EXHIBIT 10.1
6/24/92
SUPPLY AGREEMENT
----------------
THIS SUPPLY AGREEMENT is made as of the lst day May, 1992 ("Effective
Date"), by and between Xxxxxx Laboratories, an Illinois corporation having a
principal place of business at Xxx Xxxxxx Xxxx Xxxx, Xxxxxx Xxxx, Xxxxxxxx
00000-0000 ("Abbott"), and Steris Laboratories, Inc., a Delaware corporation
having a principal place of business at 000 Xxxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxx
00000 ("Steris").
WHEREAS, Steris' New Drug Application ("NDA") has been approved by the
United States Food and Drug Administration ("FDA") for the use of the finished
drug product iron dextran ("Product"), which incorporates Drug Substance, as
defined below, in various human pharmaceutical areas;
WHEREAS, Steris' supplement to the NDA for Product, which incorporates Drug
Substance, which names Abbott as the supplier of Drug Substance has been
approved by the FDA;
WHEREAS, Abbott has developed a proprietary process for the manufacture of
Drug Substance; and
WHEREAS, Abbott desires to manufacture exclusively for Steris commercial
quantities of Drug Substance using such proprietary process and Steris desires
to purchase from Abbott such commercial quantities of Drug Substance.
NOW, THEREFORE, in consideration of the above premises and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
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1. Definitions
-----------
As used in this Agreement, the following words and phrases shall have the
following meanings:
1.1 "Affiliate" of a party hereto shall mean any entity which controls, is
controlled by, or is under common control with such party. For purposes of this
definition, a party shall be deemed to control another entity if it owns or
controls, directly or indirectly, at least fifty percent (50%) of the voting
equity of another entity (or other comparable ownership interest for an entity
other than a corporation).
1.2 "Confidential Information" shall mean all written information and data
provided by the parties to each other hereunder and marked as confidential, or
if disclosed orally, is reduced to writing within thirty (30) days of oral
disclosure and identified as being confidential, except any portion thereof
which:
(i) is known to the recipient as evidenced by its written records
before receipt thereof under this Agreement;
(ii) is disclosed to the recipient after acceptance of this
Agreement by a third person who has the right to make such
disclosure;
(iii) is or becomes part of the public domain through no fault of the
recipient; or
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(iv) is independently developed by employees of the recipient who
have not had access to the information disclosed hereunder.
1.3 "Contract Requirements" shall mean one hundred percent (100%) of the
worldwide requirements for Drug Substance of Steris and its Affiliates.
1.4 "Drug Substance" shall mean iron dextran bulk solution, as more fully
described in the Drug Substance Specifications, as defined below.
1.5 "Drug Substance Specifications" shall mean the specifications for Drug
Substance, which are attached hereto and made a part hereof as Exhibit A.
1.6 "Drug Substance Technology" shall mean the manufacturing process for
Drug Substance developed by Abbott from October 30, 1989 until November 2, 1990
under that certain Development Contract between the parties dated December 1,
1989 ("Development Contract").
2. Manufacture and Supply of Drug Substance
----------------------------------------
2.1 Pursuant to the terms and conditions of this Agreement, Steris shall
purchase or have purchased from Abbott, and Abbott shall use its reasonable best
efforts to manufacture, or have manufactured, sell and deliver to Steris the
Contract Requirements; provided, however, Abbott makes no representation,
warranty or guarantee of any kind that Abbott will be able to manufacture the
Contract Requirements. During the term of this Agreement, Abbott shall sell Drug
Substance to Steris on an
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exclusive worldwide basis except as provided in subparagraph 5.4 and paragraph
14 hereof, and Steris shall purchase or have purchased from Abbott Drug
Substance on an exclusive worldwide basis. The provisions of this subparagraph
2.1 shall apply regardless of the technology employed by Abbott in manufacturing
the Drug Substance.
2.2 Drug Substance shall be manufactured to conform with the Drug
Substance Specifications. Drug Substance Specifications may be modified from
time to time by written agreement signed by an authorized representative of each
party without the necessity of amending this Agreement.
2.3 Abbott shall have the right to manufacture, sell, ship, market or
distribute Product; provided that such Product is not manufactured with Drug
Substance or technology relating to Drug Substance obtained from Abbott or a
licensee or sublicensee of Abbott.
2.4 During the term of this Agreement and for a period of one (1) year
following termination or expiration hereof, Abbott shall not sell, distribute,
license, provide or transfer any Drug Substance or Drug Substance Technology or
any rights thereto, except to Steris; provided, however, such restriction shall
not be enforceable by Steris upon the bankruptcy or insolvency of Steris or upon
Steris' breach of this Agreement under subparagraph 4.2 hereof.
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3. Price
-----
3.1 The price for Drug Substance delivered from the Effective Date through
December 31, 1993 shall be *** ******** **** ******* ************ *** ******
******* *********** per liter based on a density factor of **** kilograms per
liter, regardless of which technology Abbott employs in manufacturing the Drug
Substance. Thereafter, on or before July 1 of each calendar year, starting July
1, 1993, Abbott and Steris shall negotiate in good faith to adjust the price for
Drug Substance for the next succeeding calendar year based on market conditions
for Product and Drug Substance; provided, however, the parties shall meet on or
before March 31 of each calendar year, starting March 31, 1994, to review the
then-current price for Drug Substance to determine in good faith whether market
conditions for Product and Drug Substance justify a price adjustment for Drug
Substance for the third and fourth quarters of the then-current calendar year.
If the parties mutually agree in writing that a price adjustment is justified,
such adjustment shall apply to all Drug Substance ordered from Abbott by Steris
and its Affiliates from July 1 through December 31 of the then-current calendar
year.
