Termination Obligations. The mutual confidentiality obligations of the
parties under the provisions of this Article 9 shall survive the expiration or termination of this
Agreement for a period of fifteen (15) years from the date thereof. Upon expiration or termination
of this Agreement, each party shall promptly return to the other all confidential or proprietary
property or documentation disclosed or delivered to such party pursuant to this Agreement and then
in existence, subject to the retention by such party of one (1) copy thereof for archival purposes
only.
ARTICLE 10. GENERAL PROVISIONS
| * | 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. |
- 13 -
10.1 Dispute Resolution. SELLER and PURCHASER covenant and agree to use their
diligent efforts to resolve any disputes that arise between them in the future and are related to
this Agreement through negotiation and mutual agreement and, if good faith efforts to so negotiate
and mutually agree are unavailing, through binding arbitration under the procedures set forth
herein. When either party determines that there is a dispute subject to arbitration under this
Agreement, it shall promptly send written notice of the dispute to the other party. The parties
agree that for a period of thirty (30) days from the sending of such written notice, they shall in
good faith negotiate to resolve the dispute. Subject to the foregoing, disputes arising in
connection with this Agreement shall be finally settled under the Rules of the American Arbitration
Association by three arbitrators appointed in accordance with such Rules. Unless the parties to
such dispute agree otherwise in writing, any such arbitration shall be conducted in Baltimore,
Maryland and the results of such Arbitration shall be final and binding on the parties and
enforceable in any court of competent jurisdiction. Notwithstanding the foregoing, the parties
acknowledge and agree that each of them shall have the right to seek immediate injunctive and other
equitable relief through the courts in the event of any material breach of this Agreement by the
other party that would cause the non-breaching party irreparable injury for which there would be no
adequate remedy at law.
10.2 Information Exchange. During the Term of this Agreement, the parties shall
promptly notify each other of any report of an adverse event associated with the use of Martek
Product in any Xxxx Xxxxxxx Product. PURCHASER shall have sole discretion in determining what
action, if any, is to be taken by PURCHASER in connection with any such adverse event reported by
PURCHASER relating to a Xxxx Xxxxxxx Product.
10.3 Force Majeure. Neither party to this Agreement shall be liable for damages due
to delay or failure to perform any obligation under this Agreement, other than an obligation to
make payments, if such delay or failure results directly or indirectly from circumstances beyond
the reasonable control of such party. Such circumstances shall include, but shall not be limited
to, acts of God, acts of war, acts of terrorism, civil commotions, riots, strikes, lockouts, acts
of the government in either its sovereign or contractual capacity, perturbation in
telecommunications transmissions, inability to obtain suitable equipment or components or raw
materials, accident, fire, water damages, flood, earthquake, or other natural catastrophes. If
remittance of U.S. Dollars is prevented or impaired for reasons of force majeure, the party owing
the money shall settle such obligations in the manner as may be reasonably instructed by the party
to whom the obligation is owed. Should the effect of force majeure continue for more than six (6)
consecutive months, the adversely affected party may terminate this Agreement without liability
(other than for claims arising prior to the effective date of termination) on thirty (30) days
notice to the party impaired by force majeure.
10.4 Insurance. PURCHASER is self-insured (or is an additional insured under a
Designee policy) with respect to product liability insurance covering Xxxx Xxxxxxx Products.
SELLER shall procure and maintain product liability insurance coverage of not less than Ten Million
Dollars ($10,000,000.00) covering Martek Product, with PURCHASER named as an additional insured and
loss payee. PURCHASER may request from SELLER a certificate evidencing such insurance and such
certificate shall be promptly provided. The minimum insurance coverage set forth above shall be
maintained at all times unless changed to equivalent
| * | 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. |
- 14 -
coverage by another carrier upon thirty (30)
days prior written notice to PURCHASER. Any successor to or permitted assignee of this Agreement
shall procure and maintain product liability insurance coverage of not less than Ten Million
Dollars ($10,000,000.00) covering such successor’s or assignee’s applicable products.