3.2 Drug Substance shall be delivered to Steris F.O.B. Xxxxxx'x plant in
North Chicago, Illinois, by a common carrier selected by Steris.
* redacted pursuant to confidential treatment request.
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3.3 Abbott shall invoice Steris upon shipment of Drug Substance. Payment
shall be made by Steris net thirty (30) days from the date of invoice.
3.4 Any federal, state, county, or municipal sales or use tax, excise or
similar charge, or other tax assessment (other than that assessed against
income), assessed or charged on the sale of Drug Substance sold pursuant to this
Agreement shall be paid by Steris. Notwithstanding the preceding sentence,
Steris may furnish Abbott any exemption certificate for which Steris is entitled
or authorized to issue with respect to the taxes imposed on the sale or use of
Drug Substance sold hereunder.
3.5 Due to the restrictive shipping requirements contained in Xxxxxx'x
drug master file for Drug Substance ("DMF"), no Drug Substance shall be subject
to rework.
4. Term and Termination
--------------------
4.1 This Agreement shall commence as of the Effective Date and, subject to
the next following sentence, shall end at midnight on December 31, 1996
("Initial Term"). At the end of the Initial Term, this Agreement shall continue
automatically for successive twelve-month periods under the same terms and
conditions hereunder (except for the price for Drug Substance), until
terminated. Except as otherwise provided herein, this Agreement may be
terminated at the expiration of the Initial Term or at the expiration of any of
the twelve-month extension periods thereafter (i) by Abbott upon not less than
eighteen (18) months
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prior written notice or (ii) by Steris upon not less than six (6) months prior
written notice.
4.2 Either party may terminate this Agreement by giving the other sixty
(60) days prior written notice as follows: (i) upon the bankruptcy or insolvency
of the other party; or (ii) upon the breach of any material provision of this
Agreement by the other party if the breach is not cured within thirty (30) days
after written notice thereof to the breaching party.
4.3 Termination, expiration, cancellation or abandonment of this Agreement
through any means or for any reason shall not relieve the parties of any
obligation accruing prior thereto and shall be without prejudice to the rights
and remedies of either party with respect to any antecedent breach of any of the
provisions of this Agreement. Except as otherwise provided in paragraph 15
hereof, upon termination, expiration, cancellation or abandonment of this
Agreement through any means or for any reason whatsoever, Steris shall have the
complete, exclusive, perpetual and unrestricted right to use and exploit the
Drug Substance Technology without any obligation to Abbott. The foregoing
sentence and subparagraph 2.4 hereof shall survive termination or expiration of
this Agreement.
4.4 In the event Steris terminates this Agreement as a result of the
bankruptcy or insolvency of Abbott or Xxxxxx'x breach of this Agreement under
subparagraph 4.2 above, without limiting any other remedy available to Steris,
Abbott shall continue to supply Drug Substance to Steris pursuant to the terms
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hereof for the eighteen (18) month period following the effective date of such
termination.
5. Forecasts Deliveries and Orders
-------------------------------
5.1 Each July 1 during the Initial Term of this Agreement or any extension
thereof, Steris shall provide to Abbott an annual forecast for the next
succeeding calendar year estimating the Contract Requirements for such year.
This forecast shall be non-binding and shall be used for planning purposes only.
Further, during the Initial Term of this Agreement or any extension thereof,
Steris shall issue on the date hereof, and then on or before the first business
day of each calendar quarter thereafter, a non-binding twelve (12) month
forecast estimating in good faith the Contract Requirements for the next
succeeding four (4) quarterly periods.
5.2 Notwithstanding the quantities listed in Steris' rolling twelve (12)
month forecasts, Steris shall be obligated to purchase from Abbott and Abbott
shall be obligated to sell to Steris ***** liters of Drug Substance from the
Effective Date until December 31, 1993. The delivery schedule for the *****
liters of Drug Substance shall be arranged in accordance with the terms of
subparagraph 5.3 below; provided, however the entire ***** liters of Drug
Substance shall be delivered to Steris not later than December 31, 1993. The
foregoing in no respect limits the provisions of subparagraph 2.1 hereof. If
Steris fails to purchase from Abbott at least ***** liters of Drug Substance by
December 31, 1993, then Steris shall pay Abbott, in respect of
* redacted pursuant to confidential treatment request.
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any such shortfall, Xxxxxx'x cost of raw materials and other direct costs which
can be supported with reasonable documentation for such shortfall.
5.3 On or before forty-five (45) days prior to each calendar quarter,
Steris shall submit in writing to Abbott a statement quantifying the Contract
Requirements for the next succeeding calendar quarter. Upon receipt of such
statement, Abbott shall have ten (10) days to submit in writing to Steris a firm
delivery schedule setting forth the quantity of Drug Substance Abbott shall be
able to sell and deliver to Steris. Upon receipt of each firm delivery schedule,
Steris shall promptly submit to Abbott a firm purchase order for Drug Substance
for the next succeeding calendar quarter reflecting the same terms of Xxxxxx'x
firm delivery schedule. If Abbott fails to timely submit such delivery schedule,
Abbott shall be obligated to sell and deliver to Steris the Contract
Requirements listed in Steris' earlier submitted written statement. Each
purchase order issued by Steris shall be governed by the terms of this
Agreement, and none of the terms or conditions of Steris' purchase order shall
be applicable, except those specifying quantity ordered, delivery dates, special
supply instructions and invoice information.
5.4 During the term of this Agreement, Steris may obtain or receive from
any other party a reference letter with respect to such party's drug master file
required to manufacture, market and sell the Drug Substance in the United States
or in any other
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territory, or initiate or carry out any development work in connection with the
Drug Substance with any other party, for purposes of securing an alternate
source of the Drug Substance in the event of a force majeure as described in
paragraph 14 hereof.
6. Manufacture of Drug Substance
-----------------------------
6.1 Drug Substance shall be manufactured in accordance with current Good
Manufacturing Practices promulgated by the FDA and pursuant to the applicable
DMF prepared by Abbott and filed with the FDA or foreign regulatory authorities
as requested by Steris. Abbott shall promptly advise Steris of any proposed
process change outside the applicable DMF, which change must be approved by
Steris prior to its implementation by Abbott, and which approval shall not be
unreasonably withheld by Steris. Steris shall have the right to audit Abbott for
compliance with current Good Manufacturing Practices at reasonable intervals.
Such audits shall be scheduled at mutually agreeable times upon at least fifteen
(15) days advance written notice to Abbott.
6.2 For each shipment of Drug Substance delivered hereunder, Abbott shall
provide to Steris certificates of analysis, batch record documentation as
specified in Exhibit B, attached hereto and made a part hereof, and final yield
quantity information. Further, Abbott shall follow the procedures described in
Exhibit B.
6.3 Each party shall promptly advise the other of any safety or toxicity
problem or any FDA regulatory or compliance activity of which either party
becomes aware regarding Drug
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Substance or intermediates used in the manufacture of Drug Substance.
6.4 Steris shall pay Abbott for its direct costs pre-approved by Steris
associated with any FDA filing by Abbott requested by Steris of more than one
(1) DMF in support of Steris' regulatory filings with respect to Drug Substance.
Steris also shall pay Xxxxxx'x direct costs pre-approved by Steris for any work
requested by Steris to produce and assemble documentation for Drug Substance
registrations outside the United States.
6.5 Abbott shall provide Steris with technical assistance as may be
reasonably requested by Steris from time to time; provided such request relates
to Drug Substance delivered by Abbott or Product manufactured by Steris from
such Drug Substance, including, without limitation, assistance relating to test
methods, specifications, and impurity/degradation product identification. Abbott
shall provide Steris with a written estimate of such technical assistance;
provided, however, Abbott shall not perform any work under this subparagraph
until such time as Abbott and Steris mutually agree to a price for Abbott to
perform such technical assistance.
7. Acceptance of Drug Substance
----------------------------
7.1 Subject to the terms of Steris' NDA for Product, Steris shall have a
period of twenty (20) days from the date of receipt of Drug Substance to inspect
and accept or advise Abbott in writing that a shipment of Drug Substance does
not conform with
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Drug Substance Specifications. If Steris does not accept all or any part of a
shipment of Drug Substance, then the parties shall have ninety (90) days from
the date of Xxxxxx'x receipt of Steris' notification to resolve any dispute
regarding whether all or any part of such shipment of Drug Substance conforms
with the Drug Substance Specifications. If the parties are unable to resolve any
such dispute within the ninety (90) day period, Steris shall be deemed to have
rejected the Drug Substance in dispute. Steris shall have the right to return
any Drug Substance which does not conform, whether such non-conformance is
discovered before, during or after processing of Product. All or any part of any
shipment may be held for Xxxxxx'x disposition and at Xxxxxx'x expense if found
to be not in conformance with the Drug Substance Specifications. Without
limiting subparagraph 9.2 or paragraph 11 hereof, no claims under this
subparagraph 7.1 with respect to rejected Drug Substance shall be greater in
amount than the purchase price of such Drug Substance. Steris' failure to timely
advise Abbott that a shipment of Drug Substance does not conform to the Drug
Substance Specifications shall constitute a waiver of any claims it may have
against Abbott with respect to such shipment. Disputes between the parties as to
whether all or any part of a shipment rejected by Steris conforms with the Drug
Substance Specifications shall be resolved by an independent GMP testing
laboratory or consultant acceptable to Abbott and Steris. In the event that such
independent GMP testing laboratory or consultant cannot be agreed upon, the
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parties shall resolve the issue of whether all or any part of such shipment
conforms with the Drug Substance Specifications through the alternative dispute
resolution ("ADR") described in Exhibit C, which is attached hereto and made a
part hereof.
7.2 Xxxxxx'x quality control procedures and in-plant quality control
checks on the manufacture of Drug Substance for Steris shall be applied in the
same manner as those procedures and checks are applied to products manufactured
for sale by Abbott.
8. Representations, Warranties, Covenants and Guarantees
-----------------------------------------------------
8.1 Abbott guarantees and warrants that Drug Substance delivered to Steris
pursuant to this Agreement shall, at the time of delivery, not be adulterated or
misbranded within the meaning of the Federal Food, Drug and Cosmetic Act, as
amended, or within the meaning of any applicable state or municipal law in which
the definitions of adulteration and misbranding are substantially the same as
those contained in the Federal Food, Drug and Cosmetic Act, as such Act and such
laws are constituted and effective at the time of delivery and will not be an
article which may not, under the provisions of Sections 404 and 505 of such Act,
be introduced into interstate commerce.
8.2 Abbott and Steris represent, warrant and covenant to each other that
such party has all requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
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8.3 Abbott and Steris represent and warrant to each other that such party
is not currently debarred or suspended by any United States government agency
from receiving federal contracts.
8.4 Abbott further represents and warrants that:
i) it has the right and is fully empowered to manufacture and sell
the Drug Substance to Steris as contemplated hereby; and
ii) neither the import of any raw material for the manufacture of
Drug Substance as contemplated hereby nor the manufacture of Drug Substance as
contemplated hereby will involve any infringement of any existing patents or
proprietary rights of third parties for or in the Drug Substance, nor has Abbott
received any notice of any claimed infringement (including, without limitation
patent infringement) in connection with the Drug Substance.