10.5 Notices. Notices required under this Agreement shall be in writing and sent by
registered mail, by facsimile transmission, by nationally recognized overnight courier service, or
by hand delivery, with written verification of receipt and date of receipt, to the respective
parties at the following addresses:
Notices to SELLER:
Martek Biosciences Corporation
0000 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attn: General Counsel
0000 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attn: General Counsel
Notices to PURCHASER:
Xxxx Xxxxxxx & Company
0000 Xxxx Xxxxx Xxxxxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attn: Legal Department
0000 Xxxx Xxxxx Xxxxxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attn: Legal Department
or to such other address as either party may designate by a notice given in compliance with this
paragraph, and shall be deemed effective when received.
10.6 Entire Agreement. The terms and provisions contained in this Agreement and its
Exhibits constitute the entire agreement between the parties on the subject matter hereof and shall
supersede all previous communications, representations, agreements or understandings, either oral
or written, between the parties hereto with respect to the subject matter hereof. In the event of
any inconsistency between the terms of this Agreement and the License Agreement relating to the
purchase and supply of Martek Product or the liability for the use of any Martek Product supplied
hereunder, the provisions of this Agreement shall supersede and shall be controlling. In the event
of an inconsistency between the terms of this Agreement and the License Agreement relating to
matters other than the purchase and supply of Martek Product or the liability for the use of any
Martek Product supplied hereunder, the provisions of the License Agreement shall be controlling.
No agreement or understanding varying or extending this Agreement will be binding upon either party
hereto, unless in a writing which specifically refers to this Agreement, and signed by duly
authorized officers or representatives of the respective parties. The provisions of this Agreement
not specifically amended by any such further amendment shall remain in full force and effect. The
provisions of this Agreement, including without limitation the provisions of Exhibit A and Exhibit
B attached hereto, expressly amend Article I and Sections 2.2, 2.3, 4.1(ii), 4.1(iii), 4.4, 6.1,
6.2, 6.3 and 11.1 of the License Agreement, and, except to the extent expressly provided in Section
4.4 herein, such
| * | 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. |
- 15 -
amendments shall survive any termination of this Agreement, and the parties hereby
ratify the terms of the License Agreement as amended by this Agreement including without limitation
by the provisions of Exhibit A and Exhibit B attached hereto.
10.7 Assignment. This Agreement and the rights granted hereunder shall not be
assignable, in whole or in part, by PURCHASER without the prior written consent of SELLER
(which consent shall not be unreasonably withheld or delayed); provided, however, that this
prohibition against assignment shall not apply to and notice shall only be required for an
assignment to an Affiliate. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. No person, firm or
corporation other than the parties hereto and their successors and permitted assigns shall derive
rights or benefits under this Agreement.
10.8 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed to be a duplicate original, but which, taken together, shall be deemed to
constitute a single instrument.
10.9 Severability. If any provision of this Agreement is declared void or
unenforceable by any relevant judicial or administrative authority, such declaration shall not of
itself nullify the remaining provisions of this Agreement. Consequently, the parties shall meet to
determine the effect of any such declaration and any variations to this Agreement which are
mutually desirable.
10.10 Waiver. No waiver by either party of any breach of any of the terms or
conditions herein provided to be performed by the other party shall be construed as a waiver of any
subsequent breach, whether of the same or of any other term or condition hereof.
10.11 Headings. Section headings contained in this Agreement are inserted for
convenience of reference only, shall not be deemed to be a part of this Agreement for any purpose,
and shall not in any way define or affect the meaning, construction or scope of any of the
provisions hereof.
10.12 Survival. Sections 4.3, 4.4, 5.5, 10.1, 10.5, 10.6, 10.7, 10.9, 10.10, 10.11,
10.12, 10.13 and 10.14, and Articles 3, 7, 8 and 9 shall survive the termination or expiration of
this Agreement in perpetuity and Section 10.4 shall survive for two (2) years following the
termination or expiration of this Agreement.