8.5 This Agreement is on a principal to principal basis. Without limiting
the terms and conditions of paragraphs 9 and 11 hereof, neither party is
authorized nor shall it incur any liability whatsoever for which the other may
become directly, indirectly or contingently liable; nor shall either party hold
itself out as having authority to represent or act on behalf of the other in any
capacity whatsoever; nor shall the relationship be construed as a co-
partnership, joint venture or principal-agent relationship.
8.6 Abbott warrants that Drug Substance delivered to Steris pursuant to
this Agreement shall conform with the Drug Substance
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Specifications and shall be in compliance with applicable law and all applicable
regulatory requirements of the FDA. ABBOTT MAKES NO OTHER WARRANTIES, EXPRESS OR
IMPLIED, WITH RESPECT TO DRUG SUBSTANCE. ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY DISCLAIMED BY ABBOTT. IN NO
EVENT SHALL ABBOTT BE LIABLE FOR INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES
OF STERIS OR ITS AFFILIATES; PROVIDED THAT THE FOREGOING SHALL IN NO RESPECT
LIMIT XXXXXX'X OBLIGATIONS UNDER SUBPARAGRAPHS 9.2 AND 11.1 HEREOF.
9. Indemnification
---------------
9.1 Steris shall indemnify and hold Abbott and its employees, servants and
agents harmless from and against any and all liabilities, claims, demands,
actions, suits, losses, damages, costs and expenses (including reasonable
attorney's fees) based upon the death or any actual bodily injury or physical
property damage resulting from the packaging, labeling, handling, storage,
promotion, marketing, distribution, use or sale of Drug Substance or Product by
Steris, its Affiliates, or any third party claiming an interest in Drug
Substance or Product through Steris or its Affiliates (the "Indemnitors") to the
extent any of the foregoing results from the Indemnitors, negligence, willful
misconduct or material breach of any of their obligations under this Agreement.
9.2 Abbott shall indemnify and hold Steris and its Affiliates and their
respective employees, servants and agents
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harmless from and against any and all liabilities, claims, demands, actions,
suits, losses, damages, costs and expenses (including reasonable attorney's
fees) based upon the death or any actual bodily injury or physical property
damage resulting from Xxxxxx'x negligence or willful misconduct in its
manufacture or handling of Drug Substance, or its material breach of any of its
obligations under this Agreement.
9.3 Each of the parties shall promptly notify the other of any such claim
or potential claim covered by any of the above subparagraphs in this paragraph 9
and shall include sufficient information to enable the other party to assess the
facts. Each of the parties shall cooperate fully with the other party in the
defense of all such claims. No settlement or compromise shall be binding on a
party hereto without its prior written consent.
10. Product Recall
--------------
10.1 In the event of a recall ordered by a government agency or a confirmed
Product failure ("Recall"), Steris shall be responsible for the coordination of
Recall activities.
10.2 Where the Recall is caused by Xxxxxx'x negligence or willful
misconduct or its material breach of any of its obligations or warranties under
this Agreement, Abbott agrees to pay all costs and expenses of any Recall,
including costs of retrieving Product already delivered to Steris' customers.
Abbott further agrees to reimburse Steris for costs and expenses Steris is
required to pay for notification, shipping and handling charges. Prior to any
such reimbursement, Steris shall provide
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Abbott with supporting documentation of all reimbursable costs and expenses. If
the Recall is caused by reasons other than Xxxxxx'x negligence, willful
misconduct or material breach of any of its obligations or warranties hereunder,
Steris shall pay all of the costs and expenses described above for such Recall.
11. Patent Indemnification
----------------------
11.1 Abbott shall indemnify and hold Steris and its Affiliates and their
respective employees, servants and agents (the "Indemnitees") harmless from and
against any and all liabilities, claims, demands, actions, suits, losses,
damages, costs and expenses (including reasonable attorney's fees) which Steris
may incur, suffer or be required to pay by reason of any patent infringement
suit or claim of violation of any proprietary right of any third party brought
against any of the Indemnitees because of Xxxxxx'x manufacture of Drug Substance
or relating to the Drug Substance Technology.
11.2 Steris shall indemnify and hold Abbott and its employees, servants and
agents harmless from and against any and all liabilities, claims, demands,
actions, suits, losses, damages, costs and expenses (including reasonable
attorney's fees) which Abbott may incur, suffer or be required to pay by reason
of any patent infringement suit or claim of violation of any proprietary right
of any third party brought against Abbott because of Steris' formulation or use
of Drug Substance or Product, except to the extent arising from Xxxxxx'x
manufacture of Drug Substance or relating to the Drug Substance Technology.
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11.3 Each of the parties shall promptly notify the other of receipt of any
notice of infringement or violation of any proprietary right and shall permit
the other party to defend such actions in such manner as that party, in its sole
discretion, shall choose to defend it. Further, each party shall cooperate fully
with the other in the defense of any such suit. No settlement or compromise
shall be binding on a party hereto without its prior written consent.
12. Insurance
---------
Each party shall, at its sole cost and expense, obtain and keep in force
comprehensive general liability insurance, including any applicable self-
insurance coverage, with bodily injury, death and property damage limits of Five
Million and 00/100 Dollars ($5,000,000.00) per occurrence and Five Million and
00/100 Dollars ($5,000,000.00) in the aggregate, including contractual liability
and product liability coverage. Upon execution of this Agreement, each party
shall furnish the other with a certificate of insurance signed by an authorized
representative of such party's insurance underwriter evidencing the insurance
coverage required by this Agreement and providing for at least thirty (30) days
prior written notice to the other party of any cancellation, termination or
reduction of such insurance coverage.
13. Confidential Information
------------------------
It is contemplated that in the course of the performance of this Agreement
each party may, from time to time, disclose
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Confidential Information to the other. Each party agrees to take all reasonable
steps to prevent disclosure of Confidential Information. No provision of this
Agreement shall be construed so as to preclude disclosure of Confidential
Information as may be reasonably necessary to secure from any governmental
agency necessary approvals or licenses or to obtain patents with respect to Drug
Substance, Drug Substance Technology or Product. Such obligations of the parties
relating to Confidential Information shall expire five (5) years after
expiration or termination of this Agreement.
14. Force Majeure
-------------
Any delay in the performance of any of the duties or obligations of either
party hereto (except the payment of money) caused by an event outside the
affected party's reasonable control shall not be considered a breach of this
Agreement, and unless provided to contrary herein, the time required for
performance shall be extended for a period equal to the period of such delay.
Such events shall include without limitation, acts of God; acts of the public
enemy; insurrections; riots; injunctions; embargoes; labor disputes, including
strikes, lockouts, job actions, or boycotts; fires; explosions; floods;
shortages of material or energy; delays in the delivery of raw materials; or
other unforeseeable causes beyond the reasonable control and without the fault
or negligence of the party so affected. The party so affected shall give prompt
notice to the other party of such cause, and shall take whatever reasonable
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steps are appropriate in that party's discretion to relieve the effect of such
causes as rapidly as possible. Without limiting the foregoing, if any such event
continues for thirty (30) days or more, Steris may purchase Drug Substance from
an alternate source or sources until such time as the affected party is able to
cure the event of force majeure.
15. Technical Exchange
------------------
15.1 Abbott hereby grants to Steris a royalty free, worldwide, perpetual,
exclusive except for Abbott, and irrevocable license for the use and practice of
the Drug Substance Technology commencing as follows:
(i) if notice of termination hereof is provided by either party
after December 31, 1996, the aforesaid Drug Substance Technology license shall
commence on the 30th day following receipt of such notification;
(ii) except as provided in subparagraph 15.1 (iii) below, if notice
of termination hereof is provided by either party on or before December 31,
1996, the aforesaid Drug Substance Technology license shall commence on December
31, 1996; or
(iii) upon the bankruptcy or insolvency of Abbott or a determination
of breach by Abbott under ADR or judicial procedures, the aforesaid Drug
Substance Technology license shall commence on the 60th day following such
event.
15.2 The license granted in subparagraph 15.1 hereof shall be in
consideration of sums and other good and valuable
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consideration heretofore provided by Steris to Abbott, receipt of which is
hereby acknowledged by Abbott, and shall be at no additional expense to Steris.
The license shall include the right to use all proprietary technical information
and know-how reasonably necessary for the practice of the Drug Substance
Technology, and Abbott shall provide the same to Steris on the applicable
commencement date of the license.
15.3 Abbott hereby grants to Steris the right of first refusal to acquire
the rights to technology other than the Drug Substance Technology relating to
manufacture of Drug Substance, which Abbott may desire to transfer. The
provisions of this subparagraph 15.3 shall survive termination, expiration,
cancellation or abandonment of this Agreement through any means or for any
reason for a period of three (3) years.
16. Notices
-------
All notices hereunder shall be delivered personally or by registered or
certified mail, postage prepaid, or by facsimile or express mail, to the
following addresses of the respective parties:
If to Abbott: Xxxxxx Laboratories
President, Chemical and
Agricultural Products Division
0000 Xxxxx Xxxxxxxx Xxxx
Xxxxx Xxxxxxx, XX 00000-0000
With copy to: Xxxxxx Laboratories
Senior Vice President and
General Counsel
Xxx Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, XX 00000-0000
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If to Steris: Steris Laboratories, Inc.
000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: President
With copy to: Steris Laboratories, Inc.
General Counsel
00 Xxxxxx Xxxx Xxxxx
Xxxx Xxxxxxxxxx, XX 00000
Notices shall be effective upon receipt if personally delivered, on the third
business day following the date of mailing if sent by registered or certified
mail, and on the second business day following the date of transmission or
delivery to the express mail service if sent by facsimile or express mail. A
party may change its address listed above by notice to the other party.
17. Applicable Law
--------------
This Agreement shall be construed, interpreted and governed by the laws of
the State of Illinois, except for choice of law rules. Any controversy or claim
arising out of or relating to this Agreement, or the breach thereof, shall be
resolved through ADR procedures.
18. Assignment
----------
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective permitted assigns and successors in
interest; provided, however neither party shall assign this Agreement or any
part thereof without the prior written consent of the other party; and further
provided that either party, without such consent, may assign or sell the same in
connection with the transfer or sale of substantially its
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entire business to which this Agreement pertains, in the event of its merger or
consolidation with another company or in the event of the transfer or sale to a
wholly-owned subsidiary. Any permitted assignee or transferee shall assume all
obligations of its assignor under this Agreement. No assignment shall relieve
any party of responsibility for the performance of any accrued obligation which
such party then has hereunder.
19. Entire Agreement
----------------
Except for the Development Contract, this Agreement constitutes the entire
agreement between the parties concerning the subject matter hereof and
supersedes all written or oral prior agreements or understandings with respect
thereto.
20. Severability
------------
If any term or provision of this Agreement shall for any reason by held
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other term or provision hereof, and this
Agreement shall be interpreted and construed as if such term or provision, to
the extent the same shall have been held to be invalid, illegal or
unenforceable, had never been contained herein.
21. Waiver - Modification of Agreement
----------------------------------
No waiver or modification of any of the terms of this Agreement shall be
valid unless in writing and signed by authorized representatives of both parties
hereto. Failure by either party to enforce any rights under this Agreement shall
not
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be construed as a waiver of such rights nor shall a waiver by either party in
one or more instance be construed as constituting a continuing waiver or as a
waiver in other instances.
22. Counterparts
------------
This Agreement may be executed in any number of separate counterparts, each
of which shall be deemed to be an original, but which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed by
their duly authorized representatives as of the later date written below.