10.13 Construction of Agreement. This Agreement shall be construed and the respective
rights of the parties shall be determined under and pursuant to the laws of the State of Delaware,
without regard to the principles of conflict of laws thereof. The parties expressly exclude the
applicability of the Convention on Contracts for the International Sale of Goods.
10.14 Relationship between Parties. Neither party to this Agreement shall have the
power to bind the other by any guarantee or representation that either party may give, or in any
other respect whatsoever, or to incur any debts or liabilities in the name of or on behalf of the
other party, and for purposes of this Agreement, the parties hereto hereby acknowledge and agree
that they
shall not be deemed partners, joint venturers, or to have created the relationship of agency or of
employer and employee between the parties.
| * | 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 -
IN WITNESS WHEREOF, this Supply Agreement has been executed in English in four copies, each a
duplicate original, of which two are for SELLER and two are for PURCHASER, as of the day and year
first above written.
MARTEK BIOSCIENCES CORPORATION
|
XXXX XXXXXXX & COMPANY | ||||
| By: | /s/ Xxxxxx X. Xxxxxx | By: | /s/ Xxxxx X. Xxxx | ||
Name: Xxxxxx X. Xxxxxx
|
Name: Xxxxx X. Xxxx | ||||
Title:
Sr. V.P. & Gen. Counsel
|
Title: Sr. V.P. Global Supply Chain | ||||
| * | 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 -
EXHIBIT A
PURCHASE PRICE
During the Term of this Agreement, the pricing provisions set forth in Section 1 below shall amend
the License Agreement by replacing Sections 2.2(i), 4.1(ii) and 4.1(iii) of the License Agreement
in their entirety. Following termination by either party for any reason, these Sections of the
License Agreement shall once again be in full force and effect for actions occurring after such
termination.
| 1. | Purchase Price |
PURCHASER shall pay SELLER compensation for the Martek Product (in oil form) and/or the rights
granted to PURCHASER with respect to the Martek Product in accordance with this Exhibit A.
From and after the Effective Date, provided that PURCHASER is not in material breach of any
provision of this Agreement, the Purchase Price charged to PURCHASER hereunder for the Martek
Product in any country at any time shall be * that available at such time * for purchases of the
Martek Product for use in an Infant Formula Product in substantially similar quantities and subject
to substantially similar terms and conditions without the prior written consent of PURCHASER or
unless SELLER offers * to PURCHASER.
The prices set forth in this Exhibit A may be increased annually by SELLER by up to *, and
provided that any such percentage increases shall apply to *.
In the event SELLER limits the supply of the Martek Product to PURCHASER during any calendar year
during the Term (“Allocation Program”), any * of the Martek Product supplied to PURCHASER, as
compared to * placed by PURCHASER during such year, as a result of the Allocation Program shall be
* in the * set forth in this Exhibit A for such year, * the purpose of determining the appropriate
* for such year.
Per Section 4.2.2.1 of the Agreement, in the event that PURCHASER terminates this Agreement as to a
particular jurisdiction within the Territory based on Section 4.2.2, SELLER agrees to annually
credit the * of PURCHASER for the particular jurisdiction to the * used in determining PURCHASER’s
* Schedule A for future purchases of Martek Product.
Temporary reductions in the volume of Martek Product purchased by SELLER caused by product
recalls or other similar events shall not result in * of this Agreement.