XXXXXX LABORATORIES STERIS LABORATORIES, INC.
By: /s/ Xxxxxx X. XxXxxxx By: [SIGNATURE ILLEGIBLE]
------------------------------ -------------------------------------
Xxxxxx X. XxXxxxx
President, Chemical
and Agricultural Title: Vice President, Scientific
---------------------------------
Products Division Operations
Date: June 25, 1992 Date: June 26, 1992
---------------------------- -----------------------------------
XXXXXX LABORATORIES
AND
STERIS LABORATORIES, INC.
SUPPLY AGREEMENT
EXHIBIT A
---------
Drug Substance Specifications
-----------------------------
**** **** * **** ******* *****
***** * ***** ******* ** ******* *******
******* ******* **** * **** ******* *****
********** **** ***** ********
************** ******
** *** * ***
************ ******* **** * **** ******* *****
******** ******* **** * **** ******* *****
****** *** **** **** ** ******
**** *** **** **** ** ******
**** *** **** **** *** ******
******* *** **** **** * ******
******* ****** ****
********* ******* ** **** ******** *********
***** ********* ***** *** **** **** ** ******
******** ******* *** **** **** *** ******* ***
The Drug Substance delivered hereunder will satisfy conditions for
Iron Dextran bulk solution set forth in Steris' NDA, the DMF
and the United States Pharmacopeia XXII.
* redacted pursuant to confidential treatment request.
XXXXXX LABORATORIES
AND
STERIS LABORATORIES, INC.
SUPPLY AGREEMENT
EXHIBIT B
---------
I. Documentation
-------------
1. Certificate of Manufacturing Conformance and supporting deviation
reports if applicable.
2. Interim Certificate of Analysis.
3. Full Certificate of Analysis in duplicate.
4. Abbott shall issue a Non-Conforming Material Report to document
deviations from established procedures. Steris shall be provided with
a copy for approval and signature.
5. Abbott shall advise Steris of any changes to the Drug Master File for
the Drug Substance which would require prior approval by the FDA.
II. Procedures
----------
1. Three (3) identification tags will accompany each vessel of Drug
Substance. Tags will list name of product, lot number, gross, net and
tare weight and the sequential number of the vessel in the series.
2. Each vessel shall be sealed in a tamper-evident manner.
3. *********** **** ***** ** ** ******** ** ****** ****** ** ***** *****
**** **** ** ***** *********** ** ******* ********* **** **** **
******** ****** **** *** *****
4. Abbott shall provide an interim Certificate of Analysis with each
batch (see item 3). The Certificate will contain results appearance,
for pH, Iron Content, Dextran Content and Chloride.
5. The final Certificate of Analysis and Certificate of Manufacturing
conformance must be received by Steris within eight (8) days of
compounding by Abbott.
* redacted pursuant to confidential treatment request.
6. Each vessel shall be a clean depyrogenated vessel. Abbott will not
alter the container/closure system without the approval of Steris.
7. *** **** ******** ***** ** **** ******* ***** ******* ****** *******
** ****** ********
* redacted pursuant to confidential treatment request.
XXXXXX LABORATORIES
AND
STERIS LABORATORIES, INC.
SUPPLY AGREEMENT
EXHIBIT C
---------
Alternative Dispute Resolution
------------------------------
The parties agree that any dispute that arises in connection with this Agreement
and which cannot be amicably resolved by the parties shall be resolved by
binding Alternative Dispute Resolution ("ADR") in the manner described below.
(a) If a party intends to begin an ADR to resolve a dispute, such party shall
provide written notice to the other party informing the other party of such
intention and the issues to be resolved. Within ten (10) business days
after its receipt of such notice, the other party may, by written notice to
the party initiating ADR, add additional issues to be resolved. Within
twenty (20) business days following the receipt of the original ADR notice,
the parties shall select a mutually acceptable neutral. If the parties are
unable to agree on a mutually acceptable neutral within such twenty (20)
days, a neutral shall be selected by the then President of the Center for
Public Resources ("CPR"), 000 Xxxxx Xxx., Xxx Xxxx, Xxx Xxxx, 00000. Such
person shall be an individual who shall preside in resolution of any
disputes between the parties. The neutral selected shall not be an
employee, director or shareholder of either party or of an affiliate of
either party. This selection shall be final.
(b) No later than thirty (30) business days after selection, the neutral shall
hold a hearing to resolve each of the issues identified by the parties.
(c) At least twenty-five (25) business days prior to the hearing, each party
shall submit to the other party (the "receiving party") and the neutral a
list of all documents on which such party intends to rely in any oral or
written presentation to the neutral and a list of all witnesses, if any,
such party intends to call at such hearing. Within ten (10) business days
after the receiving party makes a request therefor, which request must be
given at least twenty (20) business days prior to the hearing, such other
party shall deliver to the receiving party (i) one true and correct copy of
each of the documents on the above-referenced list requested by such
receiving party and (ii) a summary of the anticipated testimony of each of
such party's witnesses.
Except as expressly set forth herein, the neutral shall not require nor
shall there be any discovery by any means, including depositions,
interrogatories or production of documents.
(d) At least five (5) business days prior to the hearing, each party must
submit in writing to the neutral and serve on the other party a proposed
ruling on each issue to be resolved. Such writing shall be limited to
representing the proposed rulings, shall contain no argument on or analysis
of the facts or issues, and shall be limited to not more than fifty (50)
pages.
(e) Each party shall be entitled to no more than five (5) hours of hearing to
present testimony or documentary evidence. The testimony of both parties
shall be presented during the same calendar day. Such time limitation
shall include any direct, cross or rebuttal testimony, but such time
limitation shall only be charged against the party conducting such direct,
cross or rebuttal testimony. It shall be the responsibility of the neutral
to determine whether the parties have had the five (5) hours to which they
are entitled.