Purchase Price for annual volumes of Martek Product will be calculated as follows:
Pricing Alternative A:
Purchase Price for annual of Martek Product up to * will be calculated as follows:
| * | 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. |
- 18 -
| Annual Volume | Price per Unit of | Annual Volume | Price per Kilogram of | |||
| (Units) | Martek Product | (Kilograms) | Martek Product | |||
*
|
* | * | * | |||
*
|
* | * | * | |||
*
|
* | * | * | |||
*
|
* | * | * |
Purchase Price for * over *, which price will apply only to *, and not to *, will be
calculated as follows:
| Annual Volume | Price per Unit of | Annual Volume | Price per Kilogram of | |||
| (Units) | Martek Product | (Kilograms) | Martek Product | |||
*
|
* | * | * | |||
*
|
* | * | * | |||
*
|
* | * | * | |||
*
|
* | * | * |
Royalty: None
Additional conditions:
1. Martek Product ordered from SELLER must comprise one hundred percent (100%) of any and all
Omega-3 and Omega-6 Long-Chain Polyunsaturated Fatty Acids (“LCPUFA”) contained in any quantity of
any Xxxx Xxxxxxx Product (for purposes of this Exhibit A, the term “LCPUFA” shall mean any
fatty acid, other than linoleic acid, gammalinolenic acid and alphalinolenic acid, which contains
at least eighteen (18) carbon atoms and at least two (2) double bonds).
2. Any Xxxx Xxxxxxx Products for sale in the United States shall have an Omega-3 and Omega-6 LCPUFA
composition of: (i) * of total fatty acids as DHA and * of total fatty acids as ARA and (ii) * of
total fatty acids as ARA and DHA as set forth in Section 5. 5 and 5.5.1 of the Agreement.
Pricing Alternative B:
If, after the * of the Effective Date of this Agreement (i) any Xxxx Xxxxxxx Products for sale in
the United States shall have an Omega-3 and Omega-6 LCPUFA composition of: (i) * of total fatty
acids as DHA and * of total fatty acids as ARA and (ii) * of total fatty acids as ARA and DHA and
(ii) PURCHASER’s total annual volumes of the Martek Products actually purchased fall below *,
SELLER may, at SELLER’s sole option, for SELLER’s ARA and DHA up to the following:
| Annual Volume | Price per Unit of | Annual Volume | Price per Kilogram of | |||
| (Units) | Martek Product | (Kilograms) | Martek Product | |||
*
|
* | * | * | |||
*
|
* | * | * | |||
*
|
* | * | * |
| * | 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. |
- 19 -
EXHIBIT A-1
The example set forth below illustrates how the per kilogram pricing will be calculated as
described in Section 2.3.1:
Annual Forecast: *
Price per kg for annual volumes of * – *.: *
Price per kg for annual volumes from * to *.: *
Sub-total for the first *. (* x *): *
Sub-total for the * above * (* x *): *
Total based on an Annual Forecast of *.: *
Based on the Annual Forecast, the * to be charged per *: *
*
| * | 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. |
- 20 -
EXHIBIT B
ADDITIONAL AMENDMENTS TO LICENSE AGREEMENT
1. The License Agreement is hereby amended by adding the following at the end of Article I:
“Designee” shall mean any entity that is designated by Licensee, and is approved by
Licensor in writing, at Licensor’s discretion and subject to Licensor ‘s right to withdraw such
approval in its discretion, to order quantities of the Martek Product from Licensor pursuant to any
supply agreement then in effect between Licensee and Licensor solely for (a) * approved by Licensor
and (b) * for use in accordance with the terms of the License Agreement.
2. Section 2.3 of the License Agreement is hereby amended by adding the following to the end of the
section:
Notwithstanding the foregoing, Licensee may transfer the Martek Product, or may direct Licensor to
transfer the Martek Product, to any Designee solely for (a) * that may be approved in writing by
Licensor and (b) * for use in accordance with the terms of the License Agreement. The parties
agree that any Designee may perform said * outside of the Territory.
3. Section 4.4 of the License Agreement is hereby amended by deleting all language after the first
sentence thereof.
4. Section 11.1 of the License Agreement is hereby amended by adding the following to the end of
the section:
In addition, Licensee shall indemnify, defend and hold harmless Licensor, its Affiliates and
Licensor’s and its Affiliates’ directors, officers, employees and agents from and against all
losses as described above asserted against them by any Designee relating to this Agreement or any
Supply Agreement between the parties hereto.
| * | 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. |
- 21 -
EXHIBIT C
MARTEK PRODUCT SPECIFICATIONS
*
| * | 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. |
- 22 -
EXHIBIT D
LICENSED PATENTS
(as of 5/8/2006)
(as of 5/8/2006)
“Microbial Oil Mixtures and Uses Thereof”
| Country | Status | Application No. | Publ. or Patent No. | |||
Australia
|
Granted 7 Nov 95 | 12392/92 | 661,297 | |||
*
|
* | * | ||||
Canada
|
Granted 15 Dec 98 | 2,101,274 | 2,101,274 | |||
Europe,
(designates
Austria, Belgium,
Denmark, France,
Germany, Great
Britain, Greece,
Italy, Luxembourg,
Monaco,
Netherlands, Spain,
Sweden, and
Switzerland/
Liechtenstein)
|
Granted 18 Apr 01 Opposition Pending * |
92904388.3 * |
0 568 606 | |||
Indonesia
|
Granted 20 Jun 95 | P 001678 | ID 0000174 | |||
Israel
|
Granted 1 Apr 96 | 100733 | 100733 | |||
| Granted 14 Oct 97 | 114253 | 114253 | ||||
Mexico
|
Granted 6 Jan 97 | 9200320 | 183638 | |||
New Zealand
|
Granted 16 Feb 96 | 241359 | 241359 | |||
OPAI (French Africa)
|
Granted 29 Dec 97 | PV 60396 | 10348 | |||
PCT
|
Nationalized Published 6 Aug 92 |
PCT/US92/00522 | WO92/12711 | |||
Philippines
|
Granted 23 Nov 01 | 43812 | 1992-43812 | |||
Russia
|
Granted 27 Oct 97 | 93052410.13 | 2,093,996 | |||
Singapore
|
Granted 00 Xxx 00 | 0000000.0 | 00000 | |||
Xxxxx Xxxxxx
|
Granted 28 Oct 92 | 92/0452 | 92/0452 | |||
South Korea
|
Granted 9 Jan 02 | 1993-0702205 | 321543 | |||
| Granted 20 Mar 01 | 2000-7003480 | 292103 | ||||
| Granted 25 Oct 01 | 2001-7002283 | 313987 | ||||
Sri Lanka
|
Granted 17 Jun 94 | 10526 | 10526 | |||
United States
|
Granted 20 Dec 94 | 07/944,739 | 5,374,657 | |||
| Granted 27 Aug 96 | 08/358,474 | 5,550,156 |
| * | 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. |
- 23 -
“Arachidonic Acid and Methods for the Production and Use Thereof”
| Country | Status | Application No. | Publ. or Patent No. | |||
Australia
|
Granted 21 Nov 95 | 12355/92 | 661,674 | |||
| Granted 02 Dec 1999 | 48542/96 | 713,567 | ||||
*
|
* | * | ||||
| * | * | |||||
Canada
|
Granted 2 Apr 02 | 2,101,273 | 2,101,273 | |||
| Granted 28 May 02 | 2,209,513 | 2,209,513 | ||||
China
|
Published 11 Mar 98 | 96192002.2 | CN1175976A | |||
| Published 16 Nov 05 | 05071295. | CN1696300A | ||||
Eurasia
|
Granted 28 Aug 00 | 97-0090US | 1036 | |||
Europe,
(designates
Austria, Belgium,
Denmark, France,
Greece, Germany,
Great Britain,
Ireland, Italy,
Luxembourg, Monaco,
Netherlands,
Portugal, Spain,