(f) Each party shall have the right to be represented by counsel. The neutral
shall have sole discretion with regard to the admissibility of any
evidence.
(g) The neutral may attempt to resolve any disputed issue by proposing a
compromise to the parties. If, however, the neutral does not propose a
compromise or the neutral proposes a compromise and either or both of the
parties fail to accept such compromise, the neutral shall rule on each
disputed issue within ten (10) days following the completion of the
testimony of both parties. Such ruling shall adopt in its entirety the
proposed ruling of one of the parties on each disputed issue.
(h) ADR shall take place at a location agreed by the parties, or if the parties
are unable to agree, then as designated by the neutral. All costs incurred
for a hearing room shall be shared equally by the parties.
(i) The neutral shall be paid a reasonable fee plus expenses, which fees and
expenses shall be shared equally by the parties.
(j) Any judgment on the ruling of the neutral may be entered in any court
having jurisdiction thereof.
[LETTERHEAD OF ABBOTT APPEARS HERE]
December 2, 1993
Xx. Xxxxx X. Plaza
Senior Vice President and General Manager
SCHEIN PHARMACEUTICAL, INC.
000 Xxxxx 00xx Xxxxxx
Xxxxxxx, XX 00000
Dear Mr. Plaza:
This letter agreement shall amend the Supply Agreement dated as of May 1, 1992
between Xxxxxx Laboratories and Steris Laboratories, Inc. ("Agreement") in
accordance with the terms and conditions negotiated between the parties over the
past two months. The amended terms and conditions effective for 1994 are as
follows.
1. The definitions used herein shall have the same meaning as used in the
Agreement.
2. Steris shall purchase from Abbott not less than ***** liters of Drug
Substance at ********* per liter.
3. The price for Drug Substance from ***** to ***** liters shall be *********
per liter.
4. The price for Drug Substance in excess of ***** liters will be negotiated
in good faith by the parties.
5. Abbott shall guarantee the manufacture and delivery of ***** liters of Drug
Substance.
6. This letter agreement and the terms and conditions contained herein shall
be effective as of January 1, 1994. Except as contemplated by item 4,
above, the prices set forth herein shall remain firm and shall not be
subject to adjustment for calendar year 1994.
7. Except as otherwise provided hereunder, all other terms and conditions of
the Agreement shall remain in full force and effect.
* redacted pursuant to confidential treatment request.
Xx. Xxxxx X. Plaza
December 2, 1993
Page 2
If the foregoing terms and conditions of this letter agreement are acceptable,
please sign and date both originals and return one original to Abbott.
Sincerely, ACCEPTED:
SCHEIN PHARMACEUTICAL, INC.
/s/ Xxxxxx X. Xxxxxxxxx, Xx.
Xxxxxx X. Xxxxxxxxx, Xx.
Sr. Vice President By: /s/ Xxxxx X. Plaza
---------------------------
Chemical & Agricultural Xxxxx X. Plaza
Products Division Vice President
Date: 12/2/1993
-------------------------
[LETTERHEAD OF SCHEIN PHARMACEUTICAL, INC. APPEARS HERE]
June 9, 1995
Xx. Xxxx X. Xxxxxxxx
Vice President
Chemical and Agricultural Products Division
Xxxxxx Laboratories
0000 Xxxxxxxx Xxxx
Xxxxx Xxxxxxx, Xxxxxxxx 00000-0000
Dear Xx. Xxxxxxxx:
This letter agreement shall amend the Supply Agreement dated as of May 1, 1992
between Xxxxxx Laboratories and Steris Laboratories, Inc. as amended by the
letter agreement dated December 2, 1993 (the "Agreement"). Defined terms shall
have the same meaning as used in the Agreement unless otherwise defined herein.
The parties agree as follows:
1. The term of the Agreement shall be extended through December 31, 1999.
2. (a) The term "Contract Requirements" shall mean one hundred percent (100%)
of the worldwide requirements for Drug Substance of Steris and its
Affiliates through December 31, 1997, seventy percent (70%) of such
worldwide requirements from January 1 through December 31, 1998, and sixty-
five percent (65%) of such worldwide requirements from January 1 through
December 31, 1999. As used hereinafter the term "Steris" shall mean Steris
and its Affiliates. During 1998 and 1999 Steris shall be entitled to
purchase or have purchased the balance of such worldwide requirements from
any source or sources, including Abbott; and Steris may in advance take
appropriate steps to identify and secure such sources (but Steris may not
purchase commercial quantities of Drug Substance from such sources prior to
January 1, 1998).
(b) By April 1, 1996 in respect of calendar year 1998, and by April 1,
1997 in respect of calendar year 1999, Steris shall notify Abbott of the
percent of its worldwide requirements for Drug Substance for the applicable
calendar year that it will purchase from Abbott; provided that in no
respect shall such percentage be less than the Contract Requirements for
that year. Steris shall also submit to Abbott by the April 1 notification
dates described above, Steris' forecast by volume of 100% of its worldwide
requirements for Drug Substance for calendar year 1997 or 1998, as the case
may be. These forecasts shall be non-binding and shall be used only for
planning purposes.
(c) Concurrent with the date Steris notifies Abbott that it will purchase
from Abbott less than 100% of its worldwide requirements of Drug Substance
for the calendar years 1998 and/or 1999, Steris may elect to compensate
Abbott for its diminution in profits resulting from Steris purchasing less
than 100% of its worldwide requirements of Drug Substance from Abbott, by
payment to Abbott, by buying an alternate Abbott product or products
mutually agreed to by the parties, or by some
Xx. Xxxx X. Xxxxxxxx
June 9, 1995
Page 2
other mutually acceptable means. If Steris does not so elect, then Abbott
shall have the right to qualify other buyers (including Abbott and its
Affiliates) for Drug Substance and to sell and/or transfer to such buyers
the difference in quantity between 100% of Steris' worldwide requirements
for Drug Substance and the Contract Requirements for that calendar year.
3. Subject to paragraph 4 below, the price of the Drug Substance shall be
********* per liter effective January 1, 1995 through the remainder of the
term of the Agreement. Further, the price for Drug Substance for each
calendar year hereunder beginning with calendar year 1996 shall be subject
to adjustment annually by the increase in the Consumer Price Index - All
Urban Consumers - (CPI-U) over the 1995 average CPI-U.
4. During the first week of each calendar quarter during the term of this
Agreement following the first date on which the Average Selling Price of
INFeD(R) is less than ****** per vial, Steris shall promptly notify Abbott
in writing of the Average Selling Price then in effect (the
"Notification"). As used in this Agreement, the "Average Selling Price"
means the weighted average selling price per vial for INFeD(R) sold by
Steris (or its affiliates) to third parties during the prior calendar
quarter. For purposes of calculating the Average Selling Price see the
example set forth in Schedule B, attached hereto and made a part hereof.
Steris represents that the Average Selling Price calculation will be based
on total INFeD(R) sales to third parties. If at any time during the term of
the Agreement the Average Selling Price of INFeD(R) is less than *******
per vial, then within seven (7) days of Xxxxxx'x receipt of a Notification,
the price to Steris of the Drug Substance shall be reduced in accordance
with Schedule A hereto, retroactive to the first business day of the then-
current calendar quarter. Abbott shall have the right at any time within 30
days of receipt of a Notification to commence an audit in accordance with
paragraph 6 herein to confirm the accuracy of the determination of the then
current Average Selling Price. Notwithstanding the foregoing, the price of
the Drug Substance will not be reduced pursuant to this paragraph 4 more
than once per calendar quarter. Fifty percent (50%) of any price reductions
made pursuant to this paragraph 4 also shall apply to Drug Substance
contained in Steris' inventory and which was received by Steris during the
quarter preceding Notification. If at any time during the term of the
Agreement the quarterly Average Selling Price of INFeD(R) increases above
the price contained in the prior Notification, then the price for Drug
Substance shall be adjusted for that quarter to correspond to such
increased Average Selling Price as set forth on Schedule A. Notwithstanding
anything herein to the contrary, if at any time Abbott is entitled to and
makes Drug Substance available to any party (excluding transfers within
Abbott or to its Affiliates, unless the Drug Substance is resold by the
recipient other than to an Affiliate) at a price lower than the price
available to Steris hereunder, then the price of Drug Substance hereunder
shall be reduced to that lower price.
5. Abbott agrees that it will hold in confidence and will not disclose to any
third party the pricing information that may be disclosed to it pursuant to
paragraph 4 above. Abbott will not use any of the pricing information which
it is required to hold in confidence except in connection with any
adjustment of the Drug Substance price as contemplated by paragraph 4
above. Abbott further agrees to restrict access to such
* redacted pursuant to confidential treatment request.
Xx. Xxxx X. Xxxxxxxx
June 9, 1995
Page 3
pricing information to the minimum number of its employees within the
Chemical and Agricultural Products Division necessary for the purpose of
such re-evaluation and shall use the same standard of care to preserve and
safeguard the confidential pricing information as is used with its own
information of a similar kind. Abbott agrees that such confidential pricing
information will remain within its Chemical and Agricultural Products
Division and will not be disclosed to any other division, group or
affiliated company including, without limitation, its Hospital Products
Division.
6. Steris shall provide Xxxxxx'x independent auditors (reasonably acceptable
to Steris), at Xxxxxx'x expense, with access during regular business hours
and upon reasonable prior request (and subject to the confidentiality
obligations contained in the Agreement and in paragraph 5 above) to Steris'
records and documents relating to INFeD(R) solely for the purpose of
verifying the accuracy of the Average Selling Price calculation described
in paragraph 4 above and the Contract Requirements described in paragraph 2
above.
7. Except as otherwise provided hereunder, all other terms and conditions of
the Agreement shall remain in full force and effect.
If the foregoing terms and conditions of this letter agreement are acceptable,
please sign both originals and return one original to Steris.
Sincerely,
ACCEPTED AND AGREED:
STERIS LABORATORIES, INC. XXXXXX LABORATORIES
By: /s/ Xxxxx Plaza By: /s/ Xxxx X. Xxxxxxxx
------------------------ ----------------------------
Xxxxx Plaza Xxxx X. Xxxxxxxx
Senior vice President Vice president
and General Manager CAPD Commercial Operations
SCHEDULE A
DRUG SUBSTANCE PRICE**
(PER KILOGRAM,
AVERAGE SELLING DENSITY FACTOR OF
PRICE (PER VIAL)* **** KILOGRAMS PER LITER)
----------------- -------------------------
*** **** ***** *****
** *****
** *****
** *****
** *****
** *****
** *****
** *****
* *****
* *****
* *****
* *** ***** *****
* For Average Selling Prices between whole dollars, the price of Drug
Substance shall be proportionately adjusted.
** Subject to adjustment in accordance with paragraph 3 of this letter
agreement.
* redacted pursuant to confidential treatment request.
A1/1
SCHEDULE B
CALCULATION OF AVERAGE SELLING PRICE
INFeD(R)
QUARTER ENDING________
Total Net Sales to Third Parties - INFeD(R) $ (A)
Total Unit Sales - INFeD(R) $ (B)
Average Selling Price Per Unit - INFeD(R) $ A/B
B1/1