Sweden, and
Switzerland/
Liechtenstein)
|
Granted 6 Sep 00 Granted 2 May 03 Opposition Pending Granted 5 Oct 05 (Div of EP 0 568 608) Published 10 Sep 03 (Div of EP 0 800 584) |
92904428.7 96904435.3 99204324.0 03076254.6 |
0 568 608 0 800 584 1 001 034 1 342 787 |
|||
*
|
* | * | ||||
Hong Kong
|
Published 21 May 04 | 4101355.3 | HK 1058528A | |||
Indonesia
|
Granted 22 Dec 95 | P-001679 | ID 0000393 | |||
Israel
|
Granted 1 Oct 95 | 100,732 | 100,732 | |||
*
|
* | * | ||||
Mexico
|
Granted 6 Jul 01 | 9200301 | 202940 | |||
| * | * | |||||
New Zealand
|
Granted 8 Feb 95 | 241,358 | 241,358 | |||
*
|
* | * | ||||
OAPI (French Africa)
|
Granted 15 Sep 94 | PV 60397 | 09909 | |||
PCT
|
Published 6 Aug 1992 | PCT/92US/00517 | WO 92/13086 | |||
| Published 11 Jul 1996 | PCT/US96/00182 | WO 96/21037 | ||||
Philippines
|
Granted 22 Aug 02 | 1992 -43811 | 00000 | |||
Xxxxxx
|
Granted 14 Jan 04 | P321,208 | 187694 | |||
Russia
|
Granted 29 Jan 98 | 93-054772 | 0000000 | |||
Xxxxxxxxx
|
Granted 00 Xxx 00 | 0000000.0 | 00000 | |||
Xxxxx Xxxxx
|
Granted 1 Feb 00 | |||||
| Granted 29 Jun 01 | 1993-702193 | 254300 | ||||
| Opposition Pending | 1999-7008800 | 302036 | ||||
| * | * | |||||
South Africa
|
Granted 28 Oct 92 | 92/0454 | 92/0454 | |||
Sri Lanka
|
Granted 27 Oct 93 | 10527 | 10527 | |||
United States
|
Granted 19 Aug 97 | 08/367,881 | 5,658,767 |
| * | 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. |
- 24 -
“Docosahexaenoic Acid, Methods for its Production
and Compounds Containing the Same”
and Compounds Containing the Same”
| Country | Status | Application No. | Publ. or Patent No. | |||
Australia
|
Granted 15 Jun 95 | 73302/91 | 660,162 | |||
*
|
* | * | ||||
Canada
|
Granted 2 May 00 | 2,076,018 | 2,076,018 | |||
Europe
(designates
Austria, Belgium,
Denmark, France,
Greece, Germany,
Great Britain,
Italy, Luxembourg,
Netherlands,
Romania, Spain,
Sweden, and
Switzerland/
Liechtenstein)
|
Granted 22 Apr 1998 | 91903945.3 | 0 515 460 | |||
Israel
|
Granted 16 Jun 95 | 97,126 | 97,126 | |||
| Granted 11 Jun 98 | 111,174 | 111,174 | ||||
Japan
|
Granted 25 Sep 98 | 504147/91 | 2830951 | |||
| Published | 10-177561 (0000) | 00-000000 | ||||
| * | * | |||||
| * | * | |||||
PCT
|
Nationalized | PCT/US91/00733 | WO 91/11918 | |||
| Published 22 Aug 0000 | ||||||
Xxxxxxxxxxx
|
Granted 3 Nov 98 | I 41991 | 31568 | |||
| Granted 26 May 03 | I 54562 | 1-1996-54562 | ||||
| Granted 5 Aug 03 | I 54563 | 1-1996-54563 | ||||
South Korea
|
Granted 8 Jan 01 | 91-701943 | 285870 | |||
| Granted 22 Dec 00 | 98-708207 | 284731 | ||||
| Granted 13 Apr 01 | 7011087 | 294293 | ||||
United States
|
Granted 14 Mar 95 | 07/916,874 | 5,397,591 | |||
| Granted 18 Apr 95 | 07/479,135 | 5,407,957 | ||||
| Granted 20 Feb 96 | 08/386,079 | 5,492,938 | ||||
| Granted 27 Jan 98 | 08/583,845 | 5,711,983 |
| * | 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. |
